Expanding Medicaid: West Virginia's Healthcare Landscape
E
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I.
The Affordable Care Act, the United States
Supreme Court, and Options for West Virginia
II.
The Impact of Expansion: The People & the
Cost
III.
Why Expansion is the Best Choice for West
Virginia Under the Current Landscape
IV.
Addressing Key Concerns Relating to
Expansion
V.
Critical Consumer Questions
VI.
Next Steps: Implementation Timeline
2
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•
The Patient Protection and Affordable Care
Act (“ACA”) was passed in March of 2010 by the
United States Congress.
•
The ACA:
–
Creates premium subsidies for low income individuals
–
Enables consumers with pre-existing conditions to access
private health insurance through guarantee issue
–
Expands coverage of dependents to age 26
–
Requires comprehensive benefit threshold in private market
–
Mandates citizens to have health insurance or face tax penalties
–
Mandates large businesses to provide coverage or face tax
penalties
3
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A
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•
Many States challenged whether
the Federal Government could: (1)
require individuals to obtain insurance
coverage or pay a tax, and (2) force
states to expand Medicaid.
•
Supreme Court upheld the ability of
Congress to require individuals to
obtain coverage or pay a tax.
5
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•
Supreme Court struck down the Federal
Government’s enforcement mechanism to
require Medicaid expansion.
•
West Virginia now has a choice as to whether
to extend Medicaid to individuals between the
ages of 19 and 64 who make from 17% to
138% of the FPL.
•
Supreme Court left the rest of the ACA intact.
6
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July 12, 2012- HHS released letter to
Governors following Supreme Court decision leaving
many questions unanswered.
–
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7
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December 10, 2012- HHS Letter to
Governors and FAQ provides additional, but
limited information.
•
January 14, 2013 - HHS releases proposed
Medicaid Expansion Rule, still leaving many
questions unanswered.
•
May 1, 2013 - HHS has not finalized Medicaid
Expansion Rule and indicates piecemeal release
of other guidance in coming months.
8
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•
Following Supreme Court decision,
West Virginia initiated an analysis of
Medicaid expansion.
•
West Virginia leveraged a competitively bid
actuarial modeling contract (already in place)
to analyze the impact on West Virginia of
many ACA reforms .
9
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Initial report was due January 31, 2013,
but report was delayed due to lack of
information from Federal Government and
longer than expected negotiations with
private insurance companies to obtain data
for the Medicaid expansion modeling.
•
On April 16, 2013, CCRC Actuaries provided
a Medicaid Expansion Report (“Report”) to
the State detailing anticipated costs.
10
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•
In total, the Report indicates that
Medicaid expansion will provide insurance
coverage to approximately 91,500 West
Virginians, significantly reducing the number
of uninsured West Virginians.
•
Combined with other ACA mandates, the
number of uninsured West Virginians will
drop from 246,000 to 76,000 by 2016 if the
State decides to expand Medicaid.
11
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•
The total Medicaid expansion costs for
West Virginia will be approximately $375.5
million from FY 2014 through FY 2023, an
average of $37.55 million per year over the
10 year period.
•
Expansion results in approximately $5.2
billion in federal dollars coming into the state
from FY 2014 through FY 2023, or an
average of $520 million per year over the 10
year period.
12
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:
•
Individuals between 17% of FPL and 100% of
FPL will be stranded – there will be no coverage
under Medicaid and no eligibility for premium
subsidies in federal exchange.
•
Our federal taxes will go to other States who
accept Medicaid expansion. In other words, our
taxpayers will not see any tax relief and will be
subsidizing Medicaid in other States.
17
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:
•
The State and our employers will face greater
costs related to treating uninsured in hospitals,
public clinics, and other care facilities – this
problem occurs because the Federal
Government is reducing other forms of grants
and program for health care due to the program
being implemented under the ACA.
18
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:
•
More employers will be assessed penalties
under the ACA, ranging from $6 million to $18
million per year.
