The Affordable Care Act: Putting Reform into Medicaid and Medicaid into Reform Cindy Mann, JD CMS Deputy Administrator Director Center for Medicaid, CHIP & Survey & Certification Centers for Medicare & Medicaid Services Texas Center for Public Policy Priorities September 23, 2010

CMCS: Our Mission  To help States make Medicaid and CHIP the best programs they can be and to contribute to the broader goal of improving health care for all Americans  Beneficiaries are our focus

Implementing the Affordable Care Act  Working with States and Insurance Commissioners  Coordinating with other federal agencies  Sharing ideas about what reform means with a broad array of stakeholders  Promulgating regulations and guidance 3

Progress So Far  Establishing State High Risk Pools & Federal Pre-existing Condition Insurance Plan (PCIP)  Delivering small business tax credits  Establishing a retiree reinsurance program  Accelerating efforts to reduce waste, fraud, and abuse  Implementing a new Patient’s Bill of Rights; prevention regulations  Guidance on new Medicaid options 4

Building a Foundation  Consumer web portal,  HHS and IRS are working closely to develop a common set of standards for data exchange  Reduce expenses and uncertainty in building interfaces  Working to get funding to States quickly for all of the health reform efforts including:  Rate review grants to hold insurers accountable for unreasonable insurance rate increases  Consumer grants to enhance States’ ability to address consumer inquiries, file appeals and help people enroll in coverage  Exchange State planning grants to assist States in their planning for implementation

A System of Coverage Exchange Employer Coverage Medicaid/ CHIP Medicaid/ CHIP

Projected Changes in Coverage by 2019 Total new coverage = 32 million Source: Congressional Budget Office, March 2010

Sources of Coverage by m 22m 24m51m 159m ( For All Individuals under 65) Source: Congressional Budget Office, March 2010

Putting Medicaid into Reform  Medicaid coverage for adults up to 133% of the federal poverty line  CHIP and Medicaid coverage for children at higher incomes (States’ March 23, 2010 levels)  Increased federal funding across the board

 Significant increase in federal support for Medicaid/CHIP 100% match for “newly eligible” group for 3 years and 95-90% match thereafter Increased match for “childless adults” in “expansion” states (reaches 93%/90% in 2019/2020) Increased match for CHIP in 2016 (enhanced plus 23 percentage points) Regular federal match for remaining currently eligible groups State Financial Impacts

Estimated Distribution of Costs for Medicaid Coverage Changes: (in billions) Total $464.7 billion Source: Medicaid Coverage and Spending in Health Reform, John Holahan and Irene Headen/Kaiser Commission, May 26, Who Pays?

 Certain State-funded services may no longer be needed  Reductions in uncompensated care and cost shifting  Greater efficiencies  DSH funding declines (as will State contributions) Other State Financial Impacts

 Not a “safety net” but a full partner in assuring coverage for all  Eligible = enrolled  Law contemplates a system made up of different components to achieve seamless coverage, quality and cost containment objectives New Paradigm

Creating a high performing Medicaid program  Systems upgrades and data/performance standards  Delivery and payment reforms  Focus on “dual eligibles”  Further progress (re)balancing long-term care services and supports  Close attention to program integrity Putting Reform into Medicaid

The “Triple Aim” Per Capita Cost Experience Of Care Population Health

Effects of the Affordable Care Act on Per Capita National Health Expenditures NHE Per Insured Person US Insured Population (Millions)

Bottom 95% of Enrollees Top 5% Elderly % Disabled 31.79% Adults 1.75% Children 3.72% Top 5% Elderly 1.82% Disabled 2.61% Adult.21% Children.36% Bottom 95% of Enrollees Enrollees Total = 60.6 million Expenditures Total = $292.9 billion 5% 54% Source: FY MSIS 2008, FY MSIS 2007 for AZ, NC, ND, HI, UT, VT, WI Top 5% of Enrollees Accounted for More than Half of Medicaid Spending in FY 2008

2014 Begins Now! 2014 Begins Now! 18

Adopt New Laws/Budgets Provider Networks/ Contracts Staffing Training Federal Actions Eligibility Rules Benefit Designs Systems Support Basic Option System Changes New Rules/Forms Data Performance Standards Exchange/ Medicaid Org Structure FMAP Rules State Actions Enrollment … Collaboration with States is Essential

 Uninsurance rates for children have steadily dropped due to Medicaid/CHIP  Coverage levels holding steady even in economic downturn  Disparities are narrowing Percentage of Children Without Health Insurance, By Poverty Level, Children below 200% of poverty Children above 200% of poverty 23% 16% 12% 6% 5% Lessons from Children’s Coverage Efforts: Success is Possible

Children’s Coverage Does Not Need to Wait The Secretary’s Challenge: Enroll the 5 million uninsured children who are currently eligible for Medicaid or CHIP over the next five years

Children in Texas Rate of Medicaid/CHIP Participation & Distribution of Eligible but Uninsured Children in the Largest Counties (2008) Source: Analysis of Urban Institute's Health Policy Center ACS Medicaid/CHIP Eligibility Model, based on data from the 2008 American Community Survey (ACS) September 17, Rest of State 74.9% (35.4 percent of children in Texas live in counties that cannot be distinguished from other counties using the ACS.) % % %

Key to Reaching Our Goals: Assuring that all Partners are at the Table