Texas Needs A Comprehensive Plan to Expand Health Care Coverage, Improve Quality and Control Costs in While Maximizing Available Federal Funds

Transcription

1 Texas Needs A Comprehensive Plan to Expand Health Care Coverage, Improve Quality and Control Costs in While Maximizing Available Federal Funds

2 Texas Association of Community Based Health Plans Texas Association of Community Based Health Plans (TACHP) is an association of 11 non-profit safety net health plans affiliated with health care systems TACHP members all contract with the State for Medicaid Managed Care, serving 1.4 million low-income Texans Name Affiliate Organization City Community First Health Plans Bexar County Hospital District (University Health) San Antonio Community Health Choice Harris County Hospital District (Harris Health) Houston Cook Children's Health Plan Cook Children s Health Care System Fort Worth Driscoll Health Plan Driscoll Children's Hospital Corpus Christi El Paso First Health Plans El Paso County Hospital District El Paso FirstCare Health Plans Covenant Health and Hendrick Health System Lubbock Parkland Community Health Plan Dallas County Hospital District (Parkland Health) Dallas Scott & White Health Plan Scott & White Healthcare Temple/Waco Seton Health Plan Seton Healthcare System Austin Sendero Health Plans Travis County Healthcare District (Central Health) Austin Texas Children's Health Plan Texas Children s Hospital Houston 2

3 Texas, We Have a Problem: The Uninsured 3

4 Texas, We Have a Problem: 6 Million Uninsured Federal Poverty Level Number of Uninsured Percent of Uninsured < 100% 2,295,143 37% 100%-199% 1,893,761 31% 200%-399% 1,410,012 23% >400% 567,686 9% Total 6,166, % Percentage of Population 44% 39% 22% 9% 27% 4

5 Texas We Have a Problem: 8 Reasons Texans are Uninsured 5

6 The Results of Large Uninsured Population Sources: USA Today. 6

7 Between a Rock and a Hard Place Status quo is not sustainable Six million uninsured Texans State expenditures for Medicaid keep rising (but without its caseload growth in last 10 years, uninsured would be nearly 8 million) Texas ERs, safety net clinics and hospitals cannot keep up with demand Health care costs for Texas employers and individuals continue to rise, employer-sponsored insurance in Texas is shrinking Federal funding for safety net providers (DSH, UPL, etc.) is in jeopardy Texas desperately needs additional funds for mental health services Federally facilitated exchange (ACA default) is simply Un-Texas The Medicaid expansion and health insurance exchanges as called for in the ACA face widespread opposition Expanding a broken system Federal bureaucracy But billions of Federal dollars are available to cover 3-4 million Texans 7

8 Is there a middle way? We need a unique Texas solution that: Greatly reduces the number of uninsured Texans Eases the burden of implementing ACA Builds a Texas health insurance marketplace that facilitates families across income levels to find appropriate coverage Consolidates fragmented programs and simplifies administrative burdens for patients, providers and employers Improves access, accountability and quality of health care services Slows the upward spiral of health care costs Protects and expands capabilities of safety net providers Brings home Texas tax dollars to meet Texans health care needs CMS can approve (practical, not ideological) 8

9 Federal Reforms without Medicaid Expansion 1.05 million Texans 9

10 Medicaid Expansion Overwhelmingly Funded by Federal Government Becca Aaronson Weighing Medicaid Expansion. The Texas Tribune. January 10,

