What the Affordable Care Act Means for Aging Consumers October 1, 2010 Alliance for Health Reform Briefing JoAnn Lamphere, DrPH Director, State Government Relations Health & Long-term Care Issues AARP

Significance of Affordable Health Act (ACA) > Affordable Care Act -- most significant federal health and long-term care legislation since Medicare & Medicaid enacted (1965) > Unprecedented investment in expanding community-based home care & social supports and improving infrastructure, building care models for those with chronic conditions, and improving care quality > As public understanding grows about ACA, specifically its investment in community-based long-term services & supports (LTSS) and improved chronic care models, their support for the law expands AARP 2

Preferences of Aging Population Misaligned With Long-term Care System > Nearly nine in ten individuals ages 50+ assert they want to stay in their homes & communities as long as possible > Becoming a family burden is seniors greatest fear > Family caretakers now shoulder the overwhelming responsibility of care; value of unpaid services = $375+ bil (2008) > Medicaid long-term care spending still is heavily weighted toward institutional care > Designing patient-centered & coordinated long-term supports & services is a critical goal to improve system performance given > dramatic population growth among aged > constrained public resources AARP 3 Source: AARP Public Policy Institute

The Value of Home and Community-Based Services (HCBS) > Medicaid dollars spent on HCBS can support nearly three adults and individuals with disabilities, on average, for every one person in a nursing home (AARP Public Policy Institute) > States that invest in HCBS can, over time, slow their rate of growth in Medicaid spending on LTC. While expansion of HCBS does require an up front investment, a reduction in institutional spending and long-term cost savings results (Kaye, LaPlante, and Harrington, 2009) > Across USA, public and private sector leaders in health sector designing & testing expanded and integrated models of community care > New federal health law supports these developments AARP 4

Implementing Care Improvements Under ACA > The ACA provides important opportunities for states to improve the structure and setting of care, between institutional and HCBS, even in the current tight fiscal environment > ACA creates new Medicaid initiatives that offer financial incentives to states to improve access to HCBS. Balancing Incentives Payment Program – 2 or 5 percentage increase in FMAP Community First Choice – consumer-controlled new Medicaid option, 6% enhanced FMAP, for attendant services Money Follows the Person Rebalancing Demonstration grants Other > ACA uses Medicaid to transform health care delivery – health homes, workforce, quality, care transitions, etc. AARP 5

State Implementation of HCBS Provisions > States are awaiting CMS guidance so they can evaluate how these options will interact with each other and current system > Helpful to have BIPP and CFC guidance at same time so states can look at together, not in isolation > How will all the puzzle pieces fit together? States must consider how new provisions will interact with current state programs (waivers, etc.) and current fiscal environment > CMS Guidelines will inform states thinking on how to implement. Example: Balancing Incentives Payment Program (2% vs. 5% enhanced FMAP) What services are included? Definitions of institutionally based vs. non-institutionally based? Population issue – disparities in balance between populations (older people and adults w/ physical disabilities) AARP 6

Achieving the Promise of Health Care Reform > Home and community-based services are vulnerable in tough economic times (Medicaid optional services) > At the state level, required Medicaid population expansions combined with constrained state revenues and the current optional status of Medicaid HCBS create opportunities to now forge consensus on the imperative to design new model(s) of community-based services for long-term care consumers > Now is the time for creative and bold innovation: encourage the design & testing of new approaches that are patient-focused and cost-effective AARP 7