Harvard's Robert Greenwald on Texas Medicaid


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Robert Greenwald, JD, Clinical Professor of Law and Director of Center for Health Law and Policy Innovation at Harvard Law School, presented an in-depth analysis forum of the federal health reform Affordable Care Act and associated transformation of the Texas Medicaid system. On January 24 in Austin, he spoke to sever audiences on the challenges and opportunities specific to Texas including why the Affordable Care Act’s Medicaid expansion is so important to the provision of cost- effective, high quality care and treatment to low income uninsured Texans.
Professor Greenwald has over 20 years of experience in the fields of health law and policy. His Center is recognized as a national leader in Affordable Care Act implementation and in efforts to improve healthcare access and health outcomes for the uninsured and underinsured.
One Voice Texas and the Harris County Healthcare Alliance sponsored the event.

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Harvard's Robert Greenwald on Texas Medicaid

  1. 1. Texas Affordable Care Act Implementation: Challenges and Opportunities Texa s Robert Greenwald Clinical Professor of Law Director, Center for Health Law and Policy Innovation of Harvard Law School January 2012 1
  2. 2. PRESENTATION OUTLINE• Part 1: The Affordable Care Act: Overview of Where We Are and Where We Are Going• Part 2: Why Medicaid Expansion is an Important Priority & Texas Implementation Challenges and Opportunities• Part 3: Massachusetts HIV Case Study: An Example of Successful Health Reform Implementation 2
  3. 3. Part 1 The Affordable Care Act:Overview of Where We Are & Were We Are Going 3
  4. 4. Where We Are:Status Quo = Access to Care Crisis 4
  5. 5. U.S. and Texas Rates of Uninsured Should Not Be Considered Acceptable 5Source: http://www.gallup.com/poll/156851/uninsured-rate-stable-across-states-far-2012.aspx
  6. 6. Where We Are Going:ACA Reforms Private Insurance and Reduces Discriminatory Insurance Practices• Health plans cannot drop people from coverage when they get sick (in effect)• No lifetime limits on coverage (in effect)• Cannot be denied insurance because of pre-existing health conditions, even if you don’t currently have coverage (2014)• No annual limits on coverage (2014) 6
  7. 7. ACA Promotes Access to Subsidized Private Insurance through Exchanges in 2014• Consumer-friendly Exchanges to purchase private insurance in a competitive market Texas will have a federally run Exchange• Federal subsidies for people with income between 100- 400% FPL (Up to ~$44K for an individual/~$92K for family of four)• Plans cannot charge higher premiums based on gender or health status• Plans must include Essential Health Benefits 7
  8. 8. Texas Will Have A Federal Exchange (For Now..) Texas has until 2/15/13 to opt for a partnership exchange (allowing Texas to control parts of the federal exchange)• Federal government will be responsible for insurance exchange or Texas can choose to run plan management and consumer assistance - Plan Management includes: responsibility for all qualified health plan certification, management, oversight, monitoring and marketing - Consumer Assistance includes: overseeing the Navigator program, and providing other in–person assistance to consumers• Federal government is responsible for exchange web site and consumer hotline 8
  9. 9. ACA Includes a Comprehensive Essential Health Benefits Package ACA Essential Health Benefits For All Newly Eligible• Ambulatory services Medicaid• Emergency services Beneficiaries• Hospitalization• Maternity/newborn care• Mental health and substance use disorder services For Most New• Prescription drugs Individual and• Rehabilitative and habilitative services• Small Group Laboratory services• Preventive and wellness services and Private Insurance chronic disease management Beneficiaries• Pediatric services 9
  10. 10. ACA Increases Access to Medicare Drug Coverage & Preventive Services• Part D “donut hole” phased-out by 2020• 50% discount on all brand-name prescription drugs• Free preventive services – Among others, for adults, includes mammograms, colonoscopies and other cancer screenings, diabetes screenings, counseling for tobacco use and certain types of pre-natal care. Treatments for the prevention of alcohol abuse, depression and obesity. 10
  11. 11. ACA Expands and Improves Medicaid in 2014• Expands eligibility to Medicaid by eliminating the disability requirement for those with income up to 138% FPL (~$15K for an indiv/~$32K for family of four) – Every low-income U.S. citizen and legal immigrant (after 5 years in U.S.) is now automatically eligible• Based on Supreme Court decision federal government can’t withhold all federal Medicaid funds if states refuse to implement Medicaid expansion – But federal funds will pay for 100% of newly eligible beneficiaries and 90% in 2020 and beyond Medicaid expansion is optional and will be decided state-by- state 11
