1. A Forecast for the Changing Environment for Medicaid and Managed Care Michigan Association Health Plans Summer Conference July 18, 2015 © 2015 Vsmith@HealthManagement.com

2. Source: HMA estimates 2015. Medicaid: The Nation’s Largest Single Health Program Insurance Status of Americans, 2015

3. 2 Medicaid Enrollment: A 50 – Year Look at America’s Largest Single Health Program Millions of U.S. Medicaid Beneficiaries. Growth by decade. SOURCE: 1966 – 2010: HMA analysis of CMS and CBO historical data and Medicaid projections, 2015. 2005 1995 1985 Projected 0% +64% +52% 2015: 70 Million

4. 3 1.1 Million 2.3 Million

5. 4 Note: Does Not Include “Plan First” 1,866,000 2,341,000 1,748,000

6. Projection of U.S. Medicaid Enrollment to 2025 5 SOURCE: HMA estimates, based on CMS Medicaid projections, 2015. Millions of U.S. Medicaid and CHIP Beneficiaries 52 Million

7. 6 A Majority of All Americans Will Soon Obtain Coverage through Four Public Programs Source: HMA, 2015. Millions of Beneficiaries 142 Million (44% of Americans) 172 Million (51% of Americans)

8. Medicaid Spending Over 50 years: 1965 - 2015 7 $13 $41 $160. Note: Includes CHIP 1998 - 2015. Source: HMA, based on CMS, Office of the Actuary, 2015. 1967 3.1 Bil. $Billions

9. Projection of Medicaid Spending, by Type of Payment, to 2025 8 Sources: 2000 – 2020, CMS Actuary, July 2015. For 2025, HMA estimate. $206 $316 $945 $Billions

10. Medicaid Spending, by Type of Payment 2000 to 2025 9 Sources: 2000 – 2020, CMS Actuary, 2014 Actuarial Report, July 2015. For 2025, HMA estimate. $Billions Capitation Payments Actual Projection

11. Total Spending on Medicaid and K–12 Education as % of Total State Spending Average State Percentages, 2008 – 2014 10 Note; Medicaid share of state GF spending was 19% in 2014. Source: HMA, based on data in: NASBO, State Expenditure Report, 2014 and Earlier Years. Medicaid: The largest source of federal funds to states: 51%

12. How Will Medicaid Change Over the Next Decade? – What direction for payment and delivery system reform? – Medicaid’s role in population health and social determinants? – Will innovations achieve value, access, quality, accountability, performance, cost savings? – Will integration of care achieve results for persons with disabilities, chronic conditions, behavioral health, long term care and duals? – Will role of managed care continue to grow? What impact from the proposed managed care regs? – Can Medicaid be fiscally sustainable for states and feds? – What new strategies will states use under Section 1332? – What will a new President and Congress do to Medicaid ? 11

13. Our Panel: Lindsey Browning, NAMD Mark Hamelburg, AHIP Jeff Myers, MHPA

14. Michigan Association of Health Plans Summer Conference A Forecast of the Changing Environment for Medicaid and Managed Care July 18, 2015 Mark Hamelburg

15. America’s Health Insurance Plans (AHIP) is the national trade association representing the health insurance industry. AHIP’s members provide health and supplemental benefits to more than 200 million Americans through employer-sponsored coverage, the individual insurance market, and public programs such as Medicare and Medicaid. AHIP advocates for public policies that expand access to affordable health care coverage to all Americans through a competitive marketplace that fosters choice, quality and innovation. 14

16. Overview 50th Anniversary CMS Vision of the Future: Proposed Regulation o What does it look like? 7 key themes o What does it mean? 15

17. CMS Vision Alignment with Other Programs Quality Financial Rules Oversight Beneficiary Information Managed Long Term Services and Supports (MLTSS) State Role 16

18. What Does it Mean? Some Improvements, Some Concerns Increased Federal Expectations for Plans and States o Costs o Risks o Relationship Between Plans and Regulators This is a lot of change at once - and more coming 17

20. 50 Years of Medicaid Evolution Jeff M. Myers President and CEO Medicaid Health Plans of America July 8th, 2015 Copyright Medicaid Health Plans of America. MHPA, 2015©

21. Everybody Knows That Copyright Medicaid Health Plans of America. MHPA, 2015©

22. What Everybody Knows Source: Actuarial Report on the Financial Outlook for Medicaid 2010; CMS projection from CMS Presentation by B. Edwards. $380.6B FY2009 Source: Actuarial Report on the Financial Outlook for Medicaid 2011-2014; Dec 2014 Enrollment Report; CMS projection from CMS Presentation $546B FY2015 Projected Copyright Medicaid Health Plans of America. MHPA, 2015©

23. MN NJ NY OH OR PA TN TX WA AZ CA FL GA KY LA MD MI AR DC DE IA IL KS UT MO MS NE ND NH RI WV CO IN KY MA NM NV SC WI VA AK AL CT ID ME MT NC OK SD WY VT >800 K 400- 800K <400 K >50M and 23M and Source: State of Medicaid 2014; PricewaterHouseCoopers, What You May Not Know – Part 1 Copyright Medicaid Health Plans of America. MHPA, 2015©

24. Note Delta between CBO 2105 MCO+ Estimate and CBO 2015 FFS Estimate Copyright Medicaid Health Plans of America. MHPA, 2015© Federal Spending in Billions Source: Medicaid Spending and Enrollment Detail; CBO May 2013 baseline and CBO March 2105 Baseline What You May Not Know – Part 2

25. Copyright Medicaid Health Plans of America. MHPA, 2015© Underlying Trend #2: Managing the Most Frail

26. Duals hit 342K Enrollees! All States Underperforming! CA IL MA OH VA 129,306 57,686 17,608 64,594 26,176 MI 9,632 NY 7,215 SC 1,698 TX 28,212 Underlying Trend #2: Managing the Most Frail Copyright Medicaid Health Plans of America. MHPA, 2015© Not Quite

27. Copyright Medicaid Health Plans of America. MHPA, 2015©

28.  Coordination of Medicaid MCOs with other forms of Insurance  MLTSS Roadmap for States  IMD expansion  State options on Network Adequacy and Quality Measures  Focus on Rate Adequacy  Nationwide MLR provisions  Beneficiary protections or Provider Profit Protections?  Can State Medicaid Systems handle CMS data requests? Copyright Medicaid Health Plans of America. MHPA, 2015©

29. Bottom Line: Expect Significant Input from Stakeholders; Significant detail to those comments; Broad impact on a Variety of Stakeholders = May be a longer than expected Review Time Copyright Medicaid Health Plans of America. MHPA, 2015©

31. THOUGHTS OR QUESTIONS?