Health Care Reform and Medicaid

1. Health Care Reform and Medicaid Vernon K. Smith, Ph.D. Managing Principal Health Management Associates For Alliance for Health Reform Washington, DC April 23, 2010 VSmith@HealthManagement.com

2. States Are Already Organizing for Implementation of Health Reform • Have formed health reform councils, task forces, work groups • Currently sorting out what needs to be done • Identifying timelines • Assigning responsibility • Identifying administrative resources needed • Identifying fiscal impacts and where budget authorizations are needed • States say they are up to the task, even though it is huge, funds are tight, and the timelines are way too short—but it is an historic opportunity to make Medicaid better!

3. The Biggest Challenge: Eligibility System Changes • Sense of urgency since January 2014 is so close, it is extremely complex, and there is little room for error – it has to be perfect • Awaiting guidance from CMS so can begin to write system specifications and requirements • Must identify newly eligible individuals for higher match • Must use new income definitions for MAGI • Must integrate with Health Insurance Exchange and CHIP • Must be simple and easy to use • Investment should result in a simpler, streamlined system, integrated with Insurance Exchange

4. Non-Elderly Medicaid Enrollees Will Grow by16 Million to 51 Million in 2019 Average Annual Medicaid Enrollment, Non-Elderly Only in Millions With Reform Without Reform Source: Based on CBO, March 18, 2010.

5. Other Significant Decisions and Tasks • Early decision on a High-Risk Pool: Will the state run one? • System changes to reflect changes to pharmacy rebates (retroactive to January 2010) • New formula, new inclusion of MCOs • Decision on early expansion of eligibility? • Planning for primary care physician payment rate increase to 100% of Medicare (2013)

6. Coordination of Reform Tasks with Other Priorities • Coordinate resources and efforts on quality improvement, new pilots and demos with ongoing HIT projects, ONC funding, other systems projects (such as implementation of ICD-10 by 2013) • In today’s fiscal situation, new administrative or system resources may not be possible • Expiration of ARRA enhanced FMAP will exacerbate state fiscal issues

7. Long Term Care • States are excited about the possibilities for improving long term care and care for “Dual Eligibles” • Coordinating with Medicare • Improvements for care in home and community

8. In 2014, Medicaid Will be Bigger – and Better • Medicaid enrollment will grow by 16 million non-elderly beneficiaries or 32% overall growth due to reform • Greater spending will increase Medicaid’s role in state budgets, with associated greater scrutiny, added pressure to obtain greatest possible value and to contain costs • Integration of eligibility systems with the Exchange, simplifications and use of technology should lead to efficiencies and better service and better care • “Reform has given us the opportunity to get it right.”