  12. 12. ACA Includes Other Medicaid Improvements: Supports Primary CareProviders, Medicaid Health Home, and Free Preventive Services• Improves reimbursement rates for primary care providers (up to Medicare reimbursement rate) for 2013 and 2014• Gives states the option to provide cost-effective, coordinated and enhanced care and services to people living with chronic medical conditions through Medicaid Health Home Program• Gives state the option to provide free preventive services with increased federal funding – Among others, for adults, includes mammograms, colonoscopies and other cancer screenings, diabetes screenings, counseling for tobacco use and certain types of pre-natal care. Treatments for the prevention of alcohol abuse, depression and obesity. – For children, it includes pediatric visits, vision and hearing screening, developmental assessments, immunizations and obesity screenings. 12
  13. 13. Great Potential But Successful Implementation Will DecideImproves Medicaid: Expands eligibility (state option); provides essential health benefits (EHB) (federal and state regulations); improves reimbursement for PCPs (only 2013-14); includes health home (state option); free preventive services (state option for Medicaid)Creates Private Insurance Exchanges: Provides subsidies up to 400% FPL (federal and state regulation); eliminates premiums based on health/gender; provides EHB (federal and state regulation); supports outreach, patient navigation and enrollment (federal and state regulation) Only with Successful Medicaid Expansion Will We Dramatically Improve 13 Health Outcomes, Address Disparities, and Meet Prevention Goals
  14. 14. Part 2 Medicaid Expansion: A Key Advocacy Priority &Texas ACA Implementation: Challenges & Opportunities 14
  15. 15. Texas has Implemented Several Ground Breaking StateState Initiatives (2009-2012) New Initiatives 2009-2012• Child Obesity Pilot Project : Obesity prevention program for children enrolled in Medicaid/CHIP• Tailored Benefits: enrollment of children with disabilities into managed care to improve their acute care services.• Smoking Cessation: Pilot program that provides incentives to Medicaid beneficiaries to lead healthy lives.• Long-term Care Partnership: State and private insurers partnership to encourage people to plan for their future long- term needs with purchase of high quality long term care plan.• Quality-Based Payment: Developing initiatives & options for increased quality based payment in Medicaid and Chip to improve quality and efficiently provide care. 15
  16. 16. Challenge: Texas has the Highest Rate of Uninsured in the Nation TX 16
  17. 17. ACA Will Dramatically Decrease Uninsured Rates By Requiring Everyone to Have Health Insurance The area in red is the Texas Medicaid expansion population The area in blue is the Texas subsidized insurance populationSource: Texas Health and Human Service Commission: http://www.hhsc.state.tx.us/news/presentations/2012/071212-ACA- 17Presentation.pdf
  18. 18. ACA Implementation with Medicaid Expansion =Income-Based Early and Comprehensive Health Care Coverage Rice University research estimates that up to 4.4 million out of 6 million currently uninsured Texans will obtain insurance, with Texas seeing the largest gain in insurance coverage in the country with only 5.8% of Texans remaining uninsured. ACA ImplementationTexas HHSC estimates that ACA Implementation with Medicaid expansion would provide health care to 2.6 million of the 5.5 million uninsured people in Texas.Source: http://library.cppp.org/files/3/HC_2012_06_BR_MHMClineMurdock.pdfTexas HHSC, Pink Book 2013 (http://www.hhsc.state.tx.us/medicaid/reports/PB9/PinkBook.pdf) 18
  19. 19. Waiting for People to be Disabled Before Providing Access to Care is Unsustainable ABD = aged, blind, disabledSource: Texas Health and Human Services Commission, “Texas Medicaid and CHIP in Perspective: Seventh Edition”, 2009 19
  20. 20. The Lack of Investment in Adults’ Preventive Health Care is Taking Its Toll on Texans In United Health Foundation’s “America’s Health Ranking” survey Texas was 39th in 2009, 40th in 2010, 42nd in 2011 and 40th in 2012 Texas is in the bottom 20% of the United States in terms of the health of its citizens.Source: http://www.americashealthrankings.org/ALL/2009-2009;http://www.americashealthrankings.org/ALL/2010; 20http://www.americashealthrankings.org/ALL/2011; http://www.americashealthrankings.org/All/2012
  21. 21. The Status Quo Isn’t Working: Federal and State Policy Reform Matters Average per capita health spending% of GDP In all other industrialized democratic countries health care costs are low and every citizen is guaranteed access to health care21