•
Studies show that premiums paid by West
Virginia residents in private market will be 5%
higher if Medicaid is not expanded.
19
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:
•
Our Hospitals, who will lose DSH payments
under Medicaid and Medicare under the ACA,
will see less revenues and face stark choices in
providing key care for our communities without
the revenues associated with Medicaid
expansion.
20
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:
•
The State will be helping working West
Virginians – i.e., those with income levels from
17% to 138% of FPL obtain insurance.
•
Creates financial security for working families
that experience medical hardships.
•
The State will end the disincentive to current
Medicaid enrollees from working – under
expansion impoverished families can work to
the middle class and no longer fear losing
insurance coverage.
21
T
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:
•
Cost of care will be covered by 100%
federal funds for first three years, capturing
majority of pent-up demand, with $1.267
billion federal dollars at a cost of only $15
million in state administrative match dollars.
•
When match rate fully applied in 2020, Feds
will pay $9 for every $10 spent on the
expanded population for cost of care.
22
T
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:
•
The State can reduce funding to several
programs aimed at providing services to
uninsured – moving from 100% state
funding to a 90% federal match.
•
Expansion results in $5.2 billion in federal
funds entering the state economy from FY
2014 through FY 2023.
23
T
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c
a
i
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:
•
Studies show that improved health care
translates into a more productive and effective
workforce, decreased rates of delayed care and
decreased mortality.
•
The State’s health sector will see increased
economic activity due to the large amount of
federal funding coming into the State.
24
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:
•
Individuals with private insurance will see
reductions in the amount of subsidies they
provide associated with the delivery of
uncompensated care.
•
A large number of individuals will qualify for
Medicaid that have substance abuse and
behavioral health needs; thus the State will draw
down significant federal funds to treat these
problems that are now addressed with State
funds.
25
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2
3
•
In first three years, State’s share will be
approximately $5 million per year, an easily
manageable number.
•
By FY 2020, the State share increases to
approximately $65 million. The State must find
secure, long term funding streams for that State
portion of expansion costs.
26
A
d
d
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s
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C
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:
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s
p
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s
i
b
i
l
i
t
y
•
There are several areas to
potentially offset this State
responsibility by shifting monies to
Medicaid from the following areas
whose funding needs will
decrease as a result of the ACA.
27
A
d
d
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:
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i
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s
p
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s
i
b
i
l
i
t
y
•
The State currently spends approximately $12 to $15
million per year in uncompensated care. As more
individuals have insurance coverage, this requirement will
decrease.
•
The State currently spends approximately $20 million for a
State match for Medicaid DSH payments. As Federal
DSH dollars are reduced, the State’s required match will
also decrease.
•
The federal match rate for the CHIP program will increase,
decreasing the need for State match funds.
•
The Report shows that some PEIA families will go to
Medicaid and CHIP; thereby reducing PEIA required
funding.
28
A
d
d
r
e
s
s
i
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C
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c
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w
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:
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(
C
o
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t
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u
e
d
)
•
There are several areas
where revenues should increase or
cost savings may be used for the
State’s expanded population
Medicaid match.
29
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The State’s provider taxes are based on gross
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increase, providing additional dollars for the State’s
expanded population Medicaid match.
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The expanded use of managed care, particularly related to
substance abuse and behavioral health, can aid in reducing
the State’s substance abuse problem and creating other
cost savings, freeing up resources that may be repurposed
for the State’s expanded population Medicaid match.
•
The Public Works DHHR Report identified over $50 million
in annual savings through efficiencies that can be
repurposed for the State’s expanded population Medicaid
match
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If the Federal government changes the rules of the
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ability to manage and pay for expanded population.
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Given the current dynamics at the Federal level, it does not
appear that match rate for first three years will changes – a
100% match rate.
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If the Federal government does not maintain its part of the
bargain, West Virginia must protect itself and may be forced
to discontinue providing healthcare benefits to the expansion
population.