11 Expanding Coverage/Drawing Federal Dollars is Good for Texas Economy Economic analysis repeatedly demonstrates that drawing available Federal funds in ACA is good for Texas: Rice University/S. Murdoch (April 2012) Estimates of the Impact of the Affordable Care Act on Texas Counties Ray Perryman (Oct. 2012) Texas Has Only One Rational Choice: Expanding Medicaid Under the Affordable Care Act Texas Impact/B. Hamilton (Jan. 2013) Smart, Affordable and Fair: Why Texas Should Extend Medicaid Coverage to Low-Income Adults (New Federal funds would allow offsets and savings in other state programs and county indigent care/public hospital programs. At Mar. 8 Appropriations hearing, he estimated state GR offsets of $1.2 billion in next biennium, more than offsetting entire cost to state.) HHSC estimates that under ACA, Medicaid expansion would cover 1 million Texans, and HIX would enroll 2 million HHSC estimates 10 year cost of $9 billion (without offsets); $80 billion in new Fed dollars 11

12 Expanding Coverage Under the ACA California vs. Texas ACA Strategy California Texas Uninsured as of 12/31/ million 6 million Medicaid Expansion 1.9 million 0 Medicaid Woodwork 200K 100K Individual Marketplace 1.4 million 734K Small Business Health Options Program (SHOP)?? Increased ESI Take-up rate 820K 450K No Solution 1 million 800K 12

13 The State of Medicaid in Texas Texas Medicaid expenditures continue to rise Number of enrollees has doubled in the past 15 years Safety net for the children of the working poor (nearly half of the state s kids) Backbone of the safety net for the aged and disabled Texas Medicaid has undergone many improvements Expansion of Medicaid managed care saves the state $ billions SB7 in 83 rd session expands managed care to disabled children and other waiver populations Costs per enrollee in Medicaid managed care have been flat the past 5 years Pharmacy carve-in to managed care improves quality and saves $ millions Capitated managed dental care improving access and saves $ millions Dramatic changes in detection and recovery of waste, fraud and abuse Administrative simplification beginning Millions of dollars at risk for plans to document and improve quality Texas Medicaid has become a market-focused program, state funded but not a state-run bureaucracy 13

14 Total Medicaid Cost Rising, but Cost/Enrollee in MCOs is Flat 14

15 Quality Improvements in Texas Medicaid Texas Medicaid pediatric quality indicators better than national averages in 4 of 5 categories Emergency department utilization lower for Texas Medicaid than national HEDIS mean Over 95% of children/adolescents covered under Texas Medicaid report PCP visits each year Texas Medicaid Well-child visits (ages 3-6) increased from 71% in 2008 to 80% in 2010 Well-care visits for adolescents under Texas Medicaid increased from 51% in 2008 to 63% in 2010 With increasing incentives to MCOs, scores will show continued improvement 15

16 Recognizing Real Problems with the ACA Texans don t like mandates, they want choices Health insurance exchange, as set out in law and draft regulations, is good idea tangled in too much bureaucracy Long list of Essential Health Benefits, limits on deductibles and underwriting may cause premiums to rise and remain unaffordable; and diminish consumerism in health care purchasing Even with the subsidies of the exchange, millions of Texans will find health insurance unaffordable Long-term growth rates of Federal health programs are unsustainable and must be addressed Many feel that Medicaid is broken, and expanding would consume even more of the state budget Separation between Medicaid/CHIP and commercial health insurance in the exchange leads to both administrative confusion and barriers to moving from safety net programs to self-reliance 16

17 Texas-Style Health Care Reform: Guiding Principles Principle 1: Increase personal accountability for health Provide choices of insurance plans and benefit options, but not so many variations that making informed choices is nearly impossible Encourage and support cost-sharing for everyone small copayments even for low-income individuals Improve transparency of costs, both premiums and the cost of medical services Encourage healthy behaviors and consumerism Principle 2: Reduce uninsured by offering a plan to everyone in need A basic benefit plan; it does not have to be a Cadillac plan Health benefit plans that facilitate families maintaining coverage across income levels. Sliding scale premium contributions based on income Reduce or eliminate administrative variations between the current Medicaid, CHIP, individual and group health insurance markets We cannot fix the big problem of health care costs with 6 million uninsured Texans. 17

