Florida's Medicaid Program: Looking Ahead to 2012 Joan Alker and Jack Hoadley Georgetown University Health Policy Institute Webinar, December 7 th, 2011

Looking Ahead to 2012, What Changes Are In Store for Florida's Medicaid Program? 2

What is an 1115 waiver? o A provision in the Social Security Act which allows the Secretary discretion to waive certain federal rules o The proposal must assist in promoting the objectives of the Act o Must be experimental, pilot or demonstration – can’t just be designed to save $.

Medicaid Enrollment % 33.3%

Cost of Florida’s Medicaid Program 5 o Total annual costs slightly less than $20.3 billion o FMAP= 55.94% in SFY o FMAP is projected to rise to 59.14% in SFY 14-15

Medicaid’s Budget: Putting Costs in Context, SFY SFY 2009 Source: Kaiser Commission on Medicaid and the Uninsured, "Policy Brief Update: State Budgets in Recession and Recovery," October

Florida’s Budget, SFY SFY 2009 Source: 2008 and 2009 Annual Survey of State Government Finances. U.S. Census Bureau and 2009 NASBO State Expenditure Report 7

Florida’s Medicaid Spending State Medicaid Spending, as a Share of the State General Fund State Medicaid Spending, as a Share of the State General Fund and Other State Fund Expenditures Florida14.49%15.98% National Average14.73%11.33% Source: Georgetown University Center for Children and Families calculations based on National Association of State Budget Officers, "2009 State Expenditure Report" (December 2010). 8

Growth in Florida Medicaid Enrollment and Spending, Source: Georgetown University calculations of “Social Services Estimating Conference - Medicaid Services Expenditures" (March 1 and October 17, 2011); and "Social Services Estimating Conference - Basic Medicaid Caseloads, Historical and Forecasted” (September 9, 2011). 9

Per-Person Five Year Growth in Health Care Costs, Source: Georgetown University calculations of Kaiser Family Foundation & Health Research & Educational Trust, "Employer Health Benefits 2011 Annual Survey" (September 2011); and Projected National Health Expenditure Data; "Social Services Estimating Conference - Medicaid Services Expenditures" (March 1, 2011); and "Social Services Estimating Conference - Basic Medicaid Caseloads, Historical and Forecasted" (January 24, 2011). 10

What’s in the 2011 Legislation? o Required enrollment in managed care for most Medicaid beneficiaries o Managed long-term care program o $10 monthly premium requirement o $100 copay for non-emergency use of ER o Enhanced benefits program: credits for healthy behaviors o Opt-out to purchase private, employer- sponsored insurance 11

Mandatory Managed Care Populations o Children and parents who are eligible because of their incomes o Aged and Disabled persons receiving SSI disability (except those with developmental disabilities) o Children eligible because they are disabled (SSI) o Pregnant women o Children with chronic conditions who participate in Children’s Medical Services Network o Children in foster care and/or receiving adoption subsidies o Individuals eligible for hospice-related services o Individuals eligible for both Medicaid and Medicare (“dual eligibles”) o “Medically Needy” 12

Voluntary Managed Care Populations o Individuals residing in an institution, such as a nursing home, sub-acute inpatient psychiatric facility for those under the age of 21, or an Intermediate Care Facility for the Developmentally Disabled o Individuals with developmental disabilities o Individuals that have other creditable health care coverage, excluding Medicare o Individuals residing in residential commitment facilities, operated through the Department of Juvenile Justice or mental health treatment facilities o Refugees o Individuals with developmental disabilities enrolled in the home and community based services waiver program, those on the waiting list for this program, or those who are residents of developmental disabilities centers 13

Exempt Managed Care Populations o Women who are eligible for family planning services o Women who are eligible through the breast and cervical cancer program o Persons who are eligible for emergency Medicaid only o Children receiving services in a pediatric extended care facility 14

