Texas and the ACA Medicaid Option

Transcription

1 Texas and the ACA Medicaid Option Urban Counties Membership Luncheon February 6, 2013 Anne Dunkelberg, Assoc. Director, Center for Public Policy Priorities 7020 Easy Wind Drive -Austin, Texas (512)

2 Most Uninsured Texans are Working- Age Adults, ,000 3% of Texas Seniors uninsured 63% are below 200% FPL <2/3 are below 200% FPL million Rate: 16.3% of 0-18 are uninsured 4.8 million Rate: 30.9% of are Uninsured 6.1 million uninsured Texans (23.8% of all ages) Compare to Massachusetts: 219,000, just 3.4% of all ages Source: U.S. Census, March 2012 CPS 2

3 Most Uninsured Texans are U.S. Citizens Total: 6.1 million uninsured Texans in 2011 Non-Citizens: 60.5% uninsured rate; Approx. 1.1 million undocumented, 570,000 legal immigrants 1.67 m 4.46 m Immigrants NOT the cause of Texas last-place ranking: If all non-citizens are removed from data, Texas is still tied for worst uninsured rate with CA, FL, LA and NM but with all the immigrants still included in their rates! US Citizens: 19.7% uninsured rate Sources: CPPP Analysis of 2011 and 2012 CPS Annual Social & Econ. Supplement, two-year average for , Hispanic Center, Feb. 1, 2011 Unauthorized Immigrant Population: National and State Trends,

4 Texas Uninsured by Income % of the 6.1 million uninsured have incomes <400% FPL % FPL $67,050-$89, % FPL $55,875-$67,050 >400% FPL >$89, K 421K 656K Million <100% FPL <$22,350/yr for family of four 6.1 million includes 1.7 million non-us citizens; ~2/3 of these (about 1.1 million) likely undocumented % FPL $44,700-$55, K % FPL $33,525-$44, K 525K 614K % FPL $27,938-$33, % FPL $22,350-$27,938 Annual income limits given for a family of four, 2011 federal poverty level U.S. Census, 2012 CPS 4

5 Texas Medicaid/CHIP: Who is Helped Today Disabled, 418,368 Elderly, 320,467 Poor Parents, 143,406 CHIP, 583,151 Medicaid Children, 2,540,312 August 2012, HHSC data 25.6 million Texans 7.4 million under 19 TANF Parent, 82,660 Maternity 93,531 Total enrolled 8/1/2012: 3.6 million Medicaid; 583,000 CHIP 1 in 7 Texans, but 42% of Texas kids 5

6 Why So Few Poor Parents Covered in Texas Medicaid Texas Medicaid has VERY low coverage of parents (must live below 12% of poverty; work less than 10 min wage; must be under $308 a month for family of 3). This dollar limit set by Texas legislature 1985 and never updated. Today, about 226,000 poor Texas parents get Medicaid, even though there are about 2.6 million children enrolled. Medicaid Maternity coverage income limit is much higher, but coverage ends 2 months after birth. Medicaid does not cover undocumented at any age. LEGAL immigrant adultsnot covered in Texas Medicaid (a state choice). (Legal immigrant kidsthrough age 18 are covered in Texas Medicaid and CHIP) 6

7 Income Caps for Texas Medicaid and CHIP, % 200% $35,317/yr $35,317/yr $25,128 $38, % 100% 185% 185% $25,390/yr $19,090 $8, % 200% 50% 0% Pregnant Women 133% 100% $2,256 $3,696 12% Newborns Age 1-5 Age 6-18 TANF parent of 2, no income 19% 75% Working Parent of 2 SSI (aged or disabled) Long Term Care CHIP Mandatory Optional indicates Texas Choices to go ABOVE federal minimum Income Limit as Percentage of Federal Poverty Income Annual Income is for a family of 3, except Individual Incomes shown for SSI and Long Term Care 7

