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1 Medicaid Expansion Estimates Demographics and Cost April 24, 2013.

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Presentation on theme: "1 Medicaid Expansion Estimates Demographics and Cost April 24, 2013."— Presentation transcript:

1 1 Medicaid Expansion Estimates Demographics and Cost April 24, 2013

2 2 Medicaid Expansion - Eligibles Medicaid expansion under the ACA allows states to cover individuals up to 138% FPL Household of 1 - $15,856 per year Household of 4 - $32,499 per year (2013 FPL guidelines) Estimate 48,564 additional people would be eligible for Medicaid if the state expands to 138%FPL Per ACA individuals between 100% - 138% FPL can access tax subsidies to purchase insurance through the exchange Approximately 22,000 individuals

3 3 The Uninsured in South Dakota To understand the Medicaid eligibles one needs to have an understanding of the uninsured In 2011, 71,204 (8.8%) of South Dakotans were uninsured Overall, the uninsured are young over half (56%) is between the ages of 18 and 34 29% between the ages of 18 and 24 27% between the ages of 25 and 34 61% of the uninsured up to 138% Federal Poverty Level (FPL) are between the ages of 18 and 34 Among adults aged 18 to 64, 53% are male and 47% female

4 4 The Uninsured in South Dakota Information taken from Market Decisions Report – 2011 South Dakota Health Insurance Survey.

5 5 The Uninsured in South Dakota As a group, the uninsured are poorer, and more live in poorer families 41% of adults aged 18 to 64 are in families whose income was less than 100% FPL (based on 2011 FPL data family of one - $10,890; family of four - $22,350- ) 25% of adults aged 18 to 64 live in families whose annual income is between 100% and 199% FPL Only 4% of adults in families earning 300% of FPL or greater were uninsured

6 6 The Uninsured in South Dakota Information taken from Market Decisions Report – 2011 South Dakota Health Insurance Survey.

7 7 The Uninsured in South Dakota There are geographic differences among the uninsured Nearly six in ten uninsured adults aged reside either in the West Region (30%) or the Southeast Region (27%). 15% of adults reside in American Indian counties 69% of uninsured adults are white while 27% are Native American 17,598 Native American adults aged 18 – 64 do not have heath insurance, but 80% (14,086) have health care coverage through Indian Health Services

8 8 The Uninsured in South Dakota Information taken from Market Decisions Report – 2011 South Dakota Health Insurance Survey.

9 9 The Uninsured in South Dakota 10% of working adults aged 18 to 64 were without health insurance compared to 23% of adults aged 18 to 64 that are currently not working 63% of uninsured adults are employed; nearly two- thirds (65%) of uninsured adults are employed full time 20% work for themselves while 21% work for an employer between two and nine employees 60% work for a private company while 31% are self- employed or work for a family business or farm

10 10 Medicaid Expansion - Eligibles Who are the new eligibles? Adults Without disabilities; Single or Parents between 49%-138% FPL

11 11 Medicaid Expansion - Eligibles

12 12 Medicaid Expansion - Services Expansion population must be provided “Essential Health Benefits” (EHB) per the ACA 1. Ambulatory Patient Services 2. Emergency Services 3. Hospitalization 4. Maternity and Newborn Care 5. Mental Health and Substance Use Disorder Services 6. Prescription Drugs 7. Rehabilitative and Habilitative Services & Devices 8. Laboratory Services 9. Preventive and Wellness Services and Chronic Disease Management 10. Pediatric services, including oral and vision care Most EHB already covered by Medicaid Would have to add substance use disorder services for adults

13 13 Medicaid Expansion - Costs Federal government will pay an enhanced share for services to the expansion group FMAP for services to expansion group by calendar year is % % % % % Administrative costs continue at current match rate- 50%

14 14 Medicaid Expansion - Costs Assumptions: Cost estimates for the expansion population based on the only current coverage group for non-disabled or non-pregnant adults Low Income Families with children Growth rates - cost 5% per year - benefit costs and administrative costs Growth rates - eligibles Take up rates 40% SFY14, 90% SFY15, 100% SFY16 1% per year SFY17-SFY20 Same services would be provided for existing population Cost estimates are gross costs

