TOP 12 ISSUES WEBINAR SERIES Health: Medicaid and Health Reform

1. TOP 12 ISSUES WEBINAR SERIES
Health: Medicaid and Health Reform

2. Health
Today’s webinar will cover:
 Medicaid
 Health Reform
– Health Insurance Exchanges
– Essential Health Benefits
– Opposition Actions

3. Presenters
 Martha King
NCSL Health Program Group Director
 Melissa Hansen
NCSL Senior Policy Specialist
 Martha Salazar
NCSL Policy Associate
 Dick Cauchi
NCSL Health Program Director

4. Medicaid
 Medicaid overview
 Why Medicaid is a top issue for
states in 2012
 4 things for states to consider as
they address Medicaid issues

5. Health Insurance Assistance to Long-Term Care
Coverage Medicare Beneficiaries Assistance
Over 30 million children & 17 9.2 million aged and disabled 70% of nursing home
million adults in low-income — 16% of Medicare residents; over 2.8 million
families; over 16 million beneficiaries community-based residents
elderly and persons with
disabilities
MEDICAID
Support for Health Care State Capacity for Health
System and Safety-net Coverage
15% of national health spending; Federal share ranges 50% to 75%;
48% of long-term care costs 45% of all federal funds to states
SOURCE: Kaiser Commission on Medicaid and the Uninsured, 2011; MACPAC Report to the Congress, March 2011.

6. Medicaid’s Role for Selected Populations
Poor 42% Percent with Medicaid
Coverage:
Near Poor 24%
Families
All Children 30%
Low-Income Children 56%
Low-Income Adults 21%
Births (Pregnant Women) 41%
Aged & Disabled
Medicare Beneficiaries 17%
People with Severe Disabilities 20%
People Living with HIV/AIDS 44%
Nursing Home Residents 70%
SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute analysis of 2009 ASEC Supplement to the CPS; Birth data from Maternal and

7. Why Medicaid is a top
issue for states in 2012
 Fiscal situation in states

8. Cumulative State Budget Gaps: FY 2002- FY 2014

9. Why Medicaid is a top
issue for states in 2012
 Fiscal situation in states
 Enrollment increase associated with the Great
Recession

11. Total and State Medicaid Spending Growth FY 2000 – FY 2012
Total State 28.7%
ARRA Enhanced FMAP
(2009-2011)
12.9%
12.7%
10.4% 10.8%
9.9% 10.1%
8.7% 8.5%
8.4% 7.7% 7.6% 7.3%
6.4% 6.6%
5.5% 5.8%5.7%
4.9% 4.0%
3.0% 3.8%
2.2%
1.3%
Enhanced FMAP /
Federal Fiscal Relief -4.9%
(2003-2005) Adopted
-10.9%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
NOTE: State Fiscal Years. SOURCE: Historic Medicaid Growth Rates, KCMU Analysis of CMS Form 64 Data; FY 2008, 2009 and 2010, KCMU survey of Medicaid officials in 50 states

12. Why Medicaid is a top
issue for states in 2012
 Fiscal situation in states
 Enrollment increase associated with the Great
Recession
 Affordable Care Act expansion in 2014

13. Affordable Care Act expansion in 2014
 2014 expansion will qualify all Americans
under age 65 with family incomes at or below
133 percent of federal poverty guidelines.
– This includes childless adults
 New eligibility calculation called “modified
adjusted gross income,” (MAGI) will effectively
raise the eligibility level to 138 percent of the
poverty level for most applicants.

14. Non-Elderly Medicaid Enrollees Will Grow
by 16 Million to 51 Million in 2019
Average Annual Medicaid Enrollment Non-Elderly Only in Millions
With Reform
Without Reform
Source: Andrew Bindman, M.D., California Medicaid Research Institute (CBO data).