8 2014: Medicaid is a Key Health Reform Building Block Build on current system:most Americans still get coverage through their employer. Reform Private Health Insurance: standard minimum benefits, can t charge more based on health status, limits on premium differences by age, no denial of coverage, no excluding pre-existing conditions, no annual or lifetime maximums. New Health Insurance Exchanges where private insurers options can be compared and purchased. Sliding scale help with premiumsin the exchange from 100% up to 400% of FPL ($92,200 for family of 4). Sliding scale help with deductibles/co-pays and out-of-pocket capsin the exchange Individual mandate to have coverage (with major exemptions for lowest-income). Some requirements for employers to contribute if their employees get sliding-scale help in exchange, but exemption for all employers with 50 or fewer FT workers. 8

9 About 1.5 million Texans would gain insurance with Medicaid expansion Experts and Texas HHSC estimate million uninsured US citizen adults in Texas will be eligiblefor the Medicaid option in 2014, Just over half of this group is of Hispanic origin. HHSC projects just over a million of these adults would actually enrollby 2016 (note the difference between who is eligible, versus who actually signs up). HHSC also estimates that over 400,000 more children already eligible today, but unenrolled will sign up for Medicaid by 2016 because of higher public awareness: called the welcome mat effect. 9

10 But, If Texas Opts Out ACA sliding-scale premium help is available only to persons above100% FPL (exception: legal immigrants excluded from Medicaid), so: Uninsured Texas adults below 100% FPL would have NO assistance available in Those from % FPL would be eligible for premium assistance, but because the system was designed assuming poorest would have Medicaid, some of these near-poor will have difficulty affording the coverage even with premiums capped at 2% of family income. So, costs of care for uninsured poor Texas adults will continue to be carried primarily by local property taxpayers, secondarily by other charity care providers, and without benefit of the 90%+ federal matching dollars. 10

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12 Texas Uninsured: Without Medicaid Expansion, Only half as many gain coverage million uninsured 23.8% 3 million uninsured 11.6% 4.5 million uninsured 17.3% 0 Texas Now With ACA Medicaid Without ACA Medicaid Michael E. Cline, Ph.D., and Steve H. Murdock, Ph.D., Rice University, Estimates of the Impact of the Affordable Care Act on Counties in Texas, April

13 What does Texas pay, and what does federal government pay if we expand Medicaid to adults under the ACA? Federal government picks up 100% of the costs for the first three years of Texas expansion to the adults, 95% in 2017, 94% in 2018, 93% in 2019, and no less than 90 percent every year after that. Texas will also see increased enrollment known as the welcome mat effect by already-eligible but currently uninsured children. 13

14 Official HHSC Cost Estimates HHSC (Texas Medicaid) estimates the state-budget (GR) Medicaid costs to cover these new adults and welcome mat children would: total$3.1 billion GRover first four years( ), and those state funds will draw $27.2 billion in federal matching fundsfor Texas health care providers. The adult Medicaid expansioncosts Texas $1.3 billion GR, drawing another $23.9 billion in federal match. welcome mat effect newenrollment of currently eligible children costs another $1.8 billion state GR, gets us $3.3 billion federal match. 14

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17 Large Urban Counties & Medicaid Expansion Yearly Avg. $222 NEW Fed $ million Uninsured NOW El Paso Dallas Harris Lubbock Travis $580.1 million $935.3 million $77.7 million $224.1 million 208, ,492 1,025,922 66, ,067 Estimated # Gaining Medicaid 51, , ,165 19,693 55,676 Sources: Texas HHSC projections of ACA Medicaid expansion costs; THHSC historical Medicaid spending by county, Cline & Murdock estimates of ACA insurance gains by county. 17

18 Largest South Texas Metro Counties & Medicaid Expansion: Bexar Cameron Hidalgo Nueces Webb One-year Avg. $ million NEW Fed $ $ million $ million $ million $92.0 million Estimated # Gaining Medicaid 179,654 27,987 50,509 22,403 16,031 Sources: Texas HHSC projections of ACA Medicaid expansion costs; THHSC historical Medicaid spending by county, Cline & Murdock estimates of ACA insurance gains by county. 18