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In addition to fiscal policy, HHS has been
slow in finalizing rules and making
programmatic decisions. These delays add
systemic risk to the ACA.
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West Virginia and other States must have
cooperation and flexibility to respond to HHS as it
makes policy choices. WV demands flexibility from
HHS to control as much as possible the fiscal
impact of expansion on West Virginia.
•
West Virginia must remain vigilant in
monitoring federal developments.
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State will explore Innovation Waivers in 2017,
adding long term flexibility for the State.
•
West Virginia will engage in ongoing negotiations
with HHS and monitor negotiations between states
and federal government to allow West Virginia to
control its own destiny in every reasonable manner.
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The State must be dedicated in addressing
implementation challenges related to the
significant infrastructure and personnel needs
associated with expansion.
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The State must continue to look at ways to
address the current Medicaid program faces
long term funding issues, which is exacerbated
by expansion.
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Medicaid nationally suffers from
inefficiency with risk that expansion exacerbates
problem, the State must use the Public Works
DHHR Report to effectively manage Medicaid.
•
The Public Works Report on DHHR can lead to
increased efficiencies at Medicaid in a number
of key areas.
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For West Virginia’s baseline Medicaid
program, services except for behavioral health,
personal care, pediatric dentistry, and Non-
Emergency Medical Transportation already in
the State’s managed care system, with millions
in savings to the State and Federal Government
each year.
•
To effectively control costs, West Virginia will
move remaining pieces of services into
managed care for CURRENT and EXPANDED
population.
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Providing full benefits through managed care
model for enrollees:
–
Is proven to control cost
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Results in better coordination of services to improve
outcomes
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Drives quality through accreditation and contractual
monitoring
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Insulates state from being overexposed with financial
risk of years with poor claims
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Predictable budget for the State
•
The State will also begin a more rigorous process of
making sure that managed care organizations
provide good outcomes for West Virginia Medicaid
recipients
.
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West Virginia will adopt strategies promoting
personal responsibility .
–
West Virginia will continue to explore premium
assistance and other innovative strategies to reduce
cost and improve quality.
•
West Virginia will continue negotiations with
Federal government to ensure state goals are
reached, state consumer interests protected,
and the state’s fiscal discipline maintained.
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Co-pays will be developed by the State
that will:
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Create sliding cost sharing scale, adjusted by
consumer income
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Alleviate some cost burden from state revenue
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Curb inappropriate utilization, controlling cost
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Encourage personal responsibility
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Create larger degree of parity with private market
39
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Although better situated than most states,
West Virginia must work with its institutions of
higher learning to address any shortages in
health care providers given pent-up demand that
will be released with expansion and exchanges.
•
Eligibility rules and consumer coverage changes
during upcoming months and years will create
an administrative burden and public confusion.
•
State must be prepared to answer consumer
questions and facilitate timely enrollment issues
relating to exchanges and Medicaid expansion.
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Q1: When will Medicaid expansion start?
A1: Consumers will be able to have their eligibility determined
for Medicaid and premium tax credits starting October 1,
2013. Coverage begins January 1, 2014.
Q2: How will consumers know if they are eligible for Medicaid
expansion?
A2: West Virginia consumers will be able to access the
Marketplace, an online portal that provides eligibility
determination for Medicaid, CHIP, and premium tax credits.
Consumers can also call the Federal Exchange call center,
which will have ability to determine eligibility. Finally,
consumers can go to a local DHHR office, access the
support of in-person assisters, navigators, or certified
application counselors at designated locations around West
Virginia for help determining health coverage eligibility.
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Q3: Will businesses be penalized if their
employees obtain Medicaid?
A3: No. Federal employer penalties for failing to
offer minimum essential coverage do not
apply to employees that enroll in Medicaid.
