1. Florida’s Medicaid Program: Update on Waiver Changes and the Impact of Health Reform Joan Alker and Jack Hoadley Georgetown University Health Policy Institute Webinar, April 5 th, 2011

2. Per-Person Five Year Growth in Health Care Costs, 2006-2010 Source: Georgetown University Center for Children and Families calculations of Kaiser Family Foundation & Health Research & Educational Trust, "Employer Health Benefits 2010 Annual Survey" (September 2010); 2006-2009 and Projected 2010 National Health Expenditure Data; Florida Agency for Health Care Administration, "Social Services Estimating Conference - Medicaid Services Expenditures" (March 1, 2011); and Florida Agency for Health Care Administration, "Social Services Estimating Conference - Basic Medicaid Caseloads, Historical and Forecasted" (January 24, 2011). 2

3. Medicaid Essential to Florida’s Health Care System o Covers 27% of Florida’s children o Pays for 51% of Florida deliveries o Pays for 2/3 of Florida nursing home days o Leading payer for HIV and mental health services o Federal/state matching program 3

4. Benefits in Florida Per State Dollar Spent 4

5. Why Are Costs Going Up? o Enrollment has grown because of the recession o Per person costs have gone down slightly, according to state from $574 to $570 o As table shows costs vary widely across populations Group servedAverage cost per month Children/Parents$211 People with disabilities $1,482 Dual-eligibles$1,741 5

6. Section 1115 Waiver Update

7. What is the Process for Approval? o Waiver expires June 30, 2011; typically 3 year renewal o Managed care possible for some populations without a waiver o Waiver was needed for Low Income Pool for hospitals, benefit limits, “Opt-out”, enhanced benefits o GAO criticized certain aspects of waiver 7

8. Who is Affected by Medicaid Pilots? Total enrollment as of February 2011: 275,856 CountyEnrollmentPercentage » Baker3,0281.1% » Broward151,60755% » Clay13,2894.8% » Duval102,70937.2% » Nassau5,2231.9% Source: February 2011 Florida Medicaid Reform Enrollment Report, AHCA 8

9. Medicaid Pilots are Small Fraction of Florida’s Medicaid Program o Medicaid pilot enrollment is 9.6% of total Florida Medicaid enrollment o Lower % of overall spending Source: February 2011 Florida Medicaid Reform Enrollment Report, AHCA 9

10. 10 Who is Enrolled in Medicaid Pilots?

11. Plan Turnover Very High from 2008- 2011 o Both HMOs and, to lesser degree, Provider Sponsored Networks have come in and out of the market o Duval County: plans representing just under 60% have changed o Broward County: plans representing 66% of market share have changed o Majority of beneficiaries likely had to change plans raising concerns re access to care 11

12. Note: PSN and HMO totals for Sept. 2008 do not equal 100% due to rounding error. Source: September 2008 and February 2011 Florida Medicaid Reform Enrollment Report, AHCA 12 Duval County Plan Enrollment, September 2008 and February 2011 PSNs HMOs Sept. 2008= 31.9% PSNs, 68.2% HMOsFeb. 2011= 48.1% PSNs, 51.9% HMOs

13. HMOs (79.1%) PSNs (20.8%) Note: PSN and HMO totals do not equal 100% due to rounding error. Source: September 2008 Florida Medicaid Reform Enrollment Report, AHCA 13 Broward County Plan Enrollment, September 2008

14. HMOs (54.2%) PSNs (45.7%) Note: PSN and HMO totals do not equal 100% due to rounding error. Source: February 2011 Florida Medicaid Reform Enrollment Report, AHCA 14 Broward County Plan Enrollment, February 2011

15. Source: Georgetown University analysis of February 2008 and February 2011 Florida Medicaid Reform Enrollment Reports, AHCA http://www.fdhc.state.fl.us/MCHQ/Managed_Health_Care/MHMO/med_data.shtml 15 Share of Enrollment in Provider Sponsored Networks Increased

16. Source: February 2008 Florida Medicaid Reform Enrollment Report, AHCA http://www.fdhc.state.fl.us/MCHQ/Managed_Health_Care/MHMO/med_data.shtml 16 Enrollment in PSNs and HMOs by Enrollment Group, February 2008

