Health Care - What’s Next April 22, 2017 Elisabeth Arenales, Esq. Colorado Center on Law and Policy 789 Sherman St., Suite 300, Denver, CO 80203 303-573-5669 x301, earenales@cclponline.org 1

Congress Reconvening next week President wants a vote Congress needs to pass a CR New additions to the AHCA on the table: Reinstate Essential Health Benefits Add limited waivers for states on: Essential Health Benefits Health status IF there is a high risk pool.

Where are we in this conversation? Seems like we are back to basics: individual mandate, guarantee issue, affordability

Major Proposals Medicaid – financing changes Per Capita cap or block grant Structural changes Eligibility changes Individual insurance market Eliminating supports that make Exchanges work New Market Stabilization Regulations Uncertainty about Cost Sharing Reductions (CSR)

Medicaid’s Role Long term care- Medicaid makes Medicare work for seniors and people with disabilities. Children- covers 40% of Colorado kids. Pregnant women- pays for @ 1/3 of all births. Parents of low-income children Low-income adults.

Larimer County @ 19% of total population on Medicaid 23,017 Expansion adults 25,497 children 15,708 non-expansion adults (including disabled and elderly). $326.5 million in total Medicaid expenditures in FY 15/16 https://www.colorado.gov/pacific/sites/default/files/Larimer%20County%20Fact%20Sheet.pdf

Medicaid- What’s at Stake? Per Capita Cap or Block Grant Net federal $ lost to Colorado under AHCA: CHI projects $14B over 10 years (2020-2030) with 600,000 loss in enrollment Avalere projects nationwide cut to Medicaid/Medicare dual beneficiaries of $44 Billion over next ten years. 2019 and 2028, the Better Way proposal would reduce federal Medicaid spending by $841 billion, or 18.1 percent. The AHCA would reduce Factors to consider: aging of population – costs of current enrollees, vs growth in “old, old”, disease outbreaks, new drugs, therapies. federal spending by $457 billion, or 9.8 percent. – without enrollment cuts http://www.urban.org/sites/default/files/publication/89061/2001186-the_imapct-of-per-capita-caps-on-federal-spending-and-state-medicaid-spending_2.pdf Edwin Park, Off the Charts, Correcting the History of Medicaid Per Capita Caps; Colorado Health Institute http://coloradohealthinstitute.org/key-issues/detail/legislation-and-policy/re-aca; Avalere: http://avalere.com/expertise/life-sciences/insights/medicaid-per-capita-caps-could-cut-funding-for-dual-eligible-beneficiaries?utm_source=4-20-2017%3ATSF%3A+Medicaid+Per+Capita+Cap+Analysis%3B+Linkage+Lab+2nd+Cohort%3B+Webinar&utm_campaign=4-20-17&utm_medium=email  

AHCA Impact on Medicaid expenditures: Proposed base year: 2016 CPI Medical Index: growth rate: 3.7% Average annual growth rate, current: 4.3% Kids: 4.7% Adults: 4.5% Disabled: 1.8% Elderly: 3.5 Colorado has gone up and down SOURCE: Urban Institute, Holahan, analysis of:: “Detail of Spending and Enrollment for Medicaid for CBO’s January 2017 Baseline.” Washington DC: Congressional Budget Office, January 2017.

Colorado Fiscal Picture TABOR State revenue growth at 5% this year and 6% next 2017-18 Budget Picture $700M shortfall Hospital Provider Fee Enterprise Hospital decline in income: $264 million - 2017-18 $73 million - 2016-17 SB17-267 SB256 Hospital reimbursement protects low income programs

Realistic Options to Reduce Spending? Provider rates, particularly primary care rates, a long time struggle in Colorado Eligibility gains a two decade effort We have tried traditional managed care Tobacco Tax/Hospital Provider Fee @69,000 expansion adults in City and County, more than 200,000 on Medicaid

Individual Market Some analysts say market beginning to stabilize nationally. New federal rules – Limit open enrollment period to six weeks- can Colorado extend this? Limit access to Special Enrollment Period Cost Sharing Reductions President saying he may pull the rug out.

Options to reduce spending? ACC2.0 Delivery Reform models Medicaid/Medicare eligibles Payment Reform Cost containment? Cost Commission – final report this summer Transparency efforts Lt. Governor’s bill package Delivery System Reform Incentive Payment

Looking Ahead Can we talk about making the ACA work? Regulatory changes? Hurt or help? Waivers and waiver requirements? ACA Section 1332- will it work both ways?

Questions?