  22. 22. Challenge: Some See the Medicaid Expansion as Investing in a Low Value Program “Medicaid is a broken system.” Kyle Janek, Texas Health and Human Services Executive Commissioner 1/1/2013, Texas Medical Association Medicaid Expansion is a new Medicaid program.The Medicaid Expansion isn’t a disability program. It is a prevention- based early access to affordable health care program. As Chief Justice Roberts stated in the ACA decision: “Congress’s decision to so title it is irrelevant…The Medicaid expansion, accomplishes a shift in kind, not merely degree.“ 22
  23. 23. Current Medicaid Program = Disability (Not a Health Care) Program for Low-income Uninsured % of Medicaid Expenditures by Type of Service Long Term Care Inpatient Other Acute Outpatient Prescription Drugs 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00%Source: Kaiser Family Foundation. Analysis of 2007 MSIS data provided by the Urban Institute 23(http://www.kff.org/hivaids/upload/8218.pdf)
  24. 24. Medicaid Expansion is Not Just for the Unemployed: Low-Wage Workers and Small Business Owners are Increasingly Uninsured“Small Businesses Hit Hard by Economy Consider Dropping Health Coverage,” New York Times, Feb 3, 2009. 24
  25. 25. Increasingly Texas Has a High Rate of Small Business Owners and Low-Wage Workers Who Are Uninsured and Eligible for the New Medicaid ProgramSource: Health Texas, Report on Senate Bill 10, Section 25, 80 th Legislature Regular Session,Healthy Texas Phase II Report 25(http://www.tdi.texas.gov/reports/life/documents/hlthytxph2rpt09.pdf)
  26. 26. For Most Texans Being Uninsured is Not a Short-Term Problem 26Source: Families USA, Report 2009 (http://familiesusa2.org/assets/pdfs/americans-at-risk/texas.pdf)
  27. 27. Being Uninsured Results In Delayed Medical TreatmentMost Insured Adults Worry About Health Care Costs: Poll,” HealthDay News, March 9, 2009. 27http://news.health.com/2009/03/09/most-insured-adults-worry-about-health-care-costs-poll/
  28. 28. Early Access to Comprehensive Health Care Matters• People with a usual source of care have better health outcomes and lower health care costs• Having a usual primary care provider increases the likelihood that patients will receive appropriate and cost-effective health care• Access to early preventive services prevents illness and detects disease at an earlier, often more treatable and less costly stageSee: http://www.healthypeople.gov/2020/default.aspx 28
  29. 29. Early Intervention Is Cost-Effective and Improves both Individual and Public Health Outcomes• Many interventions intended to prevent/control diabetes are cost saving or very cost-effective and supported by strong evidence.*• Early intervention treatment for mental illness does not increase costs and is highly cost-effective when compared with standard care.**• Clinical trial evidence has shown convincingly that pharmacological treatment of risk factors can prevent heart attacks and strokes.***• A combination of increased screening and increased access to treatment could avert 300,000 HIV infections in the United States over 20 years or approximately 17% to 24% of new infections.****Medicaid expansion is cost-effective early intervention with a focus on prevention * Li Rui, et. al., Cost-Effectiveness of Interventions to Prevent and Control Diabetes Mellitus: A Systematic Review, 2010; ** Paul McCrone, Cost-effectiveness of an early intervention service for people with psychosis, 2010; *** William Weintraub, Value of Promordial and Primary Prevention for Cardiovascular Disease, 2011; **** E Long, et. al., The Cost-Effectiveness and Population Outcomes of Expanded HIV Screening and Antiretroviral Treatment in the United States, 2010 29
  30. 30. Challenge: Some See the Solution as About ShiftingResources and Not About Need for Additional Resources "We could design a system that would be a Texas solution, and that solution may involve covering people who are currently not covered; though that would be with existing funds." Kyle Janek, Dallas Morning News Shifting resources can’t help low-income uninsured individuals and families who are left outside of the health insurance system if Texas doesn’t expand Medicaid. 30
  31. 31. Lack of Insurance Will Continue: This Leads to Uncompensated Care in Hospitals and Free Clinics and The Problem is GrowingSource: 2010 Cooperative DSHS/AHA/THA Annual Survey of Hospitals and Hospital Tracking Database; Texas FactSheet by Hospital Survey Unit, Center for Health Statistics, Texas Department of State Health Services 31(www.dshs.state.tx.us/chs/hosp/fact2011.doc)
  32. 32. High Rates of Uninsured is a Vicious Cycle Forcing More Texans to Drop Coverage 32Source: Texas Medical Association. http://www.texmed.org/Uninsured_in_Texas/
