Lessons from Medicaid Expansion in Arizona & Maine

Transcription

1 Lessons from Medicaid Expansion in Arizona & Maine Tarren Bragdon, CEO Foundation for Government Accountability Naples, Florida or

2 Initial Projections: Reduce uninsured Reduce charity care Save general fund money Have low, predictable enrollment & costs ARIZONA Actual Outcomes: High costs Huge enrollment spikes Massive new GF costs to state Program capped and patients thrown off No reduction in charity care & hidden tax scheme

3 Arizona Proposition 204 in 2000 Use Free Tobacco Settlement $ for Medicaid Expansion Prop 204 expanded Medicaid for parents to 100% FPL (from 36%) and started covering childless adults up to 100% FPL, beginning July [Childless Adults]

4 Arizona s Prop 204 Promises Save General Fund about $30 million a year Reduce the number of uninsured Reduce charity care Reduce hidden tax on private insurance from uninsured and uncompensated care

5 160, ,000 Arizona Prop 204 Parents Expansion 149, , , ,000 80,000 77,595 86,607 89,987 60,000 40,000 20,000-38,658 50,381 41,350 17, Parent - Projected Enrollment Parents - Projected Eligible Parents - Actual Enrollment Source: Arizona Legislature's Joint Legislative Budget Committee (2001 actual and projected) & Arizona Health Care Cost Containment System ( actual, based on January enrollment).

6 Arizona Prop 204 Childless Adult Expansion 250, , , , , , , ,000 96, , ,368 86,719 50,000 53,869 66,513 81,040-28, Childless Adults - Projected Enrollment Childless Adults - Projected Eligible Childless Adults - Actual Enrollment Source: Arizona Legislature's Joint Legislative Budget Committee (2001 actual and projected) & Arizona Health Care Cost Containment System ( actual, based on January enrollment).

7 Arizona s Cost Increases from Medicaid Expansion Per Member True Cost in 2010: Childless Adults 2.5x projection 2001 Actual/Projected 2010 Projected $7, Actual $2,878 $2,800 $2,878 $1,903 $1,903 Parents - PMPY Childless Adults - PMPY Source: Arizona Legislature's Joint Legislative Budget Committee (2001 actual, 2009 projected) & Arizona Health Care Cost Containment System (2009 actual). Childless adults not covered in 2000.

8 Millions $1,800 $1,600 $1,400 $1,200 Arizona s Medicaid Expansion Spending (in millions) Projected vs. Actual $1,623 Projected Spending $1,416 $1,403 Actual Spending $1,326 $1,108 $1,000 $863 $800 $655 $600 $400 $200 $135 $216 $279 $315 $338 $363 $389 $ Source: Arizona Legislature's Joint Legislative Budget Committee ( projected) & Arizona Health Care Cost Containment System ( actual).

9 Parents Unemployment Rate The Woodwork Effect Parents Already Eligible , ,229 8% 240,000 7% 220, , % 6.1% 5.9% 5.9% 5.3% 6% 200, , % 4.6% 170,782 Dec ,910 Non-Expansion Parents 5% 4% 160, ,582 3% 140, , , , , ,380 2% 1% 100,000 0% Jan-01 Apr-01 Jul-01 Oct-01 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Non-Expansion Parents - Total Projected Eligible Non-Expansion Parent Enrollment Projected Woodwork from Parents Unemployment Rate Source: Arizona Legislature's Joint Legislative Budget Committee ( projected) & Arizona Health Care Cost Containment System ( actual). Bureau of Labor Statistics (unemployment rate in AZ).

10 Total Annual Spending Millions What s Driving the High Costs? $1,600 $1, Actual Spending (in millions) $1,407 $1,200 $1,000 $800 $659 $600 $400 $200 $0 $147 $103 $300 $151 $40 $11 $67 $48 $230 $349 Hospital Practitioner Pharmacy Transportation Other Total Prop Parents (105k) Prop Childless Adults (130k) Source: Arizona Health Care Cost Containment System (2009 actual).

