Medicaid and CHIP: On the Road to Reform Cindy Mann, JD CMS Deputy Administrator Director Center for Medicaid, CHIP and Survey & Certification Centers for Medicare & Medicaid Services Alliance for Health Reform/Kaiser Family Foundation March 4, 2011

Implementing the Affordable Care Act Working with States (Governors offices, Medicaid, CHIP, Insurance Commissioners) Coordinating with the Center for Consumer Information and Insurance Oversight (CCIIO), IRS/Treasury, other federal agencies Listening to what reform means to a broad array of stakeholders Promulgating regulations and guidance; providing technical assistance 2

Source: Congressional Budget Office, March 2010 Sources of Coverage by 2019 for Individuals Under 65 25m 23m 24m 51m 159m

Not a safety net but a full partner in assuring coverage, quality and cost containment Simplified rules and process (eligible = enrolled) A system of coverage and care New Paradigm Exchange Employer Coverage Medicaid/ CHIP Medicaid/ CHIP

Percentage of Population Under 133% of the FPL Uninsured vs. Medicaid Covered 66% 17% 35% 42% 23% 43% Source: HHS ASPE analysis of the 2010 Annual Social and Economic Supplement to the Current Population Survey

Minimum Medicaid Eligibility Levels Now and 2014 PopulationCurrent Minimum Eligibility Levels (average) 2014 Minimum Eligibility Levels Children 100%/133% (241%) 241% Parents 41% (64%) 133% Disabled Adults 74% (SSI-related) 133% Other Adults 0%*133% * 5 States provide Medicaid or Medicaid look-alike coverage to certain childless adults; 15 States provide a limited benefit package to certain childless adults. Average - Will vary by State

2014 Health Insurance Subsidies Medicaid/CHIP Children 0 133% FPL 241% FPL 400% FPL Exchange Subsidies Adults Children Medicaid Adults Varies by State

First Steps: Modernized, Efficient Systems IT Guidance 1.0 for Medicaid and the Exchange NPRM on Medicaid Eligibility Systems 90% FFP for eligibility and enrollment system design and development until 12/31/15 75% FFP for system maintenance Established 7 Conditions & Standards 7 Exchange Innovator Grants and Collaborative 8

Estimated Distribution of Costs for Medicaid Coverage Changes: (in billions) Total $464.7 billion Who Pays? Source: Congressional Budget Office and Medicaid Coverage and Spending in Health Reform, John Holahan and Irene Headen/Kaiser Commission, May 26, 2010

Current Fiscal Pressures Enrollment among families and children has grown sharply due to the recession Medicaid is intended to be a countercyclical program Despite enrollment growth, state Medicaid spending declined during the recession The Recovery countercyclical FMAP increase resulted in a 10% drop in state spending on Medicaid in 2009 While enrollment growth explains recent growth in costs, the real cost drivers lie elsewhere 10

Concentration of Medicaid Spending Source: Medicaid Statistical Information System Claims Data for FY % 5 % 54% 10% 95% 50% 5% Percentile of Medicaid Population (Ranked by Spending) Percent of Total Medicaid Spending 0% 20% 40% 60% 80% 100%

Coverage: Pathway to Better Care, Better Health, Lower Costs Per Capita Cost Experience Of Care Population Health

Focus on Medicaid Cost Drivers Existing Authority & New Initiatives Benefits & Cost-Sharing Integrated Care for High-Cost Beneficiaries; improving care transitions; reducing unnecessary hospitalizations Purchasing Drugs More Efficiently Assuring Program Integrity Working individually with States (MSTAT) What CMS is Doing to Help States Reduce Costs Now

Health Care Expenditures $7,464 Average Cost of One Hospital Admission for a Non-Dual Disabled Medicaid Enrollee Annual Cost of Providing Health Coverage to One Parent under Medicaid Source: CMS data analysis and Urban Institute analysis of data from MSIS and CMS Form 64, prepared for Kaiser Commission on Medicaid and the Uninsured, Kaiser Family Foundation-State Health Facts, FY 2007.

Focus on Dual Eligibles Source: CMS data and Urban Institute analysis of data from MSIS and CMS Form 64, prepared for Kaiser Commission on Medicaid and the Uninsured, Kaiser Family Foundation-State Health Facts, FY Total Spending = $311 billion Duals as Share of Medicaid Spending Dual Eligibles Non-Duals 39% 61% Non-Disabled Adults Children Duals

Achieving a High Performing Medicaid Program States and the Federal Government working together to achieve: Simplified, accurate, customer-friendly, data driven eligibility/renewal processes that are fully coordinated with the Exchange Eligible = Enrolled Access to person-centered, high quality, integrated care with options for continuity of coverage with plans on the Exchange Continuing quality and cost improvement in our health care system, based on consumer and other stakeholder input, data, and collaboration.

High Performing Medicaid Program