15. Other ACA-related Medicaid changes
 Requires maintenance of effort (MOE) for state Medicaid and
Children’s Health Insurance Program (CHIP) eligibility levels.
 Includes new mandatory and optional benefits in Medicaid.
 Requires states to improve outreach and enrollment for
Medicaid and to coordinate Medicaid eligibility with the new
health benefit exchanges, which must be operational by
2014.
For a list of Medicaid changes, please visit:
http://www.ncsl.org/issues-research/health/medicaid-home-page.aspx

16. Why Medicaid is a top
issue for states in 2012
 Fiscal situation in states
 Enrollment increase associated with the Great
Recession
 Affordable Care Act expansion in 2014
 State actions to improve efficiency and
effectiveness within Medicaid programs

18. Why Medicaid is a top issue for states in 2012:
State Actions …
 More than 200 Medicaid-related bills
have been filed this session in at least 34
states.
– More than 150 of these bills are
related to ACA implementation.
 Many of these bills attempt to contain
costs within the program.

19. 4 things for states to consider as they
address Medicaid issues
 Know what the cost drivers are in your
state's Medicaid program.

20. Top 5% of Enrollees Accounted for
More than Half of Medicaid Spending, FY 2008
Bottom 95% Bottom 95% Top 5%
of Spenders of Spenders
Children 3.7%
Adults 1.8%
Top 5%
Disabled 31.8% 54%
Children 0.4%
Adults 0.2%
5%
Disabled 2.6%
Elderly 1.8% Elderly 16.8%
Total = 60.6 million Total = $292.2 billion

21. Medicaid Dual Eligibles: Enrollment and Spending, FFY 2007
Medicaid Enrollment Medicaid Spending
Premiums Medicare
4% Acute 6%
Adults
Other Acute
25% Other Aged
& Disabled 2%
10%
Non-Dual
Spending Long- Dual
Duals Spending
60% Term Care
15% 39%
Children 27%
50%
Prescribed
Drugs
0.4%
Total = 58 Million Total = $311 Billion

22. 4 things for states to consider as they
address Medicaid issues
 Know what the cost drivers are in your state's
Medicaid program.
 Understand your state's Medicaid managed
care program's challenges and
opportunities.

23. Figure 23
Medicaid Managed Care Penetration Rates
by State, 2008
NH
VT
WA ME
MT ND
MA
MN
OR NY
ID SD WI
MI RI
CT
WY
PA
IA NJ
NE OH
NV IN DE
IL WV
UT IL VA
CO MD
CA KS MO KY
NC
DC
TN
OK SC
AR
AZ NM
AL GA
MS
TX
LA
AK FL
HI
0-50% (5 states)
51-70% (20 states including DC)
U.S. Average = 70%
71-80% (9 states)
81-100% (17 states)
Note: Unduplicated count. Includes managed care enrollees receiving comprehensive and limited benefits.
SOURCE: Medicaid Managed Care Enrollment as of December 31, 2008. Centers for Medicare and Medicaid
Services.

24. 4 things for states to consider as they
address Medicaid issues
 Know what the cost drivers are in your state's
Medicaid program.
 Understand your state's managed care
contracts.
 Fraud and abuse prevention and recovery

25. 4 things for states to consider as they
address Medicaid issues
 Know what the cost drivers are in your state's
Medicaid program.
 Understand your state's managed care
contracts.
 Fraud and abuse prevention and recovery
 Health information systems
– Medicaid Electronic Health Records (EHR) Incentive
Program

26. Health Insurance Exchanges
 Marketplace for health insurance.
 Provide coverage options for individuals and small
businesses with more transparency than currently
exists today.
 Vehicle for administering the new federal tax
credits for certain people who don’t have coverage
through their employer.
 Enrollment "facilitator" for public programs.

27. What is Required?
 Every state must have Exchange(s) for
individuals and small businesses (up to 100
employees), effective Jan. 1, 2014.
 Will it be a state-based exchange, federally
facilitated exchange or a partnership?
 Exchange health plans must offer a
minimum level of coverage.

28. Upcoming Deadlines and
Decisions
 State-based exchanges must demonstrate
process is underway to establish an exchange
that will be operational by January 2014 via a
State Plan before January 1, 2013.

