Presented by: Names here Date Medicaid Expansion: What’s at Stake for Texas

The Medicaid Expansion Option  Part of the Patient Protection and Affordable Care Act; increase Medicaid eligibility to 133% of the federal poverty level ($31,720 for a family of four)  U.S. Supreme Court ruled federal government cannot require states to increase Medicaid eligibility  Medicaid expansion is optional for states  26 states (including DC) moving forward with Medicaid expansion in

Texas’ Response to Expansion Option NO 3

Debate on Expansion in 2013 Legislature  Gov. Perry: Medicaid is a “broken” and “financially unsustainable” system  Rep. John Zerwas (R-Fulshear) proposed a “Texas solution” to Medicaid expansion by using federal funds to expand private market coverage  Leach amendment, added to Senate Bill 7 by Rep. Jeff Leach (R-Plano) blocked Texas from expanding Medicaid without approval from Texas legislature  Numerous other bills filed to require the state to expand Medicaid but none received a committee hearing 4

Uninsured in Texas  6.2 million uninsured, according to U.S. Census Bureau  Highest rate of uninsured in the nation  In many Texas counties, 1 in 3 residents are uninsured. 5

Impact of PPACA on Uninsured  Of the 6.2 million uninsured: –28% (1,736,000) are eligible for tax subsidies to purchase private coverage through the federally facilitated marketplace –14% (868,000) are eligible for Medicaid under current eligibility rules –20% (1,240,000) ineligible for any coverage due to immigration status –21% (1,302,000) have access to ESI or unsubsidized marketplace coverage 6

If Texas Took the Medicaid Option…  17% of the uninsured (1,054,000 Texans) would have Medicaid coverage  In the absence of Medicaid expansion, 1,054,000 Texans will remain uninsured 7

Paying for Expanded Coverage  PPACA’s coverage provisions paid for with $500 billion in cuts to hospitals, home health providers, nursing homes and Medicare Advantage plans over 10 years.  $18.6 billion: Texas’ hospitals share of these cuts.  These cuts take place in all states – even those not expanding Medicaid 8

Fed. Gov’t Pays for Larger Share of the Cost of Services for Expansion Population  Federal government pays 100% of the costs of Medicaid services for the expansion population from  State share: 0% for 3 years  Federal government’s share gradually decreases to 90% in 2023  State share: 10% beginning in

Texas’ Choice: Cost to Texas Taxpayers  Beginning Jan. 2014, state loses nearly $300 million in federal funds per month  For the biennium, we lose $7.7 billion  By 2022, this increases to $9.2 billion in foregone federal revenue  More than any other state 10

Texas’ Choice: Cost to Businesses  $266-$399 million in annual federal tax penalties  Employers >50 employees assessed a per employee penalty of $3,000 if employees rely on tax subsidies to purchase insurance coverage but not if they qualify for expanded Medicaid coverage. 11

Texas’ Choice: Cost to Privately Insured  In the absence of Medicaid expansion, cost shifting to private sector will remain  Premium costs for private insurance average $1,800 higher because of uncompensated care for the uninsured  Premiums for private coverage available through the marketplace estimated to be 9.3 percent higher due to inaction on Medicaid expansion 12

Texas’ Choice: Cost to Hospitals  More than 1 million low-income, uninsured residents will continue to seek care in hospital ERs, clinics  At the same time, Medicare and Medicaid revenue is being cut  Hospitals asked to provide same level of care with fewer resources 13

Hospital Funding Cuts: Medicare DSH  Medicare Disproportionate Share Hospital cuts: for FY 2014 alone are between $16 million and $19 million 14

Hospital Funding Cuts: Sequestration  Across-the-board 2 percent reduction in Medicare payments extended through 2023  $2.5 billion over 10 years 15

Hospital Funding Cuts: Medicaid  Federal cuts to Medicaid Disproportionate Share Hospital program extended for an additional year through 2023  FFY 2016: Texas hospitals will face reduction of $1.2 billion 16

Hospital Funding Cuts: SGR Fix  Temporary SGR or “doc fix” averts deep cuts to Medicare physician reimbursement  But at a cost to hospitals  Lower payments for long-term care hospitals that serve patients with clinically complex conditions  Extension of Medicare sequester  Hospital funding being looked at as a “pay for” for a permanent SGR fix 17

The Bottom Line  Without Medicaid expansion, more than one million uninsured Texans will continue to rely on hospitals for range of services from primary care to critical care  Hospitals’ uncompensated care burden of $5.5 billion annually unlikely to be reduced significantly  Negative impacts of inaction on Medicaid coverage compounded by ongoing Medicare/Medicaid federal funding cuts 18

THA – Who We Are  The Texas Hospital Association is a nonprofit trade association representing Texas hospitals and health systems. In addition to providing a unified voice for health care, THA serves its 500+ members with timely information, data analysis, education on essential operational requirements, networking and leadership opportunities. 19

THA – What We Do  Since its founding in 1930, THA has grown and evolved with the hospital industry itself. Today, THA is the leading advocacy organization for Texas hospitals. The Association’s dedicated, professional staff is committed to helping hospitals navigate the complex, ever- changing legislative and regulatory environment, while working toward common solutions for better health care policy at the state and federal levels.  THA also serves as a resource for the State of Texas in the areas of disaster planning and response, data services and regulatory development. 20

THA’s Family of Companies  The THA Family of Companies provides a full range of services for hospitals and health systems: –HealthShare markets products and services offered through THA-endorsed vendors. HealthShare also manages and markets voluntary insurance programs, THA’s PDS program and the THA Retirement Plan. –Texas Hospital Insurance Exchange, managed by the Texas Hospital Insurance NetworK, a wholly owned subsidiary of THA, provides dependable, competitively priced liability insurance and workers’ compensation coverage designed specifically for the Texas health care market. –Texas Healthcare Trustees is affiliated with THA and provides an education, advocacy and leadership role for the governing board members of Texas health care organizations. –Texas Center for Quality & Patient Safety is an initiative of THA and the Texas Hospital Association Foundation focused on improving the quality of care at the bedside, and reducing costs, through evidence-based practices. –HOSPAC, composed of THA’s state and federal political action committees, is the voice for more than 355,000 health care professionals working in Texas hospitals. 21

Serving Texas Hospitals/Health Systems 22