HEALTH & HUMAN SERVICES. It’s now the single largest cost center for governments; we’re not getting any younger and healthcare isn’t getting any cheaper. So help governments focus on cost containment—through consolidation of services delivery, price controls, IT modernization, the leveraging of Big Data and new business intelligence solutions. Governing Institute Director Julia Burrows walks you through a market overview, key data and indicator

2. •Where are we now and what are we
watching?
•Affordable Care Act
•Medicaid
•Long-Term and Managed Care
•CHIPS
• What does it mean?

3. March 23, 2010

4. Affordable Care Act Status
More Americans have Health Insurance
• 15M Americans now covered
• Percentage of uninsured adults in US down from 18% to
13.4%
• Estimate +9.9M enrollees added during 2nd enrollment
period ending Feb 15
• 9.5M enrollees in second open enrollment as of Jan 17

5. Affordable Care Act Status
Enrollment Occurred Online, by States and at Work
•6.4M: HealthCare.gov federal marketplace
•850,000: 14 states with own marketplace
•1.9M: auto-renewal, renewal and new signups

6. Federal Marketplace Snapshot Week 6
Dec 20 – Dec 26
Cumulative
Nov 15 – Dec 26
Plan Selections 99,446 6,490,492
Applications Submitted 197,402 8,189,587
Call Center Volume 452,276 6,731,353
Average Call Center Wait Time 2 seconds 8 minutes 49 seconds
Calls with Spanish Speaking
Representative
28,131* 525,505
Average Wait for Spanish Speaking Rep 2 seconds 30 seconds
HealthCare.gov Users 1,381,879 15,032,614
CuidadoDeSalud.gov Users 43,835 527,217

7. **
**
** FFM
SBM
FFM Partnership
Model
Affordable Care Act: What We’re Watching

8. • Judiciary
• Supreme Court decision on legality of federal subsidies
• State Specific Exchanges
• King v. Burwell – March 2015
• Legislative
• Republican-controlled Congress repeal or limit provisions such as:
• Various taxes on health care industry
• Cadillac tax on high-cost health plans
Affordable Care Act: What We’re Watching

9. July 30, 1965

10. Medicaid (avg.
monthly projected
estimates - millions)
FY 2013 FY 2014 FY 2015
Total 58.1 63.0 66.7
Aged 5.2 5.4 5.5
Blind/Disabled 9.7 9.8 9.8
Children 28.3 28.8 29.3
Adults 14.8 14.8 15.1
Expansion Children 0.0 0.5 0.7
Expansion Adult 0.0 3.7 6.4
CHIP (avg monthly) 5.8 6.0 6.2

11. Medicaid: What We’re Watching
• Medical Doctor’s Pay
• 47% pay cut in 23 states after ACA reimbursement expires
• 15 states subsidize; 12 states undecided; many states refuse to extend
• Doctors cite low payment as reason to not participate in Medicaid; need more
research
• Medical Expansion Waivers
• 28 states expanded Medicaid; election results limit additional expansion
• Movement from states: privatization, patient pay more and employer
insurance coverage

12. Medicaid: State Expansion Status

13. Managed Care Regulations
• By 2016, 3 of 4 Medicaid patients enrolled in managed care plans
• Regulation
• Private health insurers
• Centers for Medicare & Medicaid Services to strengthen oversight of states
and set more uniform access standards this year
• Rate setting rules - how rates determined by states

14. Medicaid: What We’re Watching
High-Cost Specialty Drugs
• States follow FDA Drug Approvals
• 2013: Hepatitis C drug Sovaldi: cures disease; costs $84K for
treatment
• 2015: CA budget includes $300M for drug payments, mostly
Hepatitis C drug for Medi-Cal and California’s infected prisoners
• Medicaid directors advocate for federal intervention
• Price controls
• Better federal matching rates for “curative” specialty drugs
• Greater waiver flexibility to allow states to push for better deals
with drug manufacturers

15. Super-utilizers: 5% of Medicaid’s beneficiaries account for
60% of the overall spending on the program
By 2020, an estimated 55 million people in the United States
will be over the age of 65 = 16.1% of the population
Medicaid: What We’re Watching
Demographics: Super-utilizers and Aging Population

16. Managed Care & Long-Term Care: What We’re Watching
• Medicaid
• 75% of all Medicaid enrollees will be in some form of managed care, including older,
sicker, and more challenged populations than were included in traditional Medicaid
• Significant market opportunities for Medicaid plans
• New challenges in contract management and oversight for state governments
• Long-Term Care
• States must file plans with CMS about how they’re creating home-like atmospheres
through community-based and not institutionalized care – giving seniors real
options
• Growing use of managed care

17. CHIP Reauthorization Status
• CHIP funding expires September 2015
• CHIP jointly funded by state and federal governments
• Unlike Medicaid, insures children from families with higher income levels
• 70% of funding comes is federal
• Financial and Coverage Impact varies by State based on:
• State program design
• Federal matching rate
• Number of children supported with CHIP funds
• If not reauthorized, states will been to fill budget holes and find ways to
maintain coverage for about 4 million children for billions of dollars

18. What Does It All Mean for
Companies Doing Business
with States and Advocacy
Groups Trying to Influence
Policy?

19. Top 10 States’ HHS Spend
1. California-$85.5 billion
2. New York-$49.1 billion
3. Pennsylvania-$31.7 billion
4. Texas-$24.5 billion
5. Florida-$23.2 billion
6. Ohio-$22.5 billion
7. Illinois-$19.7 billion
8. North Carolina-$19.1 billion
9. Michigan-$17.4 billion
10.New Jersey- $15.8 billion
At a total of $308.5
billion, the top 10
states represent
about 50 percent of
all spending in this
vertical

20. Transformative Change to Watch
• Payment Reform: Demonstrations aimed at ending wasteful fee-for-
service system
• Oregon: unique ACO model
• Tennessee and Arkansas: bundled payments.
• Bold cost-containment strategies
• Maryland and Massachusetts: Cap spending
• Comprehensive health delivery system waivers (DSRIP)
• New York (most recently), Texas and California

21. Summary
• Affordable Care Act Enrolls Millions while New Congress
Deliberates Amendments
• Medicaid Expansion and Subsidies Debated State by State
• Drug Costs Dictate Hard Choices
• Changing Demographics Affect Medicaid and Managed Care
• CHIP Reauthorization Critical Path through Congress
• States Innovate based on Champions in Government and
Philosophy of Leaders