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0 Medicaid Spending Trends: A 50-State Study Kavita Choudhry, MPP Governmental Research Association Annual Policy Conference August 5, 2014 www.pewtrusts.org/healthcarespending.

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Presentation on theme: "0 Medicaid Spending Trends: A 50-State Study Kavita Choudhry, MPP Governmental Research Association Annual Policy Conference August 5, 2014 www.pewtrusts.org/healthcarespending."— Presentation transcript:

1 0 Medicaid Spending Trends: A 50-State Study Kavita Choudhry, MPP Governmental Research Association Annual Policy Conference August 5, 2014

2 1 Project Overview Objectives: –Cohesive picture of state health care spending –Help policymakers gain a better understanding of cost drivers in specific health care areas –Highlight practices that may contain costs while maintaining or improving health outcomes State Health Care Spending Medicaid & CHIP Mental health Substance abuse Prison health care State employee health benefits State retiree health benefits

3 2 Companion Report: Tracking Key Health Indicators Uninsured rates Poverty rate % of residents over 65 Demographics & Uninsured Overall health status Rate of serious mental illness Rate of substance abuse Health Status Life expectancy Infant mortality Low birth-weight babies Vital Statistics Asthma  Diabetes Smoking  Obesity rates Prevalence Childhood immunizations  Mammography Hemoglobin A1c  Appropriate surgical care Nursing home pressure sores Prevention & Treatment

4 3 About Medicaid Our country’s largest health insurance program 66 million low-income Americans covered in 2010 Total program cost (2012): $429 billion Provides health insurance coverage for low income individuals Children and parents Elderly and individuals with disabilities Jointly funded but state-run: Federal dollars cover between 50% and 74% of expenditures

5 4 Nationally, Medicaid spending grew 63% from 2000 to 2012—a compound annual growth rate of 4.1%. This growth is on par with US overall health care spending which rose by 58%. Annual Medicaid Spending Growth, 2000 to %

6 5 21% of Americans had Medicaid coverage for at least a portion of Medicaid enrollment is a key determinant of program spending. Factors such as poverty rates, state decisions to expand eligibility, and the reach of private insurance coverage drive differences in Medicaid enrollment. Percent of Residents Enrolled, 2010

7 6 Medicaid enrollment grew 50%, from 44 million to 66 million over the last decade Uninsured grew 23%, from 36 million to 50 million over the same period Trends in Health Insurance Coverage, 2000 to 2012 Employer- sponsored Medicaid Uninsured Medicare Direct Purchase

8 7 Spending per enrollee for Medicaid remained relatively stable, rising only 5% from 2000 to Overall health care spending per person grew 39% over the same period. Spending Per Person: Medicaid vs US overall health care, 2000 to 2010 Overall health care Medicaid

9 8 Elderly and disabled individuals make up 24% of Medicaid enrollment and accrue 64% of Medicaid payments for services. Not all Medicaid Enrollees Cost the Same, % 64%

10 9 The composition of Medicaid enrollees varies dramatically by state and impacts per enrollee spending. In 9 states, at least 30% of Medicaid enrollees are elderly or disabled. Elderly or Disabled Enrollees as a Percent of Medicaid Enrollment, % 38%

11 10 The states’ share of Medicaid expenditures was $181 billion in 2012, or 16% of states’ own-source revenues. Variation across states is driven by factors affecting both Medicaid spending and own-source revenues. State-funded Medicaid Spending as a Percent of Own Source Revenue, % 26%

12 11 The Share of State-Generated Revenues Spent on Medicaid Increased State spending on Medicaid increased from 12 percent of states’ own-source revenues to 16 percent between 2000 and 2012.

13 Kavita Choudhry

14 Prison Health Care Spending State Employee Health Plan Spending Maria Schiff August 5, 2014

15 Prison Health Care Spending State Health Care Spending Medicaid & CHIP Mental health Substance abuse Prison health care State employee health benefits State retiree health benefits

16 A legal standard for care

17 States’ correctional health care spending nationwide totaled $7.7 billion in 2011, down from a peak of $8.2 billion in fiscal 2009.* Spending increased in majority of states from fiscal 2007 to However, spending also peaked in most states prior to A similar trend occurred on a per-inmate basis. The share of prisoners 55 and older rose in all but two (HI & MS) of 42 states. *spending reported in 2011 dollars. Topline Findings

18 Spending peaked in a majority of states before Total Prison Health Care Spending Grew 13% from 2007 to 2011

19 Per inmate spending on prison health care grew 10% over the last 5 years From per-inmate health care spending rose in 39 states Average per-inmate spending was $6,047 in For comparison, Medicaid national average was $6,254 in 2010.

