Medicaid in 2007—A precursor to broader entitlement and healthcare reform? June 13 2007 Jon Blum

The State of Medicaid in 2007 is Very Different From What We Would Have Predicted 12 Months Ago Federal Medicaid Commission has failed to gain momentum After a flurry of activity, state waiver activity is down States have yet to implement cost containment tools authorized by the DRA Implementation of Part D appears stable

In 2006 MA and VT Approved Major Coverage Initiatives, Which Led Other States to Consider Expanding Coverage In 2006 and 2007, Over 20 States Have Introduced Plans to Expand Coverage for the Uninsured Coverage Initiatives Proposed in 2006 Coverage Initiatives Proposed in 2006 & 2007 AK HI CA AZ NV OR MT MN NE SD ND ID WY OK KS CO UT TX NM SC FL GA AL MS LA AR MO IA VA NC TN IN KY IL MI WI PA NY WV VT ME RI CT DE MD NJ MA NH WA OH D.C. In 2006, a handfull of states proposed limited coverage expansions that use premium subsidies and public-private partnerships to increase coverage for employees in small businesses. Implemented or approved coverage initiatives Coverage expansion introduced by governor or legislature No Recent Coverage Initiatives Note: State initiatives to expand coverage to children only are not included in this map. *Maine is proposing updates to its Dirigo Health plan, which was created in 2003. Source: Avalere Health research and tracking, updated as of 6/6/07. Note: State initiatives to expand coverage to children only are not included in this map. Source: Avalere Health research and tracking, updated as of 6/6/07.

Eight Elements of Coverage Expansions Public Program Expan-sions (new public $$) Shared Funding Respon-sibilities Effective targeting of eligible popula- tions and funds Coverage Expansions Explicit tradeoffs between benefits and afforda-bility Personal Respon-sibility Facilitate Private Markets Improve Healthy Lifestyles Leverage Private Contribu-tions

Kennedy-Hatch SCHIP Reauthorization Principles “Children must be the primary focus of the CHIP program” “We propose adopting national pediatric quality standards” “We support states in their efforts to prevent childhood obesity” “We proposing eliminating existing barriers that make it difficult for states to provide premium support through CHIP for children in families with qualifying incomes that have access to employer-sponsored coverage” “The current system of allocating CHIP funds should be better targeted”

Medicaid Enrollment in Managed Care Organizations (MCOs) Continues to Grow Nationally Medicaid MCO Penetration, United States1 Top Medicaid MCO States in 2005 By Percent Enrollment1: Tennessee = 100% Arizona = 100% Hawaii = 79% By Total Enrollment1: California = 3.2M New York = 2.5M Tennessee = 1.3M* By Spending: California = $5.5B Pennsylvania = $4.3B New York = $4.2B Total Enrollees: 1995=9.8M; 2005=28.6M *Tennessee recently reduced its Medicaid eligibility by 400,000 beneficiaries. This change will decrease total MCO enrollment in the state. 1 Avalere analysis of CMS Medicaid Managed Care Enrollment Reports.

State Healthy Lifestyle Initiatives AK HI CA AZ NV OR MT MN NE SD ND ID WY OK KS CO UT TX NM SC FL GA AL MS LA AR MO IA VA NC TN IN KY IL MI WI PA NY WV VT ME* RI CT DE MD NJ MA NH WA OH D.C. States with Healthy Lifestyles Programs or Planning Programs No Activity *Updated as of January 2006.

Care Coordination for Dual Eligibles AK HI CA AZ NV OR MT MN NE SD ND ID WY OK KS CO UT TX NM SC FL GA AL MS LA AR MO IA VA NC TN IN KY IL MI WI PA NY WV VT ME* RI CT DE MD NJ MA NH WA OH D.C. PACE Other Medicare/ Medicaid Integration Project Operates Multiple Programs No Activity *Updated as of January 2006.

Tomorrow’s Medicaid Challenges Federal and state budgets Long-Term Care Federalization Consensus on broader coverage solutions Access to healthcare services Erosion of Employer Sponsored Insurance Appropriate role of private vs. public delivery