December 2023 Medicaid Forecast update

Indiana Family and Social Services Administration released the December 2023 update for Medicaid forecasts, projecting expenditures and funding through SFY 2025. The report includes detailed information on program areas, growth rates, federal funds, and assistance funding needs, highlighting key changes compared to earlier forecasts. The analysis provides insights into Medicaid financial planning and the evolving landscape of healthcare assistance in Indiana.

• Medicaid
• Forecast Update
• Indiana
• SFY 2025
• Healthcare

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1. December 2023 Medicaid Forecast update State of Indiana Family and Social Services Administration Projections through SFY 2025 Updated data through September 2023 DECEMBER 19, 2023

2. December 2023 Medicaid Assistance Forecast Update EXPENDITURES, in $millions Growth Growth Growth Growth FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Healthy Indiana Plan Hoosier Care Connect Hoosier Healthwise Pathways (MLTSS) Fee for Service Long Term Care Institutional Care Long Term Care Community Care Medicare Buy-In, Clawback Rebates and Collections Remove CHIP and MFP Other Expenditures (DSH, UPL, etc.) Medicaid Expenditures (State and Federal) FUNDING, in $millions $6,048.9 1,613.3 1,832.4 (0.1%) (2.0%) 16.8% $6,041.0 1,580.2 2,140.8 3.2% (5.6%) 1.9% $6,234.5 1,491.5 2,182.4 (9.9%) 17.1% 24.1% $5,615.3 1,746.5 2,707.5 (3.8%) (18.5%) (9.7%) $5,403.2 1,422.7 2,443.9 5,113.6 2,316.2 682.3 2,402.4 882.9 (1,374.5) (349.0) 1,661.2 $20,604.9 1,957.2 1,847.8 1,506.2 567.3 (1,242.4) (248.4) 1,523.8 $15,406.1 1.3% 11.9% 15.9% 13.7% 10.3% (0.2%) 15.6% 6.1% 1,981.9 2,067.1 1,746.1 645.1 (1,369.8) (248.0) 1,761.5 $16,345.9 11.0% 16.8% 22.9% 20.0% 1.9% 29.3% 23.4% 9.5% 2,200.1 2,413.7 2,146.6 774.3 (1,396.1) (320.6) 2,173.5 $17,899.8 15.7% 5.8% 65.8% 4.8% 3.8% 8.4% (24.7%) 8.3% 2,546.3 2,553.3 3,559.5 811.4 (1,448.9) (347.5) 1,635.6 $19,379.1 (9.0%) (73.3%) (32.5%) 8.8% (5.1%) 0.4% 1.6% 6.3% Growth Growth Growth Growth FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Federal Funds IGTs Provider Tax Receipts HAF Funding HIP Funding QAF Transfer to SBA Non-Medicaid Assistance Funds $11,644.8 453.3 191.2 479.2 522.5 (49.2) $13,241.9 7.9% $12,561.2 401.5 204.5 497.8 524.7 (46.7) $14,143.0 6.8% 5.3% $13,416.5 422.6 181.7 676.6 566.1 (41.8) $15,221.7 0.5% (5.8%) 19.2% 25.7% (11.4%) 5.9% 1.2% $13,480.0 398.3 216.5 850.5 501.3 (44.2) $15,402.3 3.9% 5.1% 11.5% (4.5%) 4.3% 2.5% 3.6% $14,000.6 418.8 241.4 812.2 522.7 (45.3) $15,950.4 (11.4%) 6.9% 3.9% 0.4% (4.9%) 6.8% (11.2%) 35.9% 7.9% (10.6%) 7.6% 1.8% (1.3%) 21.6% 13.4% 48.5% 26.9% 17.0% 12.8% Forecasted Medicaid GF Assistance Need General Fund Medicaid Assistance Appropriation Dedicated funding/ Carry forward Sub-total (Shortfall)/Surplus Reversion amount Balance After Reversion $2,164.2 $2,618.6 $15.0 $469.4 $469.4 $0.0 $2,203.0 $2,584.6 $2,678.1 $2,931.9 $3,976.7 $3,721.5 $4,654.5 $4,196.6 $381.6 $188.3 $193.3 * $253.8 $525.0 ($271.2) ($255.2) ($457.9) * Additional amount of SFY 2022 surplus is related to HCBS Enhanced FMAP in the amount of $193,304,992 2