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The State Bureau for Medical Services
will begin preparing a State Plan
Amendment to provide for the following:
–
Expanding the Medicaid population
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Expanding the use of managed care
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Developing co-pays for Medicaid
•
The plan will be submitted by June 2013,
with open enrollment beginning October 1,
2013
43
Add disclaimer page- these numbers represent best effort to project or model behavioral and cost
The Affordable Care Act (ACA) and its impact on Medicaid expansion in West Virginia is examined, focusing on benefits for low-income individuals. The Supreme Court's ruling on the ACA and Medicaid extension options for the state are discussed, emphasizing the need for careful consideration in light of changing healthcare dynamics. Concerns, consumer questions, and implementation steps are highlighted.
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Expanding Medicaid: West Virginias Best Choice in a Dynamic Healthcare Landscape
Table of Contents I. The Affordable Care Act, the United States Supreme Court, and Options for West Virginia II. The Impact of Expansion: The People & the Cost III. Why Expansion is the Best Choice for West Virginia Under the Current Landscape IV. Addressing Key Concerns Expansion V. Critical Consumer Questions VI. Next Steps: Implementation Timeline Relating to 2
Patient Protection and Affordable Care Act The Patient Protection and Affordable Care Act ( ACA ) was passed in March of 2010 by the United States Congress. The ACA: Creates premium subsidies for low income individuals Enables consumers with pre-existing conditions to access private health insurance through guarantee issue Expands coverage of dependents to age 26 Requires comprehensive benefit threshold in private market Mandates citizens to have health insurance or face tax penalties Mandates large businesses to provide coverage or face tax penalties 3
Patient Protection and Affordable Care Act Prior to Supreme Court Decision, the ACA required states to expand Medicaid to 138% of Federal Poverty Levels (FPL) for individuals aged 19 to 64 or lose ALL Federal Medicaid funding, even for current, established programs. 4
US Supreme Court Rules on Validity of ACA Many States challenged whether the Federal Government could: (1) require individuals to obtain insurance coverage or pay a tax, and (2) force states to expand Medicaid. Supreme Court upheld the ability of Congress to require individuals to obtain coverage or pay a tax. 5
US Supreme Court Rules on Validity of ACA Supreme Court struck down the Federal Government s enforcement mechanism to require Medicaid expansion. West Virginia now has a choice as to whether to extend Medicaid to individuals between the ages of 19 and 64 who make from 17% to 138% of the FPL. Supreme Court left the rest of the ACA intact. 6
Slow Response by US HHS to Supreme Court Ruling July 12, 2012- HHS released letter to Governors following Supreme Court decision leaving many questions unanswered. July 19, 2012- Governor Tomblin submitted letter to US Department of Health and Human Services ( HHS ) Secretary Sebelius relaying West Virginia's concerns about expansion. September 28, 2012- Governor Tomblin submitted second letter to HHS requesting answers related to expansion. 7
Slow Response by US HHS to Supreme Court Ruling December 10, 2012- HHS Letter to Governors and FAQ provides additional, but limited information. January 14, 2013 - HHS releases proposed Medicaid Expansion Rule, still leaving many questions unanswered. May 1, 2013 - HHS has not finalized Medicaid Expansion Rule and indicates piecemeal release of other guidance in coming months. 8
Analyzing Whether to Expand Medicaid in West Virginia Following Supreme Court decision, West Virginia initiated an analysis of Medicaid expansion. West Virginia leveraged a competitively bid actuarial modeling contract (already in place) to analyze the impact on West Virginia of many ACA reforms . 9