18 Texas-Style Health Care Reform: Guiding Principles Principle 3: Rein in rising costs by transforming delivery of care and provider payments Provide more coordinated, less fragmented care Assure fair, reasonable payments to physicians, hospitals and other providers based on quality and outcomes Restructure payment mechanisms to reward use of proven treatment plans and to reduce over-treatment with interventions that don t add value Reduce the administrative burden on providers Protect and expand the capabilities of safety-net providers Principle 4: Stabilize and consolidate funding sources Consolidate fragmented programs and simplify administrative burdens on patients, providers, employers and the State itself Maximize Federal funds available; bring home Texas tax dollars Replace complex supplemental provider funding with fair, up-front payments Aggressively push health plans to guarantee long-term stability of premiums 18

19 Current Fragmented Safety Net System 19

20 The Impacts of Fragmentation How we currently pay for the care of the uninsured: Texas ERs, safety net clinics and hospitals cannot keep up with demand Indigent care funded at county level is inconsistent and unsustainable Uncompensated care costs for providers continues to skyrocket Employers pay hidden tax for insurance due to uncompensated care Employer-sponsored insurance in Texas is shrinking Texas desperately needs additional funds for mental health services Jails should not be the number one provider of mental health and substance abuse services Federal funding for safety net providers (DSH, UPL, etc.) is in jeopardy 20

21 Solutions Across State Lines 21

22 Solutions Across State Lines, Cont d Arkansas (filed and approved) Private Option Waver approved by CMS. Uses premium assistance to purchase commercial coverage through the exchange Affected population includes low-income childless adults and parents between the ages of 19 and 65 with income below 133% FPL Enrollees over 100% are currently subject to cost sharing Developing a pilot project to create a health savings account program to promote cost-effective health use Arizona (filed and approved) Enhanced version of privately operated, Medicaid managed HMO programs Includes copayments for many services Indiana (filed, not yet approved) Healthy Indiana Plan Waiver approved by CMS. Uses Medicaid managed care plans to deliver an alternative benefit package Affected populations include low-income uninsured childless adults and parents with income below 100% FPL Coverage is subject to $1,000 deductible and benefits are capped at $300,000 annually with a $1 million lifetime cap Participants are provided with HAS-like POWER accounts to pay for deductibles and cost sharing; accounts are funded through a combination of participant and state contributions Iowa (filed and approved) Iowa Wellness and Marketplace Choice Plans Waiver approved by CMS Uses a combination of premium assistance (Marketplace Choice Plan) and ACOs (Wellness Plan) to provide coverage. Wellness Plan covers primarily low-income adults with income below 100% FPL; Marketplace covers adults with income between 101% and 133% FPL. Marketplace Choice participants will be charged monthly premiums not to exceed $10 per month; Wellness Plan participants will pay monthly premiums not to exceed $5 per month. (Both are subject to a total out-of-pocket max never to exceed 5%) Pennsylvania (filed, not yet approved) Utilizes the premium assistance model to pay for premiums for Marketplace QHPs for eligible individuals including parents with incomes between % FPL. Cost sharing for certain enrollees between % FPL Michigan (filed and approved) Healthy Michigan will cover childless adults ages between 0-138% FPL and nonworking parents above 37% FPL and working parents above 64% FPL Will require copayments, income-based contributions to a HSA and premiums 22

23 A Uniquely Texas Market-Based Approach A New Healthy Texas Program A 5-year blueprint to simplify and transition Medicaid, CHIP, county indigent care programs and the ACA s Exchange into one integrated program Healthy Texas: a marketplace available to all legal residents under 400% of FPL, based on consistent core benefits but varying levels of costsharing/subsidy (a better, more comprehensive health insurance exchange) Healthy Texas benefits based on Texas-specific Core Health Benefits Utilize existing Texas licensed managed care organizations (MCOs) infrastructure already in place Keep Texas families together in the same health plan as income changes Draw down additional Federal funds available for Medicaid expansion, Basic Health Option and individual subsidies in ACA (a plan CMS will approve) Cover 4 million uninsured Texans without increasing State and local tax burden (1 million more than under ACA) 23