11 Impact on Arizona s Hospital Charity Care/Uncompensated Care Projection: Prop 204 would dramatically reduce charity care Actual Outcome: The Arizona Hospital and Healthcare Association reports that hospital uncompensated care has increased an average of about 9 percent per year since 2000 reaching $364 million in The Lewin Group, March 6, 2009 The Medicaid Expansion went into effect July 2001.

12 Hidden Tax to Private Insurance In 2007 Arizona Hospitals had Medicaid cost shift of $407 M Uncompensated care cost shift of $390 M Worsened

13 Effect of Prop 204 on Arizona s Uninsured Rate Arizona Health Coverage Non-Elderly 100% Uninsured % 60% Medicaid 40% Other Public - Medicare/Military % Private - Individual % Private - Employer Source: U.S. Census Bureau

14 Why is Arizona Expanding Medicaid? No Real Choice. Recent federal guidance provides that expansion states like Arizona that already provide Medicaid coverage for Childless Adults up to 100% FPL, are not eligible for enhanced federal funding unless the State expands Medicaid to cover individuals up to 133% FPL Arizona s two options: 1. Do nothing, hope the feds extend the waiver, run the risk the feds don t extend the waiver letting it expire on January 1, 2014, leaving 86,000 Arizonans uninsured 2. Restore coverage of Childless Adults up to 100% FPL, open enrollment, and expand Medicaid to cover all adults from 100% to 133% FPL to secure enhanced federal matching funds

15 Initial Projections: Reduce uninsured Reduce charity care Have low, predictable enrollment & costs MAINE Actual Outcomes: High costs Huge enrollment spikes Program capped and patients thrown off No reduction in charity care & hidden tax scheme

16 2002 Childless Adult Expansion Covered childless adults up to 100% of FPL Used 1115 Wavier and federal DSH funds with annual expenditure cap (state & federal) Same promises as Arizona: lower charity care, fewer uninsured, less hidden tax on private insurance, and low enrollment and per person costs

17 Chartity Care Millions People Maine s Childless Adult Expansion and the Impact on Charity Care (in millions) $250 20,901 20,852 16,629 25,000 $200 $150 14,800 15,007 20,000 15,000 $100 11,000 10,000 $50 5,000 $- $41 $61 $67 $61 $62 $75 $100 $111 $122 $152 $186 $ Charity Care Total Projected Uninsured (<100% FPL) Projected Childless Adult Enrollment (<100% FPL) Childless Adult Medicaid Enrollment (June) Source: Maine Legislature s Fiscal Office (projections, enrollment), Maine Hospital Association (charity care)

18 Effect of Medicaid Expansion in Maine on Uninsured Rate Maine Health Coverage Non-Elderly % 80% 60% Uninsured Medicaid % Other Public - Medicare/Military 20% Private - Individual % Private - Employer Source: U.S. Census Bureau

19 LESSONS FOR OHIO Projections are historically way off Expect costs to dramatically increase Too often patients thrown off Medicaid within a few years

20 Ohio Medicaid Expansion Uncertainty Projected 2022 Costs No cost growth No population growth 5% annual cost growth 70% participation 80% participation 90% participation 70% participation 80% participation 90% participation 1.0 cost multiplier $1,936 $2,213 $2,490 $3,004 $3,433 $3, cost multiplier $2,905 $3,320 $3,735 $4,506 $5,150 $5, cost multiplier $3,873 $4,426 $4,979 $6,008 $6,866 $7, cost multiplier $4,841 $5,533 $6,224 $7,510 $8,583 $9, % annual population growth No cost growth 5% annual cost growth 70% participation 80% participation 90% participation 70% participation 80% participation 90% participation 1.0 cost multiplier $2,025 $2,315 $2,604 $3,142 $3,591 $4, cost multiplier $3,038 $3,472 $3,906 $4,713 $5,386 $6, cost multiplier $4,051 $4,629 $5,208 $6,284 $7,182 $8, cost multiplier $5,063 $5,787 $6,510 $7,855 $8,977 $10,099 1% annual population growth No cost growth 5% annual cost growth 70% participation 80% participation 90% participation 70% participation 80% participation 90% participation 1.0 cost multiplier $2,118 $2,420 $2,723 $3,285 $3,755 $4, cost multiplier $3,177 $3,631 $4,084 $4,928 $5,632 $6, cost multiplier $4,236 $4,841 $5,446 $6,571 $7,510 $8, cost multiplier $5,295 $6,051 $6,807 $8,214 $9,387 $10,561 Projections based on actual FY13 PMPM, adjusted by gender/age to reflect uninsured new eligibles age/gender distribution as baseline (1.0 cost multiplier). The demographics taken from Urban Institute report on uninsured new eligibles, assumes no woodwork or crowdout (switching from private insurance). Also shown is 5% annual PMPM cost increases.