Analyzing Whether to Expand Medicaid in West Virginia Initial report was due January 31, 2013, but report was delayed due to lack of information from Federal Government and longer than expected negotiations with private insurance companies to obtain data for the Medicaid expansion modeling. On April 16, 2013, CCRC Actuaries provided a Medicaid Expansion Report ( Report ) to the State detailing anticipated costs. 10
A Topline Summary of the Report on Medicaid Expansion In total, the Report indicates that Medicaid expansion will provide insurance coverage to approximately 91,500 West Virginians, significantly reducing the number of uninsured West Virginians. Combined with other ACA mandates, the number of uninsured West Virginians will drop from 246,000 to 76,000 by 2016 if the State decides to expand Medicaid. 11
A Topline Summary of the Report on Medicaid Expansion The total Medicaid expansion costs for West Virginia will be approximately $375.5 million from FY 2014 through FY 2023, an average of $37.55 million per year over the 10 year period. Expansion results in approximately $5.2 billion in federal dollars coming into the state from FY 2014 through FY 2023, or an average of $520 million per year over the 10 year period. 12
Projected Enrollment Following Expansion (Excluding Elderly/Dual Population)
West Virginia Insurance Coverage Changes Market Changes by 2016 Before ACA Insurance Status After ACA Implementation Insurance Status Current 910,000 28,000 183,000 246,000 1,367,000 ESI 907,000 Non-group Public 18,000 26,000 - 63,000 107,000 Uninsured 71,000 76,000 Employer Sponsored Insurance (ESI) Non-group Medicaid & CHIP Uninsured Total 871,000 1,000 1,000 34,000 17,000 182,000 78,000 277,000 4,000 1,000 - -
Report Estimated Medicaid and CHIP Populations with Expansion Medicaid Expansion -- Summary Population Population (non-elderly/non-dual) (Population in Thousands) FY FY FY FY FY FY FY FY FY FY 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Baseline Medicaid Baseline WVCHIP 177.0 172.0 162.0 162.0 162.0 162.0 162.0 162.0 162.0 162.5 23.0 22.0 21.0 21.0 21.0 21.0 21.0 21.0 21.0 21.5 Woodworking Population Change - Medicaid Woodworking Population Change - WVCHIP 0.5 1.0 1.5 2.0 2.0 3.0 2.5 3.0 2.5 3.0 2.5 3.0 2.5 3.0 2.5 3.5 2.5 3.5 2.5 3.5 ACA Mandate Population Change - Medicaid ACA Mandate Population Change - WVCHIP 8.0 -8.0 8.0 -8.0 8.0 -8.0 8.0 -8.0 8.0 -8.0 8.0 -8.0 8.0 -8.0 8.0 -8.0 8.0 -8.0 8.0 -8.0 Expansion Population Change - Medicaid 63.0 78.5 88.5 90.0 91.5 90.5 93.0 94.5 94.5 95.0 Total Population Change - Medicaid Total Population Change - WVCHIP 71.5 -7.0 88.0 -6.0 98.5 100.5 102.0 101.0 103.5 105.0 105.0 105.5 -5.0 -5.0 -5.0 -5.0 -5.0 -4.5 -4.5 -4.5 Total Population - Medicaid Total Population - WVCHIP 248.5 260.0 260.5 262.5 264.0 263.0 265.5 267.0 267.0 268.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.5 16.5 17.0
Report Estimated Costs of Medicaid Expansion Medicaid Expansion (Values in Millions) Affordable Care Act Changes FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Totals Medicaid Total (State & Federal) Baseline 631.0 71.3% 450.0 $ 181.0 $ 620.5 71.0% 440.5 $ 180.0 $ 591.5 70.5% 417.0 $ 174.5 $ 598.0 70.0% 418.0 $ 179.5 $ 604.5 69.5% 420.0 $ 184.5 $ 612.5 69.0% 422.5 $ 190.0 $ 620.5 68.5% 425.0 195.5 627.5 68.0% 426.5 201.0 636.5 67.5% 429.5 207.0 645.0 67.0% 432.0 213.0 6187.5 69.2% 4,281.5 $ 1,906.0 $ FMAP Federal Funds State Funds $ $ $ $ $ $ $ $ Woodworking & ACA Mandate Costs FMAP Federal Funds State Funds 86.2% 28.0 $ $ 87.0% 33.5 $ $ 87.9% 29.0 $ $ 88.2% 22.5 $ $ 88.5% 23.0 $ $ 88.9% 24.0 $ $ 89.3% 25.0 3.0 87.9% 25.5 3.5 88.3% 26.5 3.5 87.9% 29.0 4.0 87.9% 266.0 36.5 $ $ $ $ $ $ $ $ $ $ 4.5 5.0 4.0 3.0 3.0 3.0 Expansion Costs of Care FMAP Federal Funds State Funds 100.0% 100.0% 100.0% 336.0 $ 429.0 $ - $ - $ 97.5% 512.0 $ 13.0 $ 94.5% 519.0 $ 30.0 $ 93.5% 523.0 $ 36.5 $ 91.5% 542.5 50.5 90.0% 556.5 62.0 90.0% 574.0 64.0 90.0% 595.0 66.0 96.0% 5,090.0 $ 322.0 $ 502.0 $ $ $ $ $ $ $ $ $ $ - Expansion Administrative Costs FMAP Federal Funds State Funds 61.9% 6.5 $ $ 66.7% 11.0 $ $ 65.6% 10.5 $ $ 65.6% 10.5 $ $ 65.6% 10.5 $ $ 65.6% 10.5 $ $ 65.6% 10.5 5.5 66.7% 11.0 5.5 66.7% 11.0 5.5 66.7% 11.0 5.5 65.8% 103.0 53.5 $ $ $ $ $ $ $ $ $ $ 4.0 5.5 5.5 5.5 5.5 5.5 Total Spending with Medicaid Expansion FMAP Federal Funds State Funds 81.2% 820.5 $ 189.5 $ 82.8% 914.5 $ 190.5 $ 83.9% 958.5 $ 184.0 $ 82.7% 963.5 $ 201.0 $ 81.4% 973.0 $ 223.0 $ 80.7% 980.0 $ 235.0 $ 79.8% 1,003.0 $ 254.5 $ 78.9% 1,019.5 $ 272.0 $ 78.8% 1,041.0 $ 280.0 $ 78.7% 1,067.0 $ 288.5 $ 80.8% 9,740.5 $ 2,318.0 $