29. Options for States
If a state decides to establish an exchange, it has the
following options:
 A state agency
– Existing agency
– Independent public agency
 A non-profit entity
 Who will serve on the governing board?
 Contract with other eligible entities to carry out various
functions of the exchange.
 How will the state regulate insurers in the exchange?

30. Concerns and Challenges
 Timeframe
 Guidance
– First regulations published in July
– Medicaid coordination, subsidies, quality, and other
regulations still to come
 Building/Upgrading Health Information
Technology Systems

31. Medicaid/Exchange Eligibility
Systems
 Simpler eligibility rules
 Efficient and easy to use seamless enrollment
 "No Wrong Door" Approach

32. Summary of Establishment Legislation
As of February 7, 2012
NH*
AK* WA VT ME*
MT ND MA
MN*
OR WI* NY RI*
ID SD
MI* CT
WY PA*
IA* NJ
NE OH
NV IL IN
DE
UT WV VA
CO
CA KS MO KY MD
NC
TN DC
OK* SC*
AZ NM AR
GA
MS AL
HI LA
TX
FL
Legislation Pending
Enacted Exchange Establishment or Intent
Exchange Establishment Not Addressed (So Far)
* Introduced in 2011. Indicates that the bill(s) carried over from 2011.

33. State Exchanges
State Structure Governance Carrier Selection
CA Independent State Agency 5 Member Board Active Purchaser
CO Non-Profit 12 Member Board All Plans Allowed
CT Quasi-Public 14 Member Board Active Purchaser
HI Non-Profit 15 Member Interim Board Commissioner will decide
MD Independent State Agency 9 Member Board Board will decide
MA Independent State Agency 11 Member Board Active Purchaser
NV Independent State Agency 10 Member Board TBD
OR Quasi-Governmental 9 Member Board Active Purchaser
UT Existing Agency Up to 9 Members All Plans Allowed
VT Existing Agency Deputy Commissioner All Plans Allowed
WA Public/Private Partnership 11 Member Board TBD
WV New Agency with Office of 10 Member Board All Plans Allowed
Insurance

34. Federal Funding Awarded
 49 states and DC received up to $1 million in exchange planning
grants. Four territories received similar grants on March 21,
2011.
– FL, LA and NH returned grants, AK did not apply.
 6 states and a multi-state consortium led by the University of
Massachusetts Medical School received over $241 million in
Early Innovator grants to develop model Medicaid/Exchange IT
systems.
– KS, OK and WI returned grants.
 29 states and the District of Columbia were awarded $1-$39
million in level one exchange Establishment grants.
– More expected to come…

35. Essential Health Benefits
Defining what services will be covered
 The ACA requires HHS to define "essential health benefits"
for exchanges + small group + individual plans
nationwide.
– 10 uniform categories listed in the law.
– Additional details & definitions must be resolved in 2012.
 ACA does not directly change or preempt state mandates.
 Starting in 2014, states must cover extra cost of mandated
benefits that go beyond essential benefits package.

36. State Mandate Laws: a Major
Factor?
 Every state has a substantial but varied number
of state laws (about 1,600 nationwide) that
"mandate" commercial market health insurance
to cover specific benefits/providers.
 Actual coverage mandates vary widely
– Autism = 29 states Home health = 20 states
– Diabetes = 47 states Acupuncturist= 11 states

37. Timeline: Latest developments
 Oct 6, 2011 Institute of Medicine Report -
 Dec. 16, 2011: Major change; HHS proposes to allow
each state to pick among its health plans.
– 1 of largest state "small group" plans or
– 1 of largest state employee plans
– Largest state HMO in commercial market
– 1 of largest Federal Employee plans (FEHBP)
 Jan. 25 - HHS list of 50-states' small group plans
 Jan. 31, 2012 - Comments filed with HHS (including NCSL)
 By May 1, 2012 - HHS final rules expected.