3. Comparison to the April 2023 Medicaid Forecast SFY 2023 (actual) $17,151.7 SFY 2024 (estimated) $19,078.0 SFY 2025 (estimated) $19,937.6 Total Expenditures, in $millions April 2023 forecast expenditures * Capitation rate and acuity updates Enrollment changes (managed care) LTSS Institutional (including MC) LTSS Home and Community (incl MC) FFS, mainly hospital and ABA Pharmacy rebates DSH/UPL Medicare state buy-in and clawback CHIP Other Total changes Current Forecast *Value reflects total expenditures from the April forecast, with appropriated strategic investments added ($845.1 million in SFY 2024 and $1,229.5 million in SFY 2025) 126.0 (29.1) 105.6 58.1 52.4 6.3 422.0 56.9 (59.1) 9.0 748.1 (541.9) (46.2) 100.4 584.0 81.6 98.7 (62.7) 37.2 20.7 29.3 301.1 $19,379.1 44.1 (350.0) (7.0) 883.5 64.7 56.2 (54.1) 38.1 (37.9) 29.7 667.3 $20,604.9 $17,899.8 3

4. Comparison to the April 2023 Medicaid Forecast SFY 2023 (actual) $2,362.8 SFY 2024 (estimated) SFY 2025 (estimated) $4,196.6 Appropriation Need, in $millions April 2023 forecast appropriation need * Capitation rate and acuity updates Enrollment changes (managed care) LTSS Institutional (including MC) LTSS Home and Community (incl MC) FFS, mainly hospital and ABA Pharmacy rebates Medicare buy-in and clawback HAF collections FFY 2025 final FMAP Other Total changes Current Forecast *Value reflects total expenditures from the April forecast, with appropriated strategic investments added ($293.2 million in SFY 2024 and $428.2 million in SFY 2025) $3,721.5 (17.9) (9.8) 29.9 177.4 25.1 28.3 37.2 7.7 (3.6) 26.5 16.4 14.3 1.5 56.9 229.4 59.5 (45.0) (1.5) 314.2 19.0 14.0 38.1 26.0 33.6 457.9 (33.8) 315.3 $2,678.1 (15.0) 255.2 3,976.7 $4,654.5 4

5. Enrollment projection Compared to the April 2023 forecast update Projection notes Return to normal operations: April 2023 Medicaid Enrollment Projection 2,500,000 2.3 million Renewal processing occurring over 12 months from mid- May 2023 to mid-May 2024 2,000,000 By May 2024, the forecast projects a net reduction of approximately 400,000 members. This reflects continuous eligibility for all children and extended post- partum eligibility 1,500,000 1,000,000 500,000 - Nov-20 Nov-21 Nov-22 Nov-23 Nov-24 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24 Jan-25 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Sep-20 Sep-21 Sep-22 Sep-23 Sep-24 May-20 May-21 May-22 May-23 May-24 May-25 Approximately 100,000 additional aid group shifts April 2023 Forecast Dec 2023 Forecast Medicaid grew by approximately 771,000, from 1.49 million as of January 2020 to 2.26 million as of April 2023. 5

6. Enrollment by Population Medicaid/CHIP Jan 2020 Pre-PHE Apr 2023 Net Growth 2020 - 2024 Population May 2024 Growth Growth Healthy Indiana Plan (HIP) Pregnant Women 17,388 15,777 41,976 (26,199) 59,364 33,165 All Other HIP 390,670 182,825 368,570 (185,745) 759,240 573,495 100,907 Hoosier Care Connect (HCC) 90,402 5,246 10,505 (5,259) 95,648 Hoosier Healthwise (HHW) Children/CHIP 598,118 100,260 283,168 (182,908) 881,286 698,378 Pregnant Women 3,528 5,545 18,642 (13,098) 22,170 9,073 105,657 LTSS 90,798 23,271 14,859 8,412 114,069 329,900 Other Fee-for-service (FFS) 296,839 37,089 33,061 4,028 333,928 2,258,524 Total 1,487,743 370,013 770,781 (400,769) 1,857,756 6