17. Source: February 2011 Florida Medicaid Reform Enrollment Report, AHCA http://www.fdhc.state.fl.us/MCHQ/Managed_Health_Care/MHMO/med_data.shtml 17 Enrollment in PSNs and HMOs by Enrollment Group, February 2011

18. Other Features of the Waiver o HMO adult benefit reductions below state plan level allowed in certain areas (outpatient therapies, home health, DME chiropractor, adult dental and hearing, podiatry) o Most HMOs have not reduced benefits; those that have done so (Sunshine, United, Medica) have substantial market share. o Most plans have added $25 OTC allowance, some adult dental and vision o“.o“. 18

19. Opt-Out Has Not Been Successful o Families can choose to apply subsidy to employer-sponsored insurance but must pay copays/coinsurance and EPSDT waived o Very low enrollment – 21 persons most recently o Administrative costs likely very very high 19

20. Source: Florida’s Medicaid Reform Enhanced Benefits Program, data from AHCA presentations at Technical Advisory Panel Meeting presentation, February 2011 20 Enhanced Benefits Credits and Purchases, by Month

21. What Will Health Reform Mean For Florida’s Medicaid Program?

22. Affordable Care Act o Effective in 2014: New coverage through Medicaid Availability of state insurance exchanges Subsidies to buy insurance through the exchange  Incomes up to 400% of poverty ($89,400 for family of four in today’s dollars) o Subsidy and Medicaid dollars = $437 per nonelderly Florida resident 22

23. Medicaid Expansions in the ACA o New eligibility for people with low incomes Childless adults Parents Adults with disabilities o Most costs met with federal funds 23

24. Medicaid/CHIP Eligibility Levels in Florida (% of Poverty), Today and After Health Reform 200% 185% 133% 24

25. Many Adults in Florida Will Gain Insurance o Today Florida has 3 rd highest uninsured rate o 54% of nonelderly adults up to 133% of poverty lack insurance o Between half and 3/4 of them would gain coverage o Most children are already covered Number Gaining Insurance 1.4 million 680,000 1.1 million 25

26. Most Funding Will Come from Federal Dollars o Over 10 years, US will pay average 94% of cost of new coverage o With this leverage, new state funds will be an increase of only 2-4 percent over current levels 26

27. AHCA Estimates of State Costs for Medicaid Expansions o AHCA published estimate of $4.1 billion for new Medicaid coverage and $2 billion for increased primary care payment Over six years, 2014 to 2019 o Unrealistic assumptions: 100% enrollment of those newly eligible 100% enrollment of eligible but not enrolled No offsetting savings 27

28. Children’s Medicaid/CHIP Participation Rates - 2008 Source: Who And Where Are The Children Yet To Enroll In Medicaid And The Children's Health Insurance Program?, Health Affairs, October 2010, http://content.healthaffairs.org/cgi/content/abstract/hlthaff.2010.0747. http://content.healthaffairs.org/cgi/content/abstract/hlthaff.2010.0747. 28

29. A Different Way to Estimate Costs o New enrollment Assume enrollment rates of 57% to 75% (Urban Institute) o Per-person costs Assume lower rate than today: sickest, most costly people are already enrolled o Consider sources of offsetting savings Less need to support safety-net providers Some people receiving state- or county-funded services become eligible for Medicaid or insurance exchanges  Medically needy  People requiring mental health or substance services 29

30. Comparing Estimates on the Impact of Medicaid Expansions in Florida SourceAHCA EstimateOur Estimate Cost of expanded Medicaid enrollment Assumes unrealistic 100% enrollment rate Assumes optimistic 75% enrollment rate Cost of raising primary care payment rates Assumes state costs after 2014 Same assumption Savings from reduced need for safety net NoneAssumes at least 25% to 50% reduction in associated costs Savings from transfer of medically needy to exchanges NoneAssumes at least 25% to 50% reduction in associated costs 30

31. Magnitude of Estimated Costs and Savings: An Alternative to AHCA Numbers Costs (billions) Expanded Enrollment Primary Care Payments Offsetting Savings Total Cost Or Savings Savings (billions) 31

32. The Bottom Line on the Impact of ACA Medicaid Expansion o AHCA estimates $6 billion in increased costs o Georgetown estimates a range from $1 billion in increased costs to possibly $3 billion in savings 32

33. For More Information o Visit the Jessie Ball duPont Fund website www.dupontfund.org o Or the Georgetown University project website http://hpi.georgetown.edu/floridamedicaid 33