Katherine Record, JD, MPH, MA Senior Fellow, Center for Health Law & Policy Innovation Harvard Law School March 2013

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1 Extending Medicaid to Reduce HIV Transmission & Health Related Costs in Texas: Modeling the Transition of Ryan White Clients into Medicaid & Private Insurance in 2014 Katherine Record, JD, MPH, MA Senior Fellow, Center for Health Law & Policy Innovation Harvard Law School March 2013

2 Outline Modeling the 2014 Transition for HIV+ Individuals: a Lens into the Impact of the Affordable Care Act Extending Medicaid is Optional because it s a Completely Different Program Massachusetts a preview of the impact of the Affordable Care Act HIV in Texas Choosing not to Extend Medicaid is Dangerous for the State

3 The Modeling Project: a Lens into the Impact of the ACA Modeling uses HIV because national data is available Benefit comparisons & numbers reflect state preparedness for any chronic disease Delivery & payment of healthcare is revolutionizing whether states resist or not Cost of patients with chronic conditions will ruin state budgets without extending Medicaid diabetes, cancer, CVD It s about the right care, right place, right time not the emergency room

4 Why Extending Medicaid is Optional: Not Just the Unemployed Anyone making less than $14,500 / year ($29,700 for family of 4) 86% of employed but uninsured Texans work full time in small businesses 62% of small businesses cannot afford to provide health insurance; compared to only 33% in 1995 (nationally) Source: Health Texas, Report on Senate Bill 10, Section 25, 80 th Legislature Regular Session, Healthy Texas Phase II Report (http://www.tdi.texas.gov/reports/life/documents/hlthytxph2rpt09.pdf) Small Businesses Hit Hard by Economy Consider Dropping Health Coverage, New York Times, Feb 3, 2009.

5 Why Extending Medicaid is Optional: Health Homes Extended Medicaid Reduces State Costs 90% federal match rate for all medicaid patients that qualify Risk assessment places high cost patients into a health home (those with HC costs that are 50% higher than average typically are 10 times more likely to be hospitalized; 150 times more likely to use ER unnecessarily) Care coordinator keeps patient in care; avoiding ER 2 in 10 patients with mental illness see a MH provider Wang P et al, Twelve-month Use of Mental Health Services in the United States, Arch. Gen Psychiatry, 62 (June, 2005) Washington DSHS Research & Data Analysis Division, Integrated Client Database (Jan. 2012).

6 Massachusetts a preview of the impact of the Affordable Care Act Expanded Medicaid coverage to pre-disabled people living with HIV with an income up to 200% FPL (2001) Enacted private health insurance reform with a heavily subsidized insurance plan for those with income up to 300% FPL (2006) Protected a strong Medicaid program for already & newly eligible The MA case study provides insight into how health reforms work. 6

7 Massachusetts Reform: Improved Health Outcomes Notes: MA outcomes are based on Massachusetts and Southern New Hampshire HIV/AIDS Consumer Study Final Report, December 2011, JSI Research and Training, Inc.; National outcomes are based on Cohen, Stacy M., et. al., Vital Signs: HIV Prevention Through Care and Treatment United States, CDC MMWR, 60(47); (December 2, 2011); For both MA and national outcomes, the percentages used are taken from a baseline of those infected, using the same estimated percentage diagnosed (82%) both nationally and for Massachusetts, based on the MMWR. The definition of In Medical Care may differ slightly between the MA data and the MMWR.

8 Massachusetts Reform: Reduced Transmission of HIV; Lower Mortality Rates Percent Change in HIV Diagnoses and Death Rates (MA v. U.S.) 10% 0% -10% -20% 2% MA U.S. -30% -40% -25% -33% -50% -44% Percent Change in HIV Diagnosis Rate ( ) Percent Change in HIV Death Rate ( ) Between 2006 & 2009, Massachusetts new HIV diagnoses rate fell by 25% compared to a 2% national increase Current MA new HIV diagnoses rate has fallen by 46% Between 2002 & 2008, Massachusetts AIDS mortality rate decreased by 44% compared to 33% nationally Sources: MA Dept of Public Health, Regional HIV/AIDS Epidemiologic Profile of Mass: 2011, Table 3; CDC, Diagnoses of HIV infection and AIDS in the United States and Dependent Areas, 2010, HIV Surveillance Report, Vol. 22, Table 1A; CDC, Diagnoses of 8 HIV infection and AIDS in the United States and Dependent Areas, 2008, HIV Surveillance Report, Vol. 20, Table 1A.

