Florida ’ s Medicaid Program: Update on Waiver Changes and the Impact of Health Reform

1. Florida’s Medicaid Program: Update on Waiver Changes and the Impact of Health Reform Joan Alkerand Jack Hoadley Georgetown University Health Policy Institute Webinar, April 5th, 2011

2. Per-Person Five Year Growth in Health Care Costs, 2006-2010 Source: Georgetown University Center for Children and Families calculations of Kaiser Family Foundation & Health Research & Educational Trust, "Employer Health Benefits 2010 Annual Survey" (September 2010); 2006-2009 and Projected 2010 National Health Expenditure Data; Florida Agency for Health Care Administration, "Social Services Estimating Conference - Medicaid Services Expenditures" (March 1, 2011); and Florida Agency for Health Care Administration, "Social Services Estimating Conference - Basic Medicaid Caseloads, Historical and Forecasted" (January 24, 2011).

3. Medicaid Essential to Florida’s Health Care System • Covers 27% of Florida’s children • Pays for 51% of Florida deliveries • Pays for 2/3 of Florida nursing home days • Leading payer for HIV and mental health services • Federal/state matching program

4. Benefits in Florida Per State Dollar Spent

5. Why Are Costs Going Up? • Enrollment has grown because of the recession • Per person costs have gone down slightly, according to state from $574 to $570 • As table shows costs vary widely across populations

6. Section 1115 Waiver Update

7. What is the Process for Approval? • Waiver expires June 30, 2011; typically 3 year renewal • Managed care possible for some populations without a waiver • Waiver was needed for Low Income Pool for hospitals, benefit limits, “Opt-out”, enhanced benefits • GAO criticized certain aspects of waiver

8. Who is Affected by Medicaid Pilots? Total enrollment as of February 2011: 275,856 Source: February 2011 Florida Medicaid Reform Enrollment Report, AHCA

9. Medicaid Pilots are Small Fraction of Florida’s Medicaid Program • Medicaid pilot enrollment is 9.6% of total Florida Medicaid enrollment • Lower % of overall spending Source: February 2011 Florida Medicaid Reform Enrollment Report, AHCA

10. Who is Enrolled in Medicaid Pilots? Source: February 2011 Florida Medicaid Reform Enrollment Report, AHCA

11. Plan Turnover Very High from 2008-2011 • Both HMOs and, to lesser degree, Provider Sponsored Networks have come in and out of the market • Duval County: plans representing just under 60% have changed • Broward County: plans representing 66% of market share have changed • Majority of beneficiaries likely had to change plans raising concerns re access to care

12. Duval County Plan Enrollment, September 2008 and February 2011 PSNs Sept. 2008= 31.9% PSNs, 68.2% HMOs Feb. 2011= 48.1% PSNs, 51.9% HMOs HMOs Note: PSN and HMO totals for Sept. 2008 do not equal 100% due to rounding error. Source: September 2008 and February 2011 Florida Medicaid Reform Enrollment Report, AHCA

13. Broward County Plan Enrollment, September 2008 PSNs (20.8%) HMOs (79.1%) Note: PSN and HMO totals do not equal 100% due to rounding error. Source: September 2008 Florida Medicaid Reform Enrollment Report, AHCA

14. Broward County Plan Enrollment, February 2011 PSNs (45.7%) HMOs (54.2%) Note: PSN and HMO totals do not equal 100% due to rounding error. Source: February 2011 Florida Medicaid Reform Enrollment Report, AHCA

15. Share of Enrollment in Provider Sponsored Networks Increased Source: Georgetown University analysis of February 2008 and February 2011 Florida Medicaid Reform Enrollment Reports, AHCAhttp://www.fdhc.state.fl.us/MCHQ/Managed_Health_Care/MHMO/med_data.shtml

16. Enrollment in PSNs and HMOs by Enrollment Group, February 2008 Source: February 2008 Florida Medicaid Reform Enrollment Report, AHCA http://www.fdhc.state.fl.us/MCHQ/Managed_Health_Care/MHMO/med_data.shtml