24 Simplify: A New Healthy Texas Fully Implemented in

25 Simplify: A New Healthy Texas Replacing Multiple Programs (and most county indigent care programs) 25

26 Illustrative New Healthy Texas Program Parameters Tier (FPL) Core Health Benefits Enrollee Copayments Enrollee Premium Share Tier 3 ( %) Tier 2 ( %) Tier 1 (0-100%) Covered services (same in all tiers), similar to small employers as determined by Texans, with enhanced wraparound benefits for children, aged and disabled populations Co-insurance varies based on actuarial value (Gold, Silver, Bronze, Catastrophic) Co-pays similar to those in current CHIP program New, nominal co-pays similar to those of public hospitals Premiums set by carriers according to State criteria, sliding scale subsidies set by State or Feds Current CHIP enrollment fees for kids, 2x CHIP fees for adults None * Qualified Health Plan ** All premiums are risk adjusted 26

27 Illustrative New Healthy Texas Program Parameters Tier (FPL) QMCO* Options QMCO** Premiums Provider Payments Tier 3 ( %) Any licensed insurer/hmo who agrees to criteria Set by carriers (with subsidy voucher based on MAGI) Negotiated between carriers and providers Tier 2 ( %) Current CHIP MCOs, with limited new entrants Set by state Based on Medicare, but at carrierprovider discretion Tier 1 (0-100%) Current Medicaid MCOs Set by State Based on Medicaid, but at carrierprovider discretion, plus collected copayments * Qualified Managed Care Organization ** All premiums are risk adjusted 27

28 Illustrative Healthy Texas Timeline Phase Date Federally-facilitated exchange begins operation 2014 New coverage for adults instead of Medicaid expansion Childless adults under 100% of FPL TANF/Parents of Medicaid kids Adults added in Tier 2 (BHP financing) 2017 Tier 3 (conversion from Federally-facilitated exchange) 2017 Streamlined CHIP program integrated into Tier Transition of STAR children to updated benefits/co-payments 2019 Current Medicaid populations not in managed care 2020 (SSI children, other waiver populations) begin transition to Healthy Texas Plus per SB 7 Dual-eligibles, Medicaid/Medicare and managed long-term care populations complete transition

29 Transitioning to a Stable, Uncomplicated Funding System Existing Medicaid enrollees covered under present FMAP formula (60% Federal funding) Expansion Medicaid enrollees covered by 100% Federal funding BHP enrollees covered by 95% of subsidies they would have received in the Exchange Per capita funding from Feds based on population growth and enrollment Blended Federal funding for all state programs (e.g. 75% Federal funding) Federal funds growth capped at population growth + CPI GR funds needed for other state indigent health programs begin to decrease Local taxes still in place Premium taxes from MCOs cover state admin expenses Reduced state funding for fragmented health programs redirected to Healthy Texas Reduce need for IGTs, provider taxes, and other funding mechanisms Counties choose more resources or lower local taxes for indigent care More covered Texans increases premium tax and covers additional state admin expenses 29

30 Proposed Steps to a Texas Solution Adopt guiding principles as a multi-year blueprint for transformation of existing indigent care programs, Medicaid and coverage expansion Create a Texas-based marketplace to cover the population the ACA would put in a Medicaid expansion Transition the existing federally-run individual marketplace (healthcare.gov) to a Texas-based marketplace Give HHSC authority to negotiate with Centers for Medicare and Medicaid Services Extend/modify 1115 Waiver to facilitate transition Continue to improve Medicaid and CHIP programs to reduce fragmentation and administrative burdens Collaborate with Congressional delegation to address other ACA challenges 30

31 Questions & Comments Contact Information: Ken Janda Mary Dale Peterson, MD, MSHCA Tim Schauer