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Health Care ReformThe Road Ahead

August 19, 2010Ardas Khalsa, Medicaid Coordinator

Texas Department of State Health Services

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“The future ain’t what it used to be.”

---Yogi Berra

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Reforms

• Medicaid Expansion• Benchmark Benefits Plan• Essential Benefits• Health Insurance Exchange • Demonstrations/Grants• Health Workforce• Impacts to Texas Healthcare Delivery

Systems

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The Affordable Care Act

• The Patient Protection and Affordable Care Act (PPACA), was enacted on March 23, 2010.

• The Health Care and Education Reconciliation Act of 2010 (HCERA) was enacted on March 30, 2010.

• Together, these two pieces of legislation are called the Affordable Care Act (ACA).

• The Affordable Care Act will make significant changes to the health care reform market.

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Medicaid Expansion

• Mandatory eligibility group for low income• Expands Texas Medicaid (Mandated in

January, 2014) as follows: Children 6 – 19 from 100% to 133% FPL

Aged, blind and disabled persons from the SSI standard (74% FPL) to 133% FPL

Parents of TANF children from 14% to 133% FPL

Non-disabled, childless adults from non-covered to 133% FPL

Expands foster care Medicaid to age 26

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Adult Eligibility Impact400% FPL

25

50

75

100

125

150

175

200

250

225

MBI NF, ICF,HCBS waiver

Subsidy

Aged & Disabled

SSI 74% FPL

Expansion133% FPL

Subsidy

14% FPL

Parents

Expansion 133% FPL

Subsidy

Adults

Expansion 133% FPL

Subsidy

Subsidy

Pregnant185% FPL

250% FPL 220% FPL

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Children’s Eligibility Impact400% FPL

25

50

75

100

125

150

175

200

250

225

NF, ICF, IMDHCBS Waiver

Subsidy

1- 5

Newborns<1

6 – 19

*& former foster kids <26

Current 100% FPL

Expansion 133% FPL*

CHIP

CHIP

185% FPL

220% FPL

Subsidy SubsidySubsidy

CHIP

133% FPL

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Eligibility

• Changes financial eligibility requirements for Medicaid-

— Must use modified adjusted gross income - MAGI

— Prohibits assets test and income disregards (except for some groups, such as people on SSI; elderly and disabled, etc.)

— Includes a 5% income deduction allowance, making the effective ceiling 138% (133% +5%)

• Requires States to maintain at least existing level of Medicaid eligibility (no stricter rules) until January 2014 (adults) and October, 2019 (children)

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Enrolling in Medicaid

By 2014 must include – • Enrollment via website• Enrollment via insurance exchange• Coordinate Medicaid / CHIP with exchange• Outreach to special populations including

people with MHSA disorders, victims of abuse or trauma, homeless youth, individuals with HIV/AIDS, etc.

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Benchmark Coverage

• Foster care expansion and other expansion children receive full Medicaid benefits

• Some other expansion populations may receive “benchmark or benchmark-equivalent” coverage Benchmark could resemble:— Federal employees Blue Cross preferred provider plan,

— Plans offered or available to state employees,

— Health maintenance organization (HMO) plan in the state with the largest non-Medicaid enrollment, OR

— Any other plan approved by the U.S. Secretary of Health and Human Services

• Benchmark packages must include “essential benefits”

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Essential Benefits

• Ambulatory care• Hospitalization• Laboratory services• Emergency services• Maternity and newborn care• Pediatric services, including oral and vision care• Mental health and substance use disorder services• Prescription drugs• Rehabilitative and habilitative services and devices• Chronic disease management• Preventive and wellness services

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Prevention in Medicaid

• State plan option to include clinical preventive services graded A or B by US Preventative Services Task Force. 1% federal match increase if states don’t require co-payment. (January, 2013)

• States must provide tobacco cessation services for pregnant women. States are not allowed to require cost sharing. (October, 2010)

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Federal Medicaid Share

For the “newly eligible” (over age 19, not Medicaid eligible before reform law passed)

Calendar Year Federal Share

2014 -16 100%

2017 95%

2018 94%

2019 93%

2020 + 90%

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CHIP

• Extends federal CHIP funding through 2015

• From October 2015 to September 2019: federal CHIP match rate increased by 23%

• Requires states to maintain existing CHIP eligibility through September 2019

• Requires use of modified gross income beginning January 2014

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Health Insurance Exchange• Must be operational by January 2014.• Failure to establish Exchange will result

in HHS establishing an Exchange within any non-participating state.