The Costs of Not Expanding Are Great If West Virginia Does Not Expand, then: Individuals between 17% of FPL and 100% of FPL will be stranded there will be no coverage under Medicaid and no eligibility for premium subsidies in federal exchange. Our federal taxes will go to other States who accept Medicaid expansion. In other words, our taxpayers will not see any tax relief and will be subsidizing Medicaid in other States. 17
The Costs of Not Expanding Are Great (Continued) If West Virginia Does Not Expand, then: The State and our employers will face greater costs related to treating uninsured in hospitals, public clinics, and other care facilities this problem occurs because the Federal Government is reducing other forms of grants and program for health care due to the program being implemented under the ACA. 18
The Costs of Not Expanding Are Great (Continued) If West Virginia Does Not Expand, then: More employers will be assessed penalties under the ACA, ranging from $6 million to $18 million per year. Studies show that premiums paid by West Virginia residents in private market will be 5% higher if Medicaid is not expanded. 19
The Costs of Not Expanding Are Great (Continued) If West Virginia Does Not Expand, then: Our Hospitals, who will lose DSH payments under Medicaid and Medicare under the ACA, will see less revenues and face stark choices in providing key care for our communities without the revenues associated with Medicaid expansion. 20
The Benefits of Expansion By Choosing to Expand Medicaid: The State will be helping working West Virginians i.e., those with income levels from 17% to 138% of FPL obtain insurance. Creates financial security for working families that experience medical hardships. The State will end the disincentive to current Medicaid enrollees from working under expansion impoverished families can work to the middle class and no longer fear losing insurance coverage. 21
The Benefits of Expansion (Continued) By Choosing to Expand Medicaid: Cost of care will be covered by 100% federal funds for first three years, capturing majority of pent-up demand, with $1.267 billion federal dollars at a cost of only $15 million in state administrative match dollars. When match rate fully applied in 2020, Feds will pay $9 for every $10 spent on the expanded population for cost of care. 22
The Benefits of Expansion (Continued) By Choosing to Expand Medicaid: The State can reduce funding to several programs aimed at providing services to uninsured moving from 100% state funding to a 90% federal match. Expansion results in $5.2 billion in federal funds entering the state economy from FY 2014 through FY 2023. 23
The Benefits of Expansion (Continued) By Choosing to Expand Medicaid: Studies show that improved health care translates into a more productive and effective workforce, decreased rates of delayed care and decreased mortality. The State s health sector will see increased economic activity due to the large amount of federal funding coming into the State. 24
The Benefits of Expansion (Continued) By Choosing to Expand Medicaid: Individuals with private insurance will see reductions in the amount of subsidies they provide associated with the delivery of uncompensated care. A large number of individuals will qualify for Medicaid that have substance abuse and behavioral health needs; thus the State will draw down significant federal funds to treat these problems that are now addressed with State funds. 25
Addressing Concerns with Expansion: Fiscal Responsibility Concern: Total Medicaid Expansion expected to cost the State a total of $375.5 million from FY 2014 through FY 2023 In first three years, State s share will be approximately $5 million per year, an easily manageable number. By FY 2020, the State share increases to approximately $65 million. The State must find secure, long term funding streams for that State portion of expansion costs. 26
