Actuarial Report Findings by CCRC Actuaries LOCHHRA Meeting December 7, 2009

Development of the Actuarial Model Model constructed by the West Virginia Health Care Authority 3-years worth of claims data (2005, 2006 and 2007) voluntarily pooled by Mountain State Blue Cross Blue Shield, Medicaid, PEIA, The Health Plan, Coventry and CHIP. Both medical and pharmaceutical claims Averaged slightly more than 865,000 West Virginians “HIPAA” de-identified

Development of the Actuarial Report Analysis performed by CCRC Actuaries Paid for by the Sisters of St. Josephs Charitable Fund, West Virginia Chamber of Commerce, Mountain State Blue Cross Blue Shield and the West Virginia State Medical Association.

Electronic Prescribing (In Millions of Dollars by 2014)

Electronic Prescribing (In Millions of Dollars by 2019)

Health Information Technology: (In Millions in 2014)

Health Information Technology: (In Millions in 2019)

Design of the Health Information Technology (HIT) Projections Pilot Project with 400 Physicians and 15 Hospitals Phase-in state-wide Note: the American Recovery and Reinvestment Act provides $19 billion nationally for HIT. West Virginian’s share could be $300 million.

Medical Home Initiative (in 2014)

Medical Home Initiative (in 2019)

Design of the Medical Home Initiative 1,800 physicians participate state-wide Initial subsidy of $25,000 per physician $20 PMPM ($370 million not included in savings projections) Assumes an 8 percent reduction in claims by 2011 based on PEIA’s experience with disease management and high prevalence of obesity, diabetes and cardiovascular disease in West Virginia

Expand Medicaid to Adults (Millions in 2014)

Current Eligibility and Impact of Expanding Medicaid to Adults Currently, most adults do not qualify for Medicaid. The exceptions are: –Parents earning less than 35% of FPL about $6,100 a year –Disabled adults and pregnant women 59,200 new Medicaid beneficiaries Congress is considering expansion to133% or 150% of FPL and paid for almost exclusively by the federal government

Expand Medicaid Plus an Individual Mandate (2014 in millions)

Individual Mandate Issues Subsidies for individuals are unaffordable at the state level, beginning at $410 million in 2014 and growing to $1.3 billion in 2019 Reduces the number of uninsured by 63% by 2014 This projection assumes medium cost sharing (26% paid by consumers)

Expand Medicaid Plus an Individual and an Employer Mandate (2014 in millions)

Impact of an Expansion of Medicaid Plus an Individual and Employer Mandate Reduce the number of uninsured West Virginians 84% by 2014 Cost of subsidizing coverage for individuals and families is high: $417 million in 2011 and $1.3 billion in 2019

Comparison of Total State Spending by CCRC Actuaries and Kenneth Thorpe Doing nothing is expensive. 96% increase in ten-years. Total health care costs in billions of dollars

Comparison of CCRC Actuaries Numbers and Kenneth Thorpe’s Numbers Savings projection are not based on identical assumptions, but the results are similar: Thorpe’s projections included health information exchange (HIE), medical homes and primary prevention initiatives. CCRC’s projections included e-prescribing, medical homes and health information technology (HIT).

Comparison of the Savings Projections by CCRC Actuaries and Kenneth Thorpe (in billions)