• State must demonstrate by January 1, 2013, that it will have Exchange operational by January 1, 2014.

• Must be administered by a governmental agency or non-profit organization.

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Health Insurance Exchange• Provides one stop insurance shopping for

individuals and small businesses.• All plans sold in the Exchange must be

certified by TDI as meeting minimum federal benefit standards.

• Exchange must provide a seamless application and enrollment process for individuals who qualify for subsidies, requiring coordination with HHSC for Medicaid and CHIP inclusion.

• Federal funding: HHS will distribute implementation grants to states within one year after date of enactment of legislation.

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Expansion of Insurance Coverage• Individual Mandate effective January 2014.• Individuals (US citizens and legal residents)

required to obtain qualifying coverage that meets federal standards.

• Can be an individual or group health plan.• Exemptions for individuals meeting any of

the following: earnings fall below tax filing threshold (currently $12,050 for individual and $18,700 for couple), religious objections, members of Indian tribes, or not covered by insurance for less than three months.

• Subsidies for families/individuals up to 400% FPL (approximately $43,000 individual, $88,000 family of 4) to apply towards premium costs.

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Health Workforce

• Demand for primary care providers and specialists will increase as more Texans are insured.

• State will need to examine this increased demand as it relates to the supply of healthcare providers.

• Strategies for meeting increased demand will need to be explored, i.e. telemedicine, additional use of ancillary service providers.

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Texas Uninsured DemographicsCurrent

Current: Insured & Uninsured Current: Uninsured by Act Subsidy Type

Uninsured

6,500,500

26%

Insured

18,873,500

74%

No Subsidy ¤

11%

Undocumented

13%

Subsidy Eligible ◊

43%

Eligible

but Unenrolled †

12%

Medicaid

Expansion ‡

21%

Source: U.S. Census Bureau. March 2009 Current Population Survey (CPS), Texas State Data Center at the University of Texas at San Antonio. Population projections for year 2010 based on

2000-2007 Migration Scenario. Published 2/2009.

Prepared by: The Center for Strategic Decision Support, Texas Health and Human Services Commission, April 2010.

KEY

‡ Medicaid Expansion

(adults <133% Federal Poverty Level (FPL))

† Eligible but Unenrolled

(children < 200% FPL)

◊ Subsidy Eligible

(adults and children <400% FPL,

including Lawful Permanent Residents (LPRs))

¤ No Subsidy

(>400% FPL, including LPRs)

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Texas Uninsured Demographics Post-Implementation

Under Act: Insured & Uninsured Under Act: Uninsured by Act Subsidy Type

Uninsured

2,349,139

9%

Insured

23,024,861

91%No Subsidy ¤

16%

Undocumented

36%

Subsidy Eligible ◊

35%

Eligible but

Unenrolled †

12%

Note: Due to rounding, percents may not total one hundred percent.

Source: U.S. Census Bureau. March 2009 Current Population Survey (CPS), Texas State Data Center at the University of Texas at San Antonio. Population projections for year 2010 based on

2000-2007 Migration Scenario. Published 2/2009.

Prepared by: The Center for Strategic Decision Support, Texas Health and Human Services Commission, April 2010.

KEY

† Eligible but Unenrolled

(children < 200% Federal Poverty Level (FPL))

and (adults <133% FPL)

◊ Subsidy Eligible

(adults and children <400% FPL,

including Lawful Permanent Residents (LPRs))

¤ No Subsidy

(>400% FPL, including LPRs)