Update from Washington For The Arc of Michigan Presented By: Nicole Jorwic, J.D. Director of Rights Policy, The Arc of the United States

MEDICAID AND THE AHCA

Medicaid High poverty rates The largest insurer in the country today 73 million individuals are covered Up from 4 million individuals when began in 1965 with a total cost of $900 million, a result of High poverty rates Erosion in employer based group plans for lower wage workers Aging population Longer life spans for persons with disabilities People with disabilities and senior citizens account for about 48% of the total Medicaid budget and about 21% of the beneficiaries; Projected to serve 77.5 million individuals in 2024 at a total cost of $920.5 billion, with federal share of 61%

Medicaid Provisions in the ACA Disability-Specific Provisions Money Follows the Person (MFP) Expired; Congress must act to extend it. Community First Choice Option Authorized in the ACA; Provides 6% extra federal matching; creates entitlement to “personal care”; in CA.,CO.,MD.,MT.,N.Y.,OR.,TX., & WA.; Congress must save it Expanded HCBS State Plan Amendment (not waivers) now In many states for a variety of disability and mental health populations Health Homes for state identified populations in many state

Medicaid Medicaid Restructuring Restructuring of Medicaid as a state matching funds “entitlement” to the states based on formula favoring poorer state since its beginning in 1965 as part of the “Great Society” Elimination of many federal mandates and rules through one of two strategies: Block grants Per capita caps*

What does this mean for Individuals with Disabilities? Reminder: Savings = CUTS Primary goal is to reduce the federal deficit and reduce the ten year projected growth of federal Medicaid funding. Estimated “savings” over ten years may be as much as $1 trillion according to the Congressional Budget Office- $834 billion from Medicaid outlay

Why ACA matters Biggest legislative advance for people with disabilities since the ADA Insurers may not discriminate against people with pre-existing conditions No annual or lifetime caps Essential health benefits include “rehabilitative services and devices” mental health and behavior health services preventive and wellness services Premium subsidies to make insurance affordable Children to age 26

Why ACA matters (continued) Expanded eligibility for Medicaid Four incentives to expand home and community based long term supports and services: Community First Choice option State Plan Home and Community Based Services option Extends Money Follows the Person Rebalancing Demonstration Creates Balancing Incentives Program

American Health Care Act-Health Provisions In 2020 replaces premium tax credits with more limited tax credits. Tax credits vary by age and start at $2,000 per year for individuals up to age 29 and the maximum is $4,000 per individuals age 60 or older. Repeals cost-sharing subsidies that helped people with incomes below 250% of poverty ($29,780 for an individual, $60,750 for a family of four). Replaces tax penalty for not purchasing insurance with penalty on premiums for people who let their coverage lapse. Repeals the tax penalty on employers who do not provide health insurance and repeals the tax credits for low wage small employers.

American Health Care Act-Health Provisions Repeals the tiering of the health plans and the requirement that each tier meet an actuarial value (AV). This was one way people could gauge the generosity of the plan’s coverage, what percentage the individual would be expected to pay and added some consistency across health plans. These provisions, combined with the essential health benefit requirement, helped ensure that people who had health care needs would be able to find plans that met their needs. States may apply for waivers for the requirements to provide essential health benefits, if states make that change it would also mean that the prohibition on lifetime and annual caps would be lifted. States have the option to waive the prohibition on using health status to determine premium cost for people who have had a gap in continuing coverage. States would be required to have a high risk pool or another similar program in place in order to do so. Allows for an increase in age rating meaning that older individuals will pay more starting 2018 unless states adopt other rules. Repeals funding for Prevention and Public Health Fund.

Per capita caps Cuts would grow each year. As health care costs rise, or if there is a public health crisis, states must absorb costs. States will likely impose Medicaid cuts in eligibility, benefits, and provider payments. Medicaid is states’ biggest source of federal funding, so cuts under per capita caps will squeeze state budgets overall. Hits seniors and people with disabilities the hardest, because the majority of Medicaid spending covers their health care & home care.