38. Expected state action for 2012-13
 Most states will choose a single state-based or
FEBHP “essential benefit plan” in 2012.
Will legislatures weigh in or make decisions?
 Legislatures may address existing state law
mandates in 2012 and 2013.
States could Expand? Repeal? Review?

39. Opposition to Health Reform:
States and the U.S. Supreme Court
 State Attorneys General in the lead with court suits
 25 federal court cases filed, divided rulings

40. 28 States with AGs supporting legal challenge +
 Alabama  Mississippi (2010)*
 Alaska  Missouri (single state lawsuit, 21 amicus states)+
 Arizona *  Nebraska
 Colorado §  Nevada (2010)*
 Florida  North Dakota (20110)*
 Georgia*  Ohio (2011)**
 Idaho  Pennsylvania
 Indiana  South Carolina
 Iowa (2011)**  South Dakota
 Kansas (2011)  Texas
 Louisiana  Utah
 Maine  Virginia (single-state lawsuit; Appeals Court)
 Michigan **  Washington §
 Wisconsin (2011)**
* = States where legal action was initiated by governors' offices.
** New executive branch officials for 2011 announced support for lawsuit.  Wyoming (2011)**
§ = States where Attorney General initiated action but Governor publicly
supported law, opposes challenge.
+ = Lt. Governor in the lead.

41. 4 Legal Issues in 3 Days of Oral Argument
 Individual mandate - "Whether Congress had the power under
Article I of the Constitution to enact the minimum coverage provision."
 Medicaid expansion - "Does Congress exceed its enumerated
powers ... when it coerces States into accepting onerous conditions that
it could not impose directly by threatening to withhold all federal funding"
for non-compliance?
 Severability - "To what extent (if any) can the mandate be struck
down but) severed from the remainder of the Act?"
 Delay decision due to Anti-Injunction Act- whether the penalty
provision in the ACA is a tax, which could prevent a court challenge until
it is in effect, 2014.

42. Supreme Court Timeline
Delay to
2014?

43. State Legislation Opposing, Opting Out or
Avoiding Certain Reforms
• In 2011: 45 states considered 210 proposals.
• In 2012: 34 states are considering 125 proposals (so far)
• Most bills seek to block state government involvement; creating a policy
of no implementation or enforcement of mandates (federal or state) to
require:
– purchase of insurance by individuals,
– or contribution to premiums by employers,
– or imposing fines or penalties for those who fail to do so.
 90% of state bills do not discuss federal constitutionality.

44. Missouri ballot question, election day , 8/3/10

45. Enforceable or Symbolic?
Examining the legal language
 “No law or rule shall compel any person or employer to participate in any
health care system.” -[AZ constitutional amendment, 2010]
 Declares it state policy that every resident "shall be free to choose or to
decline to choose any mode of securing health care services without
penalty or threat of penalty;" [TN statute, 2011]
 No state or local public official, employee, or agent "shall act to impose,
collect, enforce, or effectuate any penalty in this state." [TN statute, 2011]

46. Some 2011-12 Specific Opposition Provisions:
(Wording and enforceability varies among bills)
 Block state agency implementation unless approved by
the legislature - Filed in 10 states; laws in 4.
 Health Freedom Interstate Compacts
- Filed in 16 states; laws in 4.
 Nullification and state sovereignty: include seeking state
criminal penalties for federal or state enforcement of ACA
- Filed in 11 states; no penalties enacted.
 As of 2/9/2012

47. .

48. Upcoming Webinars:
Feb.13 Putting Election Laws to the Test
Feb. 17 Corrections, Juvenile Justice and Drugged Driving
Feb. 20 Transportation Funding, Natural Gas and
Environmental Regulations
Feb. 24 Funding Education in a Climate of Cutting

49. Questions & Contact Information
•The webinar archive and power points will be
emailed to you next week.
•Contact
•Health-info@ncsl.org
•For more information:
•www.ncsl.org/healthreform
•www.ncsl.org/issues-research/health/medicaid-home-page.aspx