20 Key Cost Drivers Size of prison population Health status of inmates Age of inmates

21 Prison Populations Skyrocketed 677 Percent from 1971 to 2011 Notes: Annual figures prior to 1977 reflect the total number of sentenced prisoners in custody. Beginning in 1977, all figures reflect the jurisdictional population as reported in the Bureau of Justice Statistics’ “Prisoners” series. Sources: Sourcebook of Criminal Justice Statistics, University at Albany; US Department of Justice, Bureau of Justice Statistics

22 Recent downturn in prison population Primary driver in spending downturn Pew survey showed:  Average daily prison population peaked in 2009 and then began to fall  National downturn in prison population heavily influenced by California’s large downturn

23 Health status of inmates Higher incidence of chronic and infectious diseases, such as AIDS and hepatitis C, and mental illness. In 2010, roughly 65 percent had an alcohol or drug use disorder  Seven times more likely than individuals in the community to have such a condition. 1/3 suffered from mental illness 1/4 had a co-occurring mental illness and substance use disorder National rate of hepatitis C among inmates was 17.4 % in Rate in general population is 1%.

24 Older inmates More susceptible to chronic medical and mental conditions  Dementia, impaired mobility, and loss of hearing and vision Experience the effects of age sooner  Substance use disorder, inadequate preventive and primary care prior to incarceration, and stress  Cost at least 2-3 times as much as younger to treat inmates  Necessitate increased staffing levels, more officer training, and special housing

25 The Number of Prisoners Age 55+ Increased by 204%,

26 The Share of Older Inmates in State Prison Populations Hawaii and Mississippi did not experience increase in older prisoners during study period

27 States with older inmates tended to have higher per-inmate spending

28 Promising cost containment strategies Strategic use of telehealth. Effective management of outsourcing agreements. Enrolling eligible prisoners in Medicaid. Using medical or geriatric parole policies.

29 Enrolling eligible prisoners in Medicaid Qualifying services limited to inpatient care delivered outside of prison. Medicaid does not cover health care delivered inside prisons. States can obtain federal Medicaid reimbursement for inpatient health care provided outside of prison. States expanding Medicaid eligibility under the ACA likely to benefit most.

30 State Employee Health Plan Spending State Health Care Spending Medicaid & CHIP Mental health Substance abuse Prison health care State employee health benefits State retiree health benefits

31 State Employee Health Plan Spending Report to be released Tuesday, August 12 th Second largest state health care spending after state contribution to Medicaid 100% financed by state dollars Spending is determined by (among other things): –Plan design –Take up rate –Provider price and practice patterns –Composition of state workforce

32 State Health Care Spending Project Source: Truven Health Analytics State and Local EnrolleesPrivate Sector Enrollees 57% female51% female 25% age % age Diabetes: 65.9 patients per 1,000 members Diabetes: 44.4 patients per 1,000 members Hypertension: patients per 1,000 members Hypertension: 90.5 patients per 1,000 members Overweight: 10.2 patients per 1,000 members Overweight: 7.9 patients per 1,000 members Source: Truven Health Analytics

33 State Health Care Spending Project Advantages: – States have a preponderance of employees in one city and are often that city’s (and the state’s) largest employer. Can set performance standards, exert influence to reform care delivery and payment methodology – Possibility for locally based initiatives such as reference pricing, on site primary care clinics, etc. – Longer employee tenure (and state responsibility for retirement health care) means investing in health improvement, disease management, smoking cessation may bring more of a return than in private sector

34 States spent $31 billion to insure 2.7 million employees in 49 states in Average PEPM (2013): $963  State: 84%  Employee: 16% + $70 per month in cost-sharing Most popular plan PEPM average (2013): $971 Source: Milliman Atlas of Public Employer Health Plans Topline Findings

35 Darker shades of green represent states with higher average premiums PEPM. Average Premiums PEPM by State - Range: $461 - $1,465

36 Continued Average actuarial value (2013): 92% (platinum level) 19 states offered at least one plan with a deductible of at least $1,500 in – Only 4 percent of employees nationwide are enrolled in one Adjusting plans for richness narrows the PEPM range, but much variation remains. Other factors: provider prices and practice patterns, service utilization, age and health status, and breadth of network

37 Darker shades of green represent states with higher average actuarial values. Average Actuarial Value by State – Range:83% - 98%

38 Darker shades of green represent states with higher average PEPMs. Average % of Premiums Paid by Employee – Single Coverage R ange: 0% - 42%

39 38 Check Out Our Reports Spending Reports & Data Visualizations State Spending on Medicaid Prison Health Care Spending State Employee Health Plan Spending (August 12 th ) Tracking Key Health Indicators Related Issue Briefs Combating Medicaid Fraud and Abuse Managing Prison Health Care Spending The Cadillac Tax (Late August)

40 Maria Schiff


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