Medicaid Expansion Cuts impact people with I/DD Exact numbers not available by type of disability, but we know: People in the Medicare waiting period (about 1.5 million in any given year) People who do not qualify for SSI either due to disability or income Low wage workers and people without access to employer sponsored health insurance Dependents under age 26 without access to insurance Parents and caretakers

Medicaid Expansion Codifies the Supreme Court decision that made the Medicaid expansion a state option and repeals the state option to extend coverage to adults above 133% of federal poverty ($16,400 for an individual, $47,550 for a family of 4). Repeals the requirement that Medicaid alternative benefit programs cover essential health benefits including rehabilitative and habilitative services and devices, mental health services, prescription drugs and other basic health care services required by the ACA. Incentivizes states to take the option to create work requirements for adults (exempts seniors, children, people with disabilities and parents of kids under age 6 or parents with a child with a disability). Require eligibility redeterminations every 6 months for expansion enrollees.

Impact of Per Capita Caps $834 billion Medicaid Cut

Escalation of the Funding Gap 4.4% Reality PCC/Block Grant 3.7%

Per Capita Caps Beginning in FY 2020 the bill converts Medicaid financing to a per capita cap and sunsets enhanced match for states that expanded Medicaid resulting in an over $800 billion cut to the Medicaid program over 10 years. Under the per capita caps proposal only an increase in eligibility and a small inflator would adjust the federal payment. The per capita cap proposal would force states to find funding to make up the difference in the federal support or figure out what eligibility group to cut, what services to roll back, how to lower reimbursement for services or make up for the federal support. Creates a state option for Medicaid block grants for children, adults who are not seniors or people with disabilities or both children and adults. It is unclear how people with disabilities will be defined in this and other exemption provisions.

Other Harmful Medicaid Provisions Eliminates the extra 6 percent increase in federal match for states that choose the Community First Choice Option, an option that lets states provide a comprehensive community based alternative to facility-based services. Reverts the mandatory Medicaid income eligibility level for children back to 100 percent of federal poverty level ($11,880 for an individual, $24,300 for a family of 4) for children between the ages of 6-19 (from its current level of 133 percent of poverty). Eliminates the 3 month retroactive coverage requirement (changes it to the month of application). This change could make it more difficult for states to make eligibility determinations to cover people in emergency situations; force many people into medical bankruptcy; and raise uncompensated care costs for hospitals. Through the restructuring and major funding cuts, would jeopardize support to school children with disabilities who receive numerous supports and services as part of their education plans. In 2017, 68 percent of school superintendents reported using Medicaid funds for school nurses, counselors, speech therapists, and other health professionals.

HCBS SETTINGS RULE

New Guidance Released this Tuesday, May 9, 2017 Extends timeline for bringing settings into compliance to March 2022 Timeline for transition plans remains 2019 Note on Heightened Scrutiny

Trends in State Transition Plans Some states are using the HCBS regs as a real opportunity implement systems change to support full integration Including phasing out sheltered workshops, setting size limits on residential settings, and expanding capacity of non-disability specific settings Varied approach to presumptively institutional settings, especially “settings that isolate” Some states are being rigorous in identifying settings that are presumed institutional (such as settings on the grounds of institutions, campuses, and sheltered workshops) Other states are only identifying settings on the grounds of/adjacent to public institutions and have said they will seek to continue funding these settings

For initial approval: States that include methods to validate their systemic assessments included in the plan Included outcomes of the assessment and any needed remediation strategies (legislative changes, contract changes and changes to regulations) Appropriate 30 day comment period and inclusion of a summary and response to comments collected.

For full approval: · A comprehensive site-specific assessment of EVERY HCBS setting, including necessary strategies for validating results. · Draft remediation strategies with a timeline for the remediation strategies that align with the end of the HCBS transition period (March 17, 2019). · Site specific remediation strategies · Identifying a heightened scrutiny process for settings that are identified as presumed to be institutional.

For full approval (cont’d.) · Identify a process for communicating with beneficiaries who may be impacted by changes, closures, etc. · Establish ongoing monitoring and quality assurance processes. · Process to evaluate privately-owned homes, can’t assume they don’t have characteristics that isolate. · Plans to ensure that there is adequate capacity in the state for non-disability specific settings · No reliance on reverse integration for non-residential services Use of CDC funds to skirt the HCBS rule is on CMS’ radar. WIOA factor

Questions? Feel free to contact me: Jorwic@thearc.org -(202)783-2229 x322