  33. 33. DSH Payments 2007-2011 2000 1800 ~$1.6 Billion a year 1600 1400 Texas $ (millions) 1200 ~$1 Billion a year 1000 Federal $ (millions) 800 ~$600 Million a year Total DSH spending 600 (millions) 400 200 0 2007 2008 2009 2010 2011Texas was 1 of only 3 states to receive over $1 billion in DSH payments in2010 33
  34. 34. With or Without Medicaid Expansion, Federal Support of Uncompensated Care Will Decline ~$14 billion decline over 5 years Not expanding Medicaid in Texas will cost the state’s hospitals nearly $25 billion in reimbursement between 2013 and 2022*Sources: National Association of State Mental Health Program Directors, 2012; Kaiser Family Foundationhttp://healthcare.dmagazine.com/2012/11/26/study-states-rejection-of-medicaid-expansion-will-cost-texas-hospitals-25- 34billion-over-10-years/
  35. 35. Challenge: Some See Cost-Control as Mutually Exclusive of Accepting Billions in Federal Health Care Funding “The short-term effect of getting 100% Federal money can put Texas into a dire state later on.” Kyle Janek, 1/1/2013, Texas Medical Association (at 43:50) Controlling costs make sense.But turning down significant federal resources with a vague (andunproven) promise of state, local and private resources doesn’t. 35
  36. 36. In Terms of Funding: Medicaid Expansion Brings Significant Federal Funding to Texas Based on best estimate of participation. Source: Kaiser Family Foundation 36 (www.statehealthfacts.org)
  37. 37. Texas will receive the biggest share of federal expansion funds in the country = $120 billion in next decadeTexas Spending estimates for the next decade vary: – $9.6 billion most credible given minimum of 90% federal funding (Urban Institute, commissioned by Kaiser Family Foundation: http://www.kff.org/medicaid/upload/8384.pdf) – Texas Health & Human Services Commission estimates $20 Billion • $6 billion of this estimate is for the cost of those already eligible for Medicaid but not enrolled. They are not part of the expansion (http://www.hhsc.state.tx.us/medicaid/reports/PB9/PinkBook.pdf) – Costs will be lower as both estimates include 100% participation and no government program has ever had 100% enrollment. Texas can opt out of expansion at any time! 37
  38. 38. With Medicaid Expansion, Texas Will Realize Net Savings & Without Medicaid Expansion, Costs Will Continue to Rise• Again, in addition to individual and public health related cost savings, Medicaid expansion will dramatically reduce state uncompensated care costs• If Texas doesn’t expand Medicaid, Texas costs will increase, as preventable high-costs interventions and hospitalizations will continue and federal funding to cover uncompensated care will be reduced in favor of funding states’ Medicaid expansionIn first 10 years, Texas will save between 5.8 and 11.6 billion on uncompensated care (5.8 billion assumes uncompensated care declines by only 25% - conservative estimate) Source: Urban Institute and RWJF, 2011 based on 5 year estimates (http://www.urban.org/uploadedpdf/412361-consider-savings.pdf) 38
  39. 39. With or Without Medicaid Expansion, Federal Support of Uncompensated Care Will Decline ~$14 billion decline over 5 years “Rising cost of uncompensated care in non-expansion states will be detrimental to the economy. “ (Republican Gov. Brewer, AZ) 39Source: National Association of State Mental Health Program Directors, 2012
  40. 40. ACA Will Reverse The Trend of Fewer Medicaid Providers: Greatly Increasing Access to Cost-Effective Primary Care Providers Based on Best Estimates, www.texasmed.org 40
  41. 41. Medicaid Expansion Is Increasingly Non-Partisan and Being Assessed on Its MeritsConservative Republican Governors are starting to see Medicaid Expansion as cost saving and a great deal for their statesMedicaid expansion greatly reduces state mental health services burden - Nevada anticipates saving $16 million in just 2 years on mental health and predicts the state would spend and extra $16 million without expansion. Governor Sandoval, NevadaFederal funds from Medicaid expansion boost state economies and will protect rural and safety net hospitals from being pushed to the brink - Arizona estimates saving $353 million in just 3 years. Governor Brewer, Arizona It comes down to are you going to allow your people to have additional Medicaid money that comes at no cost to us, or arent you? Were thinking, yes, we should. Governor Dalrymple, North DakotaMedicaid expansion will not only save money each year, we can expect revenue increases that will offset the cost of providing these services in the future. 41Governor Martinez, New Mexico