19 Other Gains for Counties: Reduced E.R., jail, and mental health costs if Medicaid expanded Medicaid would pick up inpatient hospital costs for large share of jail inmates (if expanded): any 24-hour stay in free-world hospital by inmates below 133% FPL. Increased Medicaid coverage of the poorest uninsured adults will reduce need for unmatched local tax revenues now supporting health care (County Indigent Health Care, public hospitals, health and hospital financing districts). Medicaid will give ongoing care for many now-uninsured adults with chronic mental health issues, which can help reduce jail and ER costs for frequent fliers. MH benefits in Medicaid will be enhanced in 2014 under ACA. Medicaid Coverage of adults will allow greater access to MH care for parents in child welfare system, and relieve local child welfare programs of bearing the full costs of this care. 19

20 Perryman: Medicaid Expansion is Only Rational Choice --Economic Benefits & Jobs Noted Texas Economist Dr. Ray Perryman estimates the Medicaid expansion would generate over 300,000 Texas jobs per year on average ( 3.03 million person-years of employment over 10 years, AFTER netting out the impact of diverting state $ for match) ). Perryman also projects net gain of $1.29 in state revenues for each $1 state funds invested in the Medicaid expansion; and Reduction of $1.21 in local taxes to support uncompensated health care; Local government revenue gain of $0.51; Over $6 increase in retail sales Increased income for the uninsured Texans who gain coverage, and a reduction in uncompensated care costs that are shifted to health insurance premiums. 20

21 How to Make This Work for Texas How do we pay for our (5% 2017, 6% 2018, 7% 2019) 10% in 2020? Premium tax revenue will go UP. Majority of births paid by Medicaid move to the higher match rate. Health care related TDCJ prison & county jail hospital costs will go DOWN. TX GRand local expenditures on mental health care go DOWN. AZ quality assurance fee, aka a provider tax. What if the Feds reduce their share in the future? Same concern in 1999 with passage of the CHIP law, so TX wrote a proviso into the law if the Feds reduce their financial commitment to the program, then TX can shut it down. This is what AZ is doing, and TX could do the same here. What flexibility options: Texas can offer a lesser Medicaid benefit package for the expansion adults, and within that expansion group offer special targeted benefits to special needs groups like those with MH conditions and chronic illnesses like HIV or diabetes Texas can initiate broad co-payments for the new adult group, and more modest co-pays for the historical population (aged, disabled, kids, maternity coverage) Latest Fed guidance makes clear limited local expansions not an option, BUT local contributions could be part of a financing strategy that allows us to do a statewide expansion. 21

22 Why did I bring up Arizona? From Governor Jan Brewer: By agreeing to expand our Medicaid program, we will: Protect rural and safety-net hospitals from being pushed to the brink by their growing costs in caring for the uninsured; Take advantage of the enormous economic benefits inject 2 Billion dollars into our economy save and create thousands of jobs; and, Provide health care to hundreds of thousandsof low-income Arizonans. With this move, we will secure a federal revenue stream to cover the costs of the uninsured who already show up in our doctor s offices and emergency rooms. Under the current system, these costs are passed along to Arizona families. Health care premiums are raised year after year to account for expenses incurred by our hospitals as they provide care to the uninsured. Saying no to this plan would not save these federal dollars from being spent or direct them to deficit reduction. No, Arizona s tax dollars would simply be passed to another state generating jobs and providing health care for citizens in California, Colorado, Nevada, New Mexico or any other expansion state. 22