17. Enrollment in PSNs and HMOs by Enrollment Group, February 2011 Source: February 2011 Florida Medicaid Reform Enrollment Report, AHCAhttp://www.fdhc.state.fl.us/MCHQ/Managed_Health_Care/MHMO/med_data.shtml

18. “. Other Features of the Waiver • HMO adult benefit reductions below state plan level allowed in certain areas (outpatient therapies, home health, DME chiropractor, adult dental and hearing, podiatry) • Most HMOs have not reduced benefits; those that have done so (Sunshine, United, Medica) have substantial market share. • Most plans have added $25 OTC allowance, some adult dental and vision

19. Opt-Out Has Not Been Successful • Families can choose to apply subsidy to employer-sponsored insurance but must pay copays/coinsurance and EPSDT waived • Very low enrollment – 21 persons most recently • Administrative costs likely very very high

20. Enhanced Benefits Credits and Purchases, by Month Source: Florida’s Medicaid Reform Enhanced Benefits Program, data from AHCA presentations at Technical Advisory Panel Meeting presentation, February 2011

21. What Will Health Reform Mean For Florida’s Medicaid Program?

22. Affordable Care Act • Effective in 2014: • New coverage through Medicaid • Availability of state insurance exchanges • Subsidies to buy insurance through the exchange • Incomes up to 400% of poverty ($89,400 for family of four in today’s dollars) • Subsidy and Medicaid dollars = $437 per nonelderly Florida resident

23. Medicaid Expansions in the ACA • New eligibility for people with low incomes • Childless adults • Parents • Adults with disabilities • Most costs met with federal funds

24. Medicaid/CHIP Eligibility Levels in Florida (% of Poverty), Today and After Health Reform 200% 185% 133% 133% 133% 133%

25. Many Adults in Florida Will Gain Insurance • Today Florida has 3rd highest uninsured rate • 54% of nonelderly adults up to 133% of poverty lack insurance • Between half and 3/4 of them would gain coverage • Most children are already covered 1.4 million 1.1 million 680,000 Number Gaining Insurance

26. Most Funding Will Come from Federal Dollars • Over 10 years, US will pay average 94% of cost of new coverage • With this leverage, new state funds will be an increase of only 2-4 percent over current levels

27. AHCA Estimates of State Costs for Medicaid Expansions • AHCA published estimate of $4.1 billion for new Medicaid coverage and $2 billion for increased primary care payment • Over six years, 2014 to 2019 • Unrealistic assumptions: • 100% enrollment of those newly eligible • 100% enrollment of eligible but not enrolled • No offsetting savings

28. Children’s Medicaid/CHIP Participation Rates - 2008 Source: Who And Where Are The Children Yet To Enroll In Medicaid And The Children's Health Insurance Program?, Health Affairs, October 2010, http://content.healthaffairs.org/cgi/content/abstract/hlthaff.2010.0747.

29. A Different Way to Estimate Costs • New enrollment • Assume enrollment rates of 57% to 75% (Urban Institute) • Per-person costs • Assume lower rate than today: sickest, most costly people are already enrolled • Consider sources of offsetting savings • Less need to support safety-net providers • Some people receiving state- or county-funded services become eligible for Medicaid or insurance exchanges • Medically needy • People requiring mental health or substance services

30. Comparing Estimates on the Impact of Medicaid Expansions in Florida

31. Magnitude of Estimated Costs and Savings: An Alternative to AHCA Numbers Primary Care Payments Offsetting Savings Total Cost Or Savings Expanded Enrollment Costs (billions) Savings (billions)

32. The Bottom Line on the Impact of ACA Medicaid Expansion • AHCA estimates $6 billion in increased costs • Georgetown estimates a range from $1 billion in increased costs to possibly $3 billion in savings

33. For More Information • Visit the Jessie Ball duPont Fund website • www.dupontfund.org • Or the Georgetown University project website • http://hpi.georgetown.edu/floridamedicaid