  42. 42. Challenge : The Affordable Care Act and Its Medicaid Expansion Will Hurt the U.S. Economy Governor Perry: the Court ruling upholding the ACA is “a stomach punch to the American economy.”• Let’s all hope this turns out not to be the case and that the Congressional Budget Office (CBO), which provides nonpartisan analysis to the U.S. Congress, is correct. • The CBO says that health care costs will decline and the federal deficit will be reduced through ACA implementation.• Regardless, the Supreme Court decision in behind us and the elections are over. The ACA is the law of the land and moving forward.And certainly, the Medicaid Expansion will be a great deal for the Texas economy as $120 billion will flow into Texas creating new revenue and jobs! 42
  43. 43. Healthcare Sector is an Economic EngineAccording to the Texas Hospital Association:• Every hospital dollar spent generates $2.30 in general business activity• In 2010 Texas employed 369,000 individuals in hospitals and their payroll generated $177 Billion in business activity• For-profit hospitals pay $530 Million in state taxes each yearWhat will $120 Billion in federal funds mean for the Texas Economy?Source: Fast Facts on Texas Hospitals, THA, 2012-2013 43 (http://www.tha.org/HealthCareProviders/Advocacy/Hospital%20Facts.pdf)
  44. 44. The Medicaid Expansion Will Have A Multiplier Effect on the Economy With $120 billion in funding over the first 10 years of Medicaid expansion implementation, economic gains will include: ~ $276 Billion in general business activity ~ Over 300,000 new jobs 44
  45. 45. Final Challenge: Doing What is Right For Texans In the Short and Long Term• A concern is: whether or not the federal government will keep its commitment to pay the 90% rate over time• The answer is: if the federal government stops paying, or the costs are too high, Texas can drop the Medicaid expansion at any timeIf Texas doesn’t expand Medicaid, Texans’ federal tax dollars will instead go to fund health care in states that do, like NY and CA! 45
  46. 46. Part 3: Massachusetts as a Case Study ofSuccessful Health Reform Implementation 46
  47. 47. Massachusetts: A Post Health Care Reform State in a Pre-Reform Country• Expanded Medicaid coverage to pre-disabled people living with HIV with an income up to 200% FPL (2001)• Enacted private health insurance reform with a heavily subsidized insurance plan for those with income up to 300% FPL (2006)• Protected a strong Medicaid program for “already” & “newly” eligible The MA case study provides insight into how health reforms work. 47
  48. 48. Massachusetts’ Successful Reform Implementation Improves Health Outcomes and Meets NHAS GoalsNotes: MA outcomes are based on Massachusetts and Southern New Hampshire HIV/AIDS Consumer Study Final Report, December 2011, JSI Research and Training, Inc.; Nationaloutcomes are based on Cohen, Stacy M., et. al., Vital Signs: HIV Prevention Through Care and Treatment — United States, CDC MMWR, 60(47);1618-1623 (December 2, 2011);For both MA and national outcomes, the percentages used are taken from a baseline of those infected, using the same estimated percentage diagnosed (82%) both nationally and forMassachusetts, based on the MMWR. The definition of “In Medical Care” may differ slightly between the MA data and the MMWR.
  49. 49. MA Reform Demonstrates Successful Implementation Reduces New Infections and AIDS Mortality Percent Change in HIV Diagnoses and Death Rates (MA v. U.S.) 10% MA 2% U.S. 0% -10% -20% -30% -25% -33% -40% -44% -50% Percent Change in HIV Diagnosis Rate (2006-2009) Percent Change in HIV Death Rate (2002-2008)• Between 2006 & 2009, Massachusetts’ new HIV diagnoses rate fell by 25% compared to a 2% national increase• Current MA new HIV diagnoses rate has fallen by 46%• Between 2002 & 2008, Massachusetts AIDS mortality rate decreased by 44% compared to 33% nationally Sources: MA Dept of Public Health, Regional HIV/AIDS Epidemiologic Profile of Mass: 2011, Table 3; CDC, Diagnoses of HIV infection and AIDS in the United States and Dependent Areas, 2010, HIV Surveillance Report, Vol. 22, Table 1A; CDC, Diagnoses 49 of HIV infection and AIDS in the United States and Dependent Areas, 2008, HIV Surveillance Report, Vol. 20, Table 1A.
  50. 50. MA Reform Demonstrates Successful Health Reform Implementation Reduces Costs • Massachusetts cost per Medicaid beneficiary living with HIV has decreased, particularly the amount spent on inpatient hospital care • Massachusetts DPH estimates reforms reduced HIV health care expenditures by ~$1.5 billion in past 10 years 50Source: MA Office of Medicaid, data request
  51. 51. For an electronic copy of this presentation and other information about the Affordable Care Act, see:http://www.law.harvard.edu/academics/clinical/lsc/clinics/health.htm This presentation was funded in part through a grant from Bristol-Myers Squibb, with no editorial review or discretion 51