1. Medicaid Opportunities & Challenges Task Force June 25, 2013 Jeff Bechtel, Senior Consultant National Medicaid Expansion Update: Nebraska, Iowa, Arkansas & Other Developments

2. * Kaiser Family Foundation analysis as of June 17, 2013. Subject to change. Reflects updated information from South Dakota Governor’s Office. Where States Stand Now on Medicaid Expansion 2 Executive Status: Proposing expansion: 30 Not proposing expansion: 15 Weighing options: 6

3. Arizona lawmakers endorsed a Medicaid expansion plan backed by Gov. Jan Brewer after months of stalled negotiations. Medicaid expansion remains stalled in many states where Republican Governors have supported Expansion (e.g. Florida, Michigan, Ohio). Recent reporting suggests that advocates in many states plan to seek Medicaid expansion ballot initiatives in 2014. Drawbacks for advocates: Many states do not permit citizen-initiated ballot measures; and Most ballot measures would face the voters late next year, which means expansion couldn’t start until 2015 at the earliest. Situation is fluid in many states with discussion of special sessions being called on the Medicaid expansion. Summary – National Developments 3

4. Gov. Dave Heineman (R) pledged on June 28, 2012 to block any effort to expand Nebraska’s Medicaid program. “As I have said repeatedly, if this unfunded Medicaid expansion is implemented, state aid to education and funding for the University of Nebraska will be cut or taxes will be increased.” Supporters floated a series of compromise measures, including a sunset proposal on the expansion that would let lawmakers reevaluate it, or withdraw altogether if promised federal funding is not provided, but could not overcome a filibuster. Nebraska Medicaid Expansion Activity 4

5. On June 5, Nebraska’s legislative session ended without the passage of a bill to implement Medicaid expansion. Nebraska legislature passed a resolution to study the issue over the interim. The study will include aspects of Medicaid expansion including cost sharing, emergency department utilization, Medicaid payment reform, the impact on the economy, and the purchase of Medicaid coverage on the state’s federal-facilitated Exchange. Findings will be reported to the legislature. Nebraska Medicaid Expansion Activity (cont’d) 5

6. State Governance: Gov. – R; House – R; Senate – D Governor Branstad initially opposed to expansion. Statement early this year: Opposed to expansion “[b]ecause we think the whole thing in the end will either collapse or the burden will be pushed onto the states in a very significant way.” In May of this year, however, Gov. Branstad reached a bipartisan agreement to expand Medicaid to low-income adults up to 138% FPL. Iowa Medicaid Expansion Update 6

7. Iowa proposes to expand Medicaid to 138%, but will do so using two “delivery systems.” The expansion population up to 100% FPL will receive benchmark Medicaid benefits similar to the plan offered to state employees; and The 100% - 138% FPL population would receive a benchmark plan offered through the exchange. To implement this proposal, Iowa will need an 1115 waiver to: Utilize the premium subsidy approach to purchase insurance through the exchange for the 100%-138% group; and Impose cost-sharing (in this case, premiums). Under current federal law, individuals btw. 101-150% FPL cannot be charged premiums. Iowa Medicaid Expansion Approach 7

8. Iowa does not appear to be proposing a “partial expansion” where it would seek to receive 100% FFP for covering individuals up to 100% of FPL only. To obtain a 1115 waiver for a premium subsidy approach, Iowa must (per CMS guidance): Demonstrate “cost effectiveness”; Guarantee a choice of two QHPs; and Make arrangements with QHPs to provide necessary “wrap around” benefits and cost sharing assistance. Note that CMS has indicated that it is willing to consider a “limited number” of Medicaid premium assistance demonstrations. It is unclear whether CMS will permit Iowa to impose cost sharing beyond (or different) than what is provided for under current federal rules. Iowa Medicaid Expansion Approach Observations 8

9. Arkansas passed a Medicaid Expansion bill in April, adopting the “premium subsidy” approach. While CMS and Arkansas have reached “conceptual agreement,” Arkansas must first obtain a federal waiver. As part of the waiver process, Arkansas must submit a public notice of its intent to submit a waiver, hold at least 2 hearings, respond to comments, submit the application to CMS, etc. In other words, much work remains to be done. At present, Arkansas has not yet issued its public notice to initiate this process. Arkansas Update 9

10. Discussion 10

11. Questions? Sellers Dorsey sellersdorsey.com Jeff Bechtel Senior Consultant Sellers Dorsey 717.695.4342 jbechtel@sellersdorsey.com 11