Addressing Concerns with Expansion: Fiscal Responsibility There are several areas to potentially offset this State responsibility by shifting monies to Medicaid from the following areas whose funding needs will decrease as a result of the ACA. 27
Addressing Concerns with Expansion: Fiscal Responsibility The State currently spends approximately $12 to $15 million per year in uncompensated care. As more individuals have insurance coverage, this requirement will decrease. The State currently spends approximately $20 million for a State match for Medicaid DSH payments. As Federal DSH dollars are reduced, the State s required match will also decrease. The federal match rate for the CHIP program will increase, decreasing the need for State match funds. The Report shows that some PEIA families will go to Medicaid and CHIP; thereby reducing PEIA required funding. 28
Addressing Concerns with Expansion: Fiscal Responsibility (Continued) There are several areas where revenues should increase or cost savings may be used for the State s expanded population Medicaid match. 29
Addressing Concerns with Expansion: Fiscal Responsibility (Continued) The State s provider taxes are based on gross receipts. As providers see increased gross receipts, the State s gross revenues from provider taxes should increase, providing additional dollars for the State s expanded population Medicaid match. The expanded use of managed care, particularly related to substance abuse and behavioral health, can aid in reducing the State s substance abuse problem and creating other cost savings, freeing up resources that may be repurposed for the State s expanded population Medicaid match. The Public Works DHHR Report identified over $50 million in annual savings through efficiencies that can be repurposed for the State s expanded population Medicaid match. 30
Addressing Concerns with Expansion: Federal Stability Concern: The State remains concerned about federal spending and revenue policies, leading to questions as to whether Federal match rates will remain in place. If the Federal government changes the rules of the game, the State must be in a position to re-evaluate ability to manage and pay for expanded population. Given the current dynamics at the Federal level, it does not appear that match rate for first three years will changes a 100% match rate. If the Federal government does not maintain its part of the bargain, West Virginia must protect itself and may be forced to discontinue providing healthcare benefits to the expansion population. 31
Addressing Concerns with Expansion: Federal Stability In addition to fiscal policy, HHS has been slow in finalizing rules and making programmatic decisions. These delays add systemic risk to the ACA. West Virginia and other States must have cooperation and flexibility to respond to HHS as it makes policy choices. WV demands flexibility from HHS to control as much as possible the fiscal impact of expansion on West Virginia. West Virginia must remain vigilant in monitoring federal developments. 32
Addressing Concerns with Expansion: Sovereignty Concern: The State of West Virginia should be given maximum flexibility to address Medicaid costs and delivery. State will explore Innovation Waivers in 2017, adding long term flexibility for the State. West Virginia will engage in ongoing negotiations with HHS and monitor negotiations between states and federal government to allow West Virginia to control its own destiny in every reasonable manner. 33
Addressing Concerns of Expansion: The Problems with the Current Medicaid Program Concern: The Current Medicaid Program has identified weaknesses and funding problems. The State must be dedicated in addressing implementation challenges related to the significant infrastructure and personnel needs associated with expansion. The State must continue to look at ways to address the current Medicaid program faces long term funding issues, which is exacerbated by expansion. 34