9 Massachusetts Reform: Proves that Expanding Medicaid LOWERS Hospital Costs Massachusetts cost per Medicaid beneficiary living with HIV has decreased, particularly the amount spent on inpatient hospital care Source: MA Office of Medicaid, data request 9

10 Massachusetts Reform: Proves that Expanding Medicaid LOWERS all Healthcare Spending Reforms reduced HIV health care expenditures by ~$1.5 billion in past decade (MA Dept. Public Health)

11 Waiting to Cover People Until they re Disabled Wastes Millions of State Dollars $1,200 Average Monthly Cost Eligibility, Average Monthly Cost (Millions) $1,000 $800 $600 $400 $200 $765 $159 $339 $996 $192 $439 ABD Children Adults ABD = aged, blind, disabled $ Source: Texas Health and Human Services Commission, Texas Medicaid and CHIP in Perspective: Seventh Edition,

12 Expanding Medicaid Does Not Put the State at Fiscal Risk Can opt out anytime (can expand in way that triggers automatic cut off if federal funding falls) Costs state % more than currently spending on Medicaid (excludes all savings it will bring; includes woodwork population) Opportunity to extend Texas impressive Waiver reforms to millions more - Managed care plans can use utilization review, manage drug formularies, performance based reimbursement to control costs Cost sharing increases skin in the game ($8 for unnecessary ER visit & $3-$8 prescriptions if < 150% FPL; 8% coinsurance & unlimited copay if over) Not extending hurts US citizens the most Pays for mental health and substance abuse services

13 What if Texas Doesn t Expand Medicaid? HIV epidemic will spiral out of control Healthcare expenditures will continue to skyrocket Hospitals will close State will forgo hundreds of thousands of jobs & billions in business activity

14 State Will Lose Control of HIV Epidemic Future Ryan White Funding is NOT secure FY Texas spent $32,138,127 on ADAP State spending on ADAP grows every year (more people infected; higher cost of treatment) Already becoming unsustainable Dept. of State Health Services is considering limiting eligibility By extending Medicaid - 53% of state s ADAP clients eligible for Medicaid (conservative estimate accounts for ineligibility of undocumented residents and insured ADAP clients) Texas Dept. of State Health Services, HIV/STD Program (July 2012)

15 Number of People Infected with HIV will Increase 3,192 diagnosed in % connected to care within 3 months 17% never connected with care 27% HIV+ Texans didn t get HIV treatment in 2011 (nearly 20,000 individuals) 18% are getting NO medical care at all 38% are bouncing in and out of care over 36,000 people at increased risk of transmitting HIV to another Texan Texas Dept. of State Health Services, HIV/STD Program (July 2012)

16 Health Care Expenditures Will Continue to Skyrocket as People Delay Treatment Until Very Sick 60% 50% 40% 30% 20% 10% Health Behavior of Adult Americans With and Without Health Insurance, % 51% 14% Insured Uninsured 19% 20% 30% 0% Did not see doctor for specific medical condition due to cost concerns Took Medication at lower dose than prescribed to cut costs Skipped filling prescription because of financial concern Most Insured Adults Worry About Health Care Costs: Poll, HealthDay News, March 9,

17 Hospitals Will Close Medicaid uncompensated care payments will be cut in half by 2019 (Texas received > $1 billion in 2010) Rising cost of uncompensated care in nonexpansion states will be detrimental to the economy Republic Gov. Brewer, Arizona At minimum Texas will save $5.8 billion on uncompensated care (may be as high as $11.6 billion) in first 10 years Increased Medicaid reimbursement rate = 82% increase for Texas PCPs (all federal money) Source: National Association of State Mental Health Program Directors, 2012 Urban Institute & RWJF, 2011 based on 5 year estimates (http://www.urban.org/uploadedpdf/ consider-savings.pdf)

18 Hospitals Already Struggling 20 Total Uncompensated Care Charges Billions of Dollars Over $20 Billion in Source: 2010 Cooperative DSHS/AHA/THA Annual Survey of Hospitals and Hospital Tracking Database; Texas Fact Sheet by Hospital Survey Unit, Center for Health Statistics, Texas Department of State Health Services (www.dshs.state.tx.us/chs/hosp/fact2011.doc) Year

19 In Short Not Extending Medicaid Means Texans will pay millions in tax dollars to: Leave thousands uninsured Let billions of Texans federal tax dollars go into other states Maintain mental health and addiction services as state burden Leave hospitals subject to huge federal cuts Keep spending state money on care federal government is offering to cover Forgo over 300,000 new jobs in healthcare Forgo $276 billion in general business activity

20 For an electronic copy of this presentation and other information about the Affordable Care Act, see: This presentation was funded in part through a grant from Bristol-Myers Squibb, with no editorial review or discretion 20

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