23 How Medicaid Expansion Costs Compare... $3.1 billion state dollars, $27.2 billion federal match, 4 years Texas Medicaid 2011 total cost : $23 billion ($7.7 billion state $$) for health care Texas hospitals now spend over $5 billion in a single year for uncompensated care For (adult expansion) + (children s Medicaid growth) we would get$9 federal match for every $1 state (Compared to regular federal match for Texas Medicaid of $1.45 in fed funds per every $1 state dollar spent) The new Texas 1115 Medicaid Transformation waiver: local governments trying to raise $12 billion, so we can raise about $17 billion fed match ( ). If we can find $12 billion to leverage just $1.45 federal for each dollar, we should be able to find $3.1 billion to raise $9 for every dollar AND cover 1.5 million uninsured. (Over 10 years, HHSC projects 1.6 million Texans covered for $14.9 billion state funds, bringing home $90.6 billion federal dollars ) 23

24 5 Tools on Medicaid Expansion and Texas: 1. Choices and Challenges: How Texas County Uninsured Rates Will Drop Under Health Care ReformCline & Murdock, of Rice U. (former Texas State Demographer and Director of the US Bureau of the Census) includes estimates of the much smaller reduction in uninsured rates expected if Texas does not accept the Medicaid Expansion. (see 2. Your County and the ACA Medicaid Expansion. CPPP compiled data for all 254 Texas counties on impact of ACA on uninsured, and the new federal dollars by county, based on Rice data above and the Texas Health and Human Services Commission s latest official Medicaid expansion estimates. (see 3. Texas Has Only One Rational Choice: Expanding Medicaid Under the Affordable Care Act: Study by The Perryman Group Finds that Expanding Medicaid More than Pays for Itself. Analysis by The Perryman Group, every $1 spent by the State of Texas to expand Medicaid coverage under the Affordable Care Act (ACA) returns $1.29 in dynamic State government revenue over the first 10 years of the expansion Government Effectiveness and Efficiency Report 2013(January 2013). This biennial report to the Legislature by Legislative Budget Boardstaff includes a chapter analyzing the costs and benefits of the ACA Medicaid expansion and recommending that counties be enabled to finance and implement the expansion. 5. Smart, Affordable and Fair: Why Texas Should Extend Medicaid Coverage to Low-Income Adults (January 2013). This new report from Billy Hamilton Consultingprovides a comprehensive model estimating the costs and benefits to local taxing authorities (including cities, counties and hospital districts) and state government. Using the Cline- Murdock model data, the authors conclude that state match needed for the Medicaid expansion are far less than current state, local, and hospitals spending on health care for low-income adults, and project $1.8 billion in new state revenue will be generated by the expansion from 2014 through 2017, offsetting about half of the required state match. 24

25 Use of This Presentation The Center for Public Policy Priorities encourages you to reproduce and distribute these slides, which were developed for use in making public presentations. If you reproduce these slides, please give appropriate credit to CPPP. The data presented here may become outdated. For the most recent information or to sign up for our free Updates, visit CPPP Center for Public Policy Priorities 7020 Easy Wind Drive, Suite 200 Austin, TX P 512/

26 To help protect your privacy, PowerPoint has blocked automatic download of this picture. Texas Coalitions & Campaigns Working on ACA Implementation and/or Medicaid-CHIP Support 26

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28 Center on Budget and Policy Priorities Medicare and Medicaid Controlled Costs Better than Private Insurance Over the Last Decade Average Annual Growth Rate, % 8% 7% 6% 5% 4% 3% 2% 1% 0% 4.6% Medicaid Per Beneficiary 5.1% Medicare Per Beneficiary 7.2% Private Per Capita, Comparable to Medicare 7.7% Private Employer Insurance Premiums cbpp.org 6 28

29 Top Concerns: Block Grants, per-capita Cap Block grant, PCCwould lock Texas into our historically low Medicaid spending, far below national average. Both result of low provider fees and minimal coverage of parents. Also locks in recent rate cuts, like physician fees and Medicare Equalization Does not provide for cost surges due to medical advances; (recent example, use of anti-retrovirals) Does not provide for natural disaster or recession surges in enrollment Rewards states that have not attempted to economize with a higher cap. Texas would either have to spend more state funds on Medicaid, or significantly shrink our Medicaid spending on a per-beneficiary basis. 29

30 WHY IS HEALTH SPENDING IN THE UNITED STATES SO HIGH? 30

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