15 15 Medicaid Expansion - Costs SFY 2014SFY 2015SFY 2016SFY 2017SFY 2018SFY 2019SFY 2020 Total thru SFY2020 Eligible Benefit Costs (in millions) Federal and State$57.4$272.7$321.2$340.9$361.5$383.3$406.5$2,143.4 Federal Spending$57.1$272.1$320.5$331.7$340.9$357.7$371.3$2,051.2 State Spending $.3 $.6 $.7 $9.2 $20.6 $25.6 $35.2 $92.2 (50/50) Admin Costs (in millions) Federal and State $2.4 $2.6 $2.70 $2.8 $3.0 $3.10 $3.30 $19.90 Federal $1.2 $1.3 $1.35 $1.4 $1.5 $1.55 $1.65 $9.95 State $1.2 $1.3 $1.35 $1.4 $1.5 $1.55 $1.65 $9.95 Total Benefits and Administration (in millions) Federal and State $59.8 $275.3 $ $343.7 $364.5 $ $ $2,163.2 Federal $58.3 $273.4 $ $333.1 $342.4 $ $ $2,061.1 State $1.5 $1.9 $2.05 $10.6 $22.1 $27.15 $36.85 $102.1 Federal %97.5%99.3%99.4%96.9%94.0%93.0%91.0%95.3% State % 2.5% 0.7% 0.6% 3.1% 6.0% 7.0% 9.0% 4.7%

16 16 Medicaid Expansion - Costs Total annual cost $59 million FY14 to $409 million FY20 Total annual administrative cost- $2.4 million to $3.3 million 39 FTE Total annual general fund cost $1.5 million FY14 to $36.8 million FY20

17 17 Medicaid Expansion - Costs States that expand Medicaid also expect to see an increase in the number of people currently eligible but that have not yet applied – the “woodwork” effect Estimates 5,500 (primarily children) $2.7 million FY14 to $16.8 million FY20 No enhanced match rate – regular FMAP applies Even if the state does not expand Medicaid, there will likely be some “woodwork effect” with outreach surrounding the healthcare exchanges

18 18 Medicaid Expansion – Costs Savings Opportunities: One argument for expansion is an assumption of state savings by shifting state funded programs to Medicaid Potential savings opportunities Public Health Programs (Breast and Cervical Cancer, Family Planning/HIV Aids) State funded high risk pools Uncompensated Care costs Behavioral Health Services Emergency medical/inpatient care for indigent inmates s

19 19 Medicaid Expansion – Costs Unlike other states, South Dakota does not have generally funded programs that could be covered by Medicaid for the expansion population Public Health Programs (Breast and Cervical Cancer, Family Planning/HIV) No general funds used to support these programs through Dept. of Health Medicaid currently provides full coverage for women screened by DOH and found to have Breast and Cervical Cancer

20 20 Medicaid Expansion – Costs State subsidized high risk pools No state subsidized program in South Dakota Uncompensated Care Costs Savings potential at the county or provider level. No direct savings to the Medicaid program unless there is a agreement to shift savings to the state. Behavioral Health Services Unlike many other states, South Dakota does not currently expend 100% general funds for Behavioral Health services except those required for Maintenance of Effort for Mental Health and Substance Abuse block grants. Criminal Justice Initiative – potential opportunity

21 21 Medicaid Expansion – Costs Emergency Medical Care for Indigent Inmates: Inmates who meet all other Medicaid requirements are eligible for Medicaid while incarcerated. However there is a prohibition from using federal funds for otherwise eligible inmates unless in a medical institution for 24 hours (hospitalized) Currently pregnant women who are inmates and otherwise eligible for Medicaid most commonly covered expenses Potential savings opportunity in this area $859,000 general funds phasing down to $773,100 annually after 2020 y to

22 22 Medicaid Expansion – Costs Final Rule published March 29, 2013 outlines methodology to determine “newly eligible” for the purposes of claiming enhanced FMAP. Need further study to assess any state savings opportunities with this new guidance

23 23 Thank You!


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