The Affordable Care Act: Putting Reform into Medicaid and Medicaid into Reform

1. The Affordable Care Act: Putting Reform into Medicaid and Medicaid into Reform Cindy Mann, JD CMS Deputy Administrator Director Center for Medicaid, CHIP & Survey & Certification Centers for Medicare & Medicaid Services Texas Center for Public Policy Priorities September 23, 2010

2. CMCS: Our Mission • To help States make Medicaid and CHIP the best programs they can be and to contribute to the broader goal of improving health care for all Americans • Beneficiaries are our focus

3. Implementing the Affordable Care Act • Working with States and Insurance Commissioners • Coordinating with other federal agencies • Sharing ideas about what reform means with a broad array of stakeholders • Promulgating regulations and guidance

4. Progress So Far • Establishing State High Risk Pools & Federal Pre-existing Condition Insurance Plan (PCIP) • Delivering small business tax credits • Establishing a retiree reinsurance program • Accelerating efforts to reduce waste, fraud, and abuse • Implementing a new Patient’s Bill of Rights; prevention regulations • Guidance on new Medicaid options

5. Building a Foundation • Consumer web portal, www.HealthCare.gov • HHS and IRS are working closely to develop a common set of standards for data exchange • Reduce expenses and uncertainty in building interfaces • Working to get funding to States quickly for all of the health reform efforts including: • Rate review grants to hold insurers accountable for unreasonable insurance rate increases • Consumer grants to enhance States’ ability to address consumer inquiries, file appeals and help people enroll in coverage • Exchange State planning grants to assist States in their planning for implementation

6. A System of Coverage Medicaid/ CHIP Exchange Employer Coverage

7. Projected Changes in Coverage by 2019 Total new coverage = 32 million Source: Congressional Budget Office, March 2010

8. Sources of Coverage by 2019 24m 51m 22m 25m 159m (For All Individuals under 65) Source: Congressional Budget Office, March 2010

9. Putting Medicaid into Reform • Medicaid coverage for adults up to 133% of the federal poverty line • CHIP and Medicaid coverage for children at higher incomes (States’ March 23, 2010 levels) • Increased federal funding across the board

10. State Financial Impacts • Significant increase in federal support for Medicaid/CHIP • 100% match for “newly eligible” group for 3 years and 95-90% match thereafter • Increased match for “childless adults” in “expansion” states (reaches 93%/90% in 2019/2020) • Increased match for CHIP in 2016 (enhanced plus 23 percentage points) • Regular federal match for remaining currently eligible groups

11. Who Pays? Estimated Distribution of Costs for Medicaid Coverage Changes: 2014-2019 (in billions) Total $464.7 billion Source: Medicaid Coverage and Spending in Health Reform, John Holahan and Irene Headen/Kaiser Commission, May 26, 2010.

12. Other State Financial Impacts • Certain State-funded services may no longer be needed • Reductions in uncompensated care and cost shifting • Greater efficiencies • DSH funding declines (as will State contributions)

13. New Paradigm • Not a “safety net” but a full partner in assuring coverage for all • Eligible = enrolled • Law contemplates a system made up of different components to achieve seamless coverage, quality and cost containment objectives

14. Putting Reform into Medicaid Creating a high performing Medicaid program • Systems upgrades and data/performance standards • Delivery and payment reforms • Focus on “dual eligibles” • Further progress (re)balancing long-term care services and supports • Close attention to program integrity

15. The “Triple Aim” Population Health Per Capita Cost Experience Of Care

16. Effects of the Affordable Care Act on Per Capita National Health Expenditures US Insured Population (Millions) NHE Per Insured Person

17. Top 5% of Enrollees Accounted for More than Half of Medicaid Spending in FY 2008 Top 5% Elderly 16.80 % Disabled 31.79% Adults 1.75% Children 3.72% Top 5% Elderly 1.82% Disabled 2.61% Adult .21% Children .36% 54% 5% Bottom 95% of Enrollees Bottom 95% of Enrollees Enrollees Total = 60.6 million Expenditures Total = $292.9 billion Source: FY MSIS 2008, FY MSIS 2007 for AZ, NC, ND, HI, UT, VT, WI

18. 2014 Begins Now! 18

19. Collaboration with States is Essential Data Performance Standards Systems Support FMAP Rules Benefit Designs Eligibility Rules Basic Option Federal Actions 2014 2010 Exchange/ Medicaid Org Structure Provider Networks/ Contracts Staffing Training Adopt New Laws/Budgets System Changes New Rules/Forms Enrollment … State Actions

20. Lessons from Children’s Coverage Efforts: Success is Possible Percentage of Children Without Health Insurance, By Poverty Level, 1998-2009 Children below 200% of poverty 23% 16% 12% 6% Children above 200% of poverty 5% 5% • Uninsurance rates for childrenhave steadily dropped due to Medicaid/CHIP • Coverage levels holding steady even in economic downturn • Disparities are narrowing

21. Children’s Coverage Does Not Need to Wait The Secretary’s Challenge: Enroll the 5 million uninsured children who are currently eligible for Medicaid or CHIP over the next five years

22. Children in Texas Rate of Medicaid/CHIP Participation & Distribution of Eligible but Uninsured Children in the Largest Counties (2008) 53 - 70% 71 - 80% 81 - 85% Rest of State 74.9% (35.4 percent of children in Texas live in counties that cannot be distinguished from other counties using the ACS.) Source: Analysis of Urban Institute's Health Policy Center ACS Medicaid/CHIP Eligibility Model, based on data from the 2008 American Community Survey (ACS) September 17, 2010.

23. Key to Reaching Our Goals: Assuring that all Partners are at the Table