What Will the Federal Government Do? o Negotiations have been underway all year on extension of five-pilot county waiver Some of those issues will carry over o CMS could act on some parts of the waiver and not others (1915 (b) and (c), SPA) o A lot of negotiations!! 15

Proposed Medicaid Premiums Challenge Coverage for Florida’s Children and Parents 16

FL NC SC GA LATX AL AR KS OKAZ TN MS NV UT NM CA WY ID WA OR ND SD NE MT MO IN MI WI IL ME OH KY HI AK WV VA CT NJ DE MD RI NH VT DC MA CO IA NY MN Uninsured rate higher than national rate (16 states) Uninsured rate lower than national rate (30 states including DC) No statistically significant difference (5 states) PA 17 How is Florida doing in covering children? Florida=12.7% US=8%

Increase in Child Poverty Source: US Census Bureau, American Community Survey ACS 18

Florida Still Has Many Uninsured Children 19

Florida had largest decline in number of uninsured children in Source: Georgetown University Center for Children and Families, “Despite Economic Challenges, Progress Continues: Children's Health Insurance Coverage in the United states fro m ” 20

Florida led nation in decline of uninsured rate Source: Georgetown University Center for Children and Families, “Despite Economic Challenges, Progress Continues: Children's Health Insurance Coverage in the United states fro m ” 21

Proposed New Premiums o $10 monthly premium on Medicaid beneficiaries, regardless of income Primary exception: those living in nursing homes o Premium would be a condition of eligibility o $10 premium far exceeds allowable limits under federal law o Thus requires federal government waiver 22

Illustrative Premiums under Proposal 23 Assumed Family Income Yearly Premiums Premiums as Percent of Income Family with 1 parent, 2 children $11,000$3603% Family with unemployed parent, 2 children $4,000$3609% Family with 2 covered children $13,000$2402% Pregnant woman, no children $14,000$1201%

Premiums in Other States o States currently charging premiums For children: 34 For adults: 23 o Only 8 states have premiums that reach families with incomes as low as 101% of FPL o No other state currently charges premiums to children under the poverty line 24

Case Study in Oregon o Higher premiums for adults below poverty $6 to $20 per month, based on income o Enrollment dropped from 104,000 in February 2003 to 24,000 in November o One-third cited premiums as key factor o Two-thirds became uninsured o Total state premium revenues declined 25

Other State Experiences o Missouri: 30% enrollment decline over two years o Maryland: 28% of children disenrolled $37 monthly premium at higher income levels o Urban Institute study: even small premiums (as share of income) decrease enrollment 26

Expected Effect of Increasing Premiums on Participation Rates 27 Source: Leighton Ku and Teresa Coughlin, “Sliding-Scale Premium Health Insurance Programs: Four States’ Experiences,” Inquiry 36(4): , Winter

Applying the Model to Florida o Estimates made for different eligibility groups, based on income levels Families with TANF-based eligibility ≤ 59% FPL Families with unemployed parent ≤ 22% FPL Children based, on age and income Pregnant women, based on age and income o 807,000 children and parents projected to drop coverage 28

Over 80% of Those Expected to Lose Enrollment are Children Source: Georgetown Health Policy Institute Analysis 29

Most Beneficiaries Projected to Lose Enrollment are Below Poverty 30 Source: Georgetown Health Policy Institute Analysis

What Happens to Children and Families Who Disenroll? o Many will have no other option for coverage Those working at low-paid jobs often have no employer health insurance offered When offered, insurance has much higher premiums than proposed in Medicaid Those without jobs have few insurance options o The result: many likely to become uninsured 31

Reliance on the Safety Net o Without insurance, people turn to emergency rooms and safety net clinics and hospitals Neglected preventive care Added burden for safety net clinics, hospitals Higher costs for state and localities o Increased cycling on/off coverage Greater administrative costs Adverse selection 32

For More Information o Visit the Jessie Ball duPont Fund website o Visit the Winter Park Health Foundation website o The Georgetown University project website 33