Addressing Concerns of Expansion: The Problems with the Current Medicaid Program Medicaid nationally suffers from inefficiency with risk that expansion exacerbates problem, the State must use the Public Works DHHR Report to effectively manage Medicaid. The Public Works Report on DHHR can lead to increased efficiencies at Medicaid in a number of key areas. 35
Addressing the Concerns of Expansion: Controlling Costs Through Managed Care For West Virginia s baseline Medicaid program, services except for behavioral health, personal care, pediatric dentistry, and Non- Emergency Medical Transportation already in the State s managed care system, with millions in savings to the State and Federal Government each year. To effectively control costs, West Virginia will move remaining pieces of services into managed care for CURRENT and EXPANDED population. 36
Addressing the Concerns of Expansion: Controlling Costs Through Managed Care Providing full benefits through managed care model for enrollees: Is proven to control cost Results in better coordination of services to improve outcomes Drives quality through accreditation and contractual monitoring Insulates state from being overexposed with financial risk of years with poor claims Predictable budget for the State The State will also begin a more rigorous process of making sure that managed care organizations provide good outcomes for West Virginia Medicaid recipients. 37
Addressing Concerns with Medicaid Expansion: Personal Responsibility West Virginia will adopt strategies promoting personal responsibility . West Virginia will continue to explore premium assistance and other innovative strategies to reduce cost and improve quality. West Virginia will continue negotiations with Federal government to ensure state goals are reached, state consumer interests protected, and the state s fiscal discipline maintained. 38
Addressing Concerns with Medicaid Expansion: Personal Responsibility Co-pays will be developed by the State that will: Create sliding cost sharing scale, adjusted by consumer income Alleviate some cost burden from state revenue Curb inappropriate utilization, controlling cost Encourage personal responsibility Create larger degree of parity with private market 39
Monitoring Concerns with Medicaid Expansion: Market Instability Although better situated than most states, West Virginia must work with its institutions of higher learning to address any shortages in health care providers given pent-up demand that will be released with expansion and exchanges. Eligibility rules and consumer coverage changes during upcoming months and years will create an administrative burden and public confusion. State must be prepared to answer consumer questions and facilitate timely enrollment issues relating to exchanges and Medicaid expansion. 40
Consumer Question and Answer Q1: When will Medicaid expansion start? A1: Consumers will be able to have their eligibility determined for Medicaid and premium tax credits starting October 1, 2013. Coverage begins January 1, 2014. Q2: How will consumers know if they are eligible for Medicaid expansion? A2: West Virginia consumers will be able to access the Marketplace, an online portal that provides eligibility determination for Medicaid, CHIP, and premium tax credits. Consumers can also call the Federal Exchange call center, which will have ability to determine eligibility. Finally, consumers can go to a local DHHR office, access the support of in-person assisters, navigators, or certified application counselors at designated locations around West Virginia for help determining health coverage eligibility. 41
Consumer Question and Answer Q3: Will businesses be penalized if their employees obtain Medicaid? A3: No. Federal employer penalties for failing to offer minimum essential coverage do not apply to employees that enroll in Medicaid. 42
Medicaid Expansion Timeline The State Bureau for Medical Services will begin preparing a State Plan Amendment to provide for the following: Expanding the Medicaid population Expanding the use of managed care Developing co-pays for Medicaid The plan will be submitted by June 2013, with open enrollment beginning October 1, 2013 43
