•Where are we now and what are we watching?•Affordable Care Act•Medicaid•Long-Term and Managed Care•CHIPS

• What does it mean?

March 23, 2010

Affordable Care Act Status

More Americans have Health Insurance• 15M Americans now covered• Percentage of uninsured adults in US down from 18% to

13.4%• Estimate +9.9M enrollees added during 2nd enrollment

period ending Feb 15 • 9.5M enrollees in second open enrollment as of Jan 17

Affordable Care Act Status

Enrollment Occurred Online, by States and at Work•6.4M: HealthCare.gov federal marketplace•850,000: 14 states with own marketplace•1.9M: auto-renewal, renewal and new signups

Federal Marketplace Snapshot Week 6Dec 20 – Dec 26

Cumulative Nov 15 – Dec 26

Plan Selections 99,446 6,490,492

Applications Submitted 197,402 8,189,587

Call Center Volume 452,276 6,731,353

Average Call Center Wait Time 2 seconds 8 minutes 49 seconds

Calls with Spanish SpeakingRepresentative

28,131* 525,505

Average Wait for Spanish Speaking Rep 2 seconds 30 seconds

HealthCare.gov Users 1,381,879 15,032,614

CuidadoDeSalud.gov Users 43,835 527,217

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** FFM

SBM

FFM Partnership Model

Affordable Care Act: What We’re Watching

• Judiciary • Supreme Court decision on legality of federal subsidies

• State Specific Exchanges

• King v. Burwell – March 2015

• Legislative• Republican-controlled Congress repeal or limit provisions such as:

• Various taxes on health care industry

• Cadillac tax on high-cost health plans

Affordable Care Act: What We’re Watching

July 30, 1965

Medicaid (avg. monthly projected estimates - millions)

FY 2013 FY 2014 FY 2015

Total 58.1 63.0 66.7

Aged 5.2 5.4 5.5

Blind/Disabled 9.7 9.8 9.8

Children 28.3 28.8 29.3

Adults 14.8 14.8 15.1

Expansion Children 0.0 0.5 0.7

Expansion Adult 0.0 3.7 6.4

CHIP (avg monthly) 5.8 6.0 6.2

Medicaid: What We’re Watching

• Medical Doctor’s Pay

• 47% pay cut in 23 states after ACA reimbursement expires

• 15 states subsidize; 12 states undecided; many states refuse to extend

• Doctors cite low payment as reason to not participate in Medicaid; need more research

• Medical Expansion Waivers

• 28 states expanded Medicaid; election results limit additional expansion

• Movement from states: privatization, patient pay more and employer insurance coverage

Medicaid: State Expansion Status

Managed Care Regulations

• By 2016, 3 of 4 Medicaid patients enrolled in managed care plans

• Regulation• Private health insurers

• Centers for Medicare & Medicaid Services to strengthen oversight of states and set more uniform access standards this year

• Rate setting rules - how rates determined by states

Medicaid: What We’re WatchingHigh-Cost Specialty Drugs• States follow FDA Drug Approvals

• 2013: Hepatitis C drug Sovaldi: cures disease; costs $84K for treatment

• 2015: CA budget includes $300M for drug payments, mostly Hepatitis C drug for Medi-Cal and California’s infected prisoners

• Medicaid directors advocate for federal intervention• Price controls• Better federal matching rates for “curative” specialty drugs• Greater waiver flexibility to allow states to push for better deals

with drug manufacturers

Super-utilizers: 5% of Medicaid’s beneficiaries account for 60% of the overall spending on the program

By 2020, an estimated 55 million people in the United States will be over the age of 65 = 16.1% of the population

Medicaid: What We’re WatchingDemographics: Super-utilizers and Aging Population

Managed Care & Long-Term Care: What We’re Watching

• Medicaid • 75% of all Medicaid enrollees will be in some form of managed care, including older,

sicker, and more challenged populations than were included in traditional Medicaid

• Significant market opportunities for Medicaid plans

• New challenges in contract management and oversight for state governments

• Long-Term Care • States must file plans with CMS about how they’re creating home-like atmospheres

through community-based and not institutionalized care – giving seniors real options

• Growing use of managed care

CHIP Reauthorization Status • CHIP funding expires September 2015

• CHIP jointly funded by state and federal governments

• Unlike Medicaid, insures children from families with higher income levels

• 70% of funding comes is federal

• Financial and Coverage Impact varies by State based on:• State program design

• Federal matching rate

• Number of children supported with CHIP funds

• If not reauthorized, states will been to fill budget holes and find ways to maintain coverage for about 4 million children for billions of dollars

What Does It All Mean for Companies Doing Business with States and Advocacy Groups Trying to Influence Policy?

Top 10 States’ HHS Spend

1. California-$85.5 billion

2. New York-$49.1 billion

3. Pennsylvania-$31.7 billion

4. Texas-$24.5 billion

5. Florida-$23.2 billion

6. Ohio-$22.5 billion

7. Illinois-$19.7 billion

8. North Carolina-$19.1 billion

9. Michigan-$17.4 billion

10. New Jersey- $15.8 billion

At a total of $308.5 billion, the top 10 states represent about 50 percent of all spending in this vertical

Transformative Change to Watch• Payment Reform: Demonstrations aimed at ending wasteful fee-for-

service system• Oregon: unique ACO model

• Tennessee and Arkansas: bundled payments.

• Bold cost-containment strategies• Maryland and Massachusetts: Cap spending

• Comprehensive health delivery system waivers (DSRIP)• New York (most recently), Texas and California

Summary• Affordable Care Act Enrolls Millions while New Congress

Deliberates Amendments

• Medicaid Expansion and Subsidies Debated State by State

• Drug Costs Dictate Hard Choices

• Changing Demographics Affect Medicaid and Managed Care

• CHIP Reauthorization Critical Path through Congress

• States Innovate based on Champions in Government and Philosophy of Leaders