7. December 2023 Medicaid Assistance Forecast Average monthly enrollment projections HIP, HCC, and HHW Growth Growth Growth Growth Average Monthly Enrollment FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Healthy Indiana Plan HIP State Plan Benefits Package HIP Expansion HIP Medically Frail HIP Pregnant Females HIP Bridge HIP Hospital Presumptive Eligibility Total Healthy Indiana Plan 125,154 280,262 148,170 38,376 16.5% 8.3% 33.8% 55.8% 145,827 303,657 198,234 59,790 21.8% 3.4% 20.2% (0.2%) 177,559 314,058 238,334 59,685 (19.9%) (0.7%) (20.7%) (23.8%) 142,155 311,920 189,012 45,456 (16.1%) (7.4%) (20.9%) (27.3%) 119,214 288,892 149,559 33,061 3,507 7,204 601,438 5,252 597,214 (40.5%) 19.0% 3,125 710,633 (18.4%) 11.5% 2,549 792,184 108.3% (12.4%) 5,310 693,853 35.7% (13.3%) Hoosier Care Connect Adult Child Foster Total Hoosier Care Connect 60,940 22,491 12,886 96,317 2.3% 6.3% 15.5% 5.0% 62,337 23,902 14,881 101,120 (0.4%) (1.4%) 6.0% 0.3% 62,088 23,573 15,772 101,433 (5.9%) (6.5%) 4.5% (4.4%) 58,428 22,039 16,474 96,940 (30.0%) (1.3%) 2.2% (18.0%) 40,871 21,746 16,843 79,460 Hoosier Healthwise Adults Children Pregnant Females CHIP Total Hoosier Healthwise 43 445.7% 15.4% 93.6% (5.5%) 13.3% 690,245 16,423 100,492 807,396 236 269.6% 5.4% 28.1% 27.8% 8.7% 871 40.8% (12.8%) (24.9%) (2.3%) (11.5%) 1,226 634,172 15,802 125,518 776,718 (19.1%) (7.9%) (42.8%) (5.1%) (8.2%) 992 597,916 8,481 106,331 712,771 727,374 21,033 128,454 877,733 584,091 9,044 119,112 713,239 7

8. December 2023 Medicaid Assistance Forecast Average monthly enrollment projections PathWays and fee for service Growth Growth Growth Growth Average Monthly Enrollment FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 PathWays Nursing Home HCBS Acute Total MLTSS 25,932 35,343 72,459 133,734 Fee For Service Institutionalized Waiver\State Plan HCBS No Level of Care Hoosier Healthwise FFS Dual Non-Dual Medicare Savings Program Limited Benefit Populations Total Fee For Service 30,860 61,520 0.0% 7.1% 30,868 65,865 3.1% 8.4% 31,826 71,426 1.8% 10.0% 32,390 78,576 (76.9%) (35.3%) 7,494 50,859 32,991 93,653 38,401 67,268 66,442 391,135 (14.3%) 6.5% (7.6%) (3.6%) 10.5% 1.9% 28,282 99,705 35,497 64,831 73,403 398,450 3.3% 5.5% (5.5%) (0.9%) 26.7% 7.5% 29,220 105,148 33,554 64,249 93,035 428,457 41.7% (7.9%) 1.8% 5.5% 0.2% 3.7% 41,403 96,872 34,146 67,806 93,230 444,423 11.0% (60.8%) 2.4% 6.1% (1.1%) (23.2%) 45,937 37,951 34,971 71,953 92,207 341,372 OVERALL TOTAL 1,797,436 12.2% 2,017,599 9.0% 2,199,807 (8.5%) 2,011,934 (7.1%) 1,869,244 Growth of approximately 771,000 from January 2020 to 2.26 million as of April 2023 Projected net enrollment reduction of approximately 400,000 after all members complete redetermination 8

9. CHIP Funding Projections Increasing cost for SFY 2024 and SFY 2025 due to phase out of the enhanced FMAP Lower appropriation need during SFY 2021 SFY 2023 due to enhanced FMAP and lower CHIP enrollment during the PHE FMAPs for SFY 2021 through SFY 2023 were provided by FSSA, and are based on actual expenditures FMAPs for FFY 2024 and FFY 2025 are final, as provided by FFIS State of Indiana Family and Social Services Administration Analysis of CHIP State Funding, in $millions SFY 2021 $ 245.5 84.56% SFY 2022 $ 240.7 80.82% SFY 2023 $ 305.2 80.12% SFY 2024 $ 317.0 76.64% SFY 2025 $ 314.9 75.56% Projected CHIP expenditures Applicable FMAP State share Projected HAF Funding (Cap) Projected appropriation need Appropriation - CHIP Assistance Surplus / (Shortfall) 37.9 6.3 $ 31.6 44.4 $ 12.8 46.2 6.6 $ 39.6 46.2 $ 6.6 60.7 7.9 $ 52.8 51.1 ($ 1.7) 74.0 14.7 $ 59.4 67.6 $ 8.2 77.0 12.2 $ 64.8 64.6 ($ 0.2) 9

10. Mitigation and Remediation Strategies

11. Mitigation and Remediation Strategies for Medicaid Budgeting and Future Forecast Activity Proposal of cost containment strategies for the current biennium Implementation of forecast process improvements Detailed review of all underlying actuarial assumptions by financial and program staff Inclusion of more real time data in forecasting Identification of emerging risks Robust prospective policy change review and approval process including detailed financial impact analysis across Medicaid programs in all divisions Increased monitoring of enrollment and utilization trends and comparison of forecasted projections to experience Development and publication of regular reports with key Medicaid data and trends 11