21 Ohio Health Coverage Over Time Ohio Health Coverage Non-Elderly % 80% 60% Uninsured Medicaid % Other Public - Medicare/Military 20% Private - Individual % Private - Employer Source: U.S. Census Bureau

22 Childless Adults Cost Much More $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $5,072 $7,361 $6,394 $6,523 Kaiser: $6,058 cost per newly eligible in 2016, increasing 5%/year $5,383 CMS/Mathematica 2011 study found that childless adults were: Older and included more men More likely to become Medicaid eligible due to disability Cost approximately 60 percent higher than expenditures for adults with dependent children $- Maine Actual Arizona Actual New York Actual Florida Projection Ohio Projection Source: Who Will Enroll in Medicaid in 2014? Lessons From Section 1115 Medicaid Waivers May 2011 Per Member Per Year Childless Adults Parents

23 Projected vs. Actual Take-Up Rates Vary Dramatically Childless Adults - Expansion Maine 74% projected v. 169% actual (within 3 years) Arizona 40% projected v. 111% actual (within 3 years) Ohio 26% projected among uninsured in 2014, 19% overall. (Ohio Department of Job and Family Services) Parents - Expansion Arizona 50% projected v. 71% actual (within 3 years) and 117% actual (within 10 years) Ohio 33% projected among uninsured in 2014, 22% overall. (Ohio Department of Job and Family Services) Parents Woodwork for Currently Eligible Arizona 10% projected v. 135% actual (immediately) and 393% actual (within 2.5 years) Ohio 32% projected among uninsured in 2014, 23% overall. (Ohio Department of Job and Family Services) Massachusetts (only state with employer/individual mandate) 96% actual (Kaiser Family Foundation)

24 Projected v. Actual Key Lessons from Arizona & Maine Cost of childless adults dramatically underprojected Enrollment rates dramatically under-projected Many more people enroll, often more than entire projected uninsured population Costs and enrollments skyrocket Charity care continues to grow Uninsured rate virtually unchanged

25 Urban Institute Study August 2012 Uninsured newly eligible with OH Medicaid Expansion 578,000 90% - Childless Adults (518,000) 10% - Parents (60,000) Uninsured currently eligible but not enrolled in OH (potential woodwork) 127,000

26 Urban/Kaiser Study - Ohio No ACA ACA no Expansion ACA and Expansion Medicaid Spending - Total $256 B $263 B $321 B State share (current law) $90 B $93 B $97 B New Spending Total $7.3 B $64.6 B State share (current law) $2.6 B $6.6 B Medicaid Spending to Hospitals Reduction in Uncompensated Care (state savings) $57.4 B $80.6 B -$0.9 B 2022 Medicaid Enrollment 1,908, , ,000 Reduction in Uninsured 33% 61%

27 Urban/Kaiser Study - Ohio Portion of those with employer insurance that drop for Medicaid Portion of those with individual insurance that drop for Medicaid Portion of uninsured that enroll in Medicaid No ACA ACA no Expansion 4% 11% 69% 85% 40% 74% Take-up rate 23% 61% ACA and Expansion