Federal Perspective Changes in Medicaid Alice Burton, Director AcademyHealth June 2, 2005

Medicaid & SCHIP – Federal Changes  Budget resolution calls for $10 billion in Medicaid reductions over 5 years –Budget Resolution is broad budget framework –Final Medicaid reductions might be more or less than $10 billion  Medicaid Commission created  SCHIP Reauthorization due by 2008, maybe sooner

Medicaid Commission  “To advise Secretary on ways to modernize Medicaid the Medicaid program so it can provide high quality health care to its beneficiaries in a financially sustainable way” (CMS Charter, 5/19/05) –By Sept – recommendations on $10 billion in savings over 5 years –By Dec – Longer-term recommendations that ensure sustainability

Potential Sources of Medicaid Savings  President’s budget savings proposals totaled $13.9 billion over 5 years (CBO scoring) –Provider taxes $5.7 billion –Rx pricing $5.2 billion (some Govs support) –Asset transfer $1.4 billion (some Govs support) –Targeted case management $1.5 billion  Gov Warner letter with suggested savings: Rx pricing, asset transfer and $2 billion by allowing states to charge higher co-pays

Next Steps in Federal Budget Process  Commission report – September 1, 2005  House and Senate Committee action –Response to reconciliation instructions expected by September 15, 2005  Appropriations bills separate  FY 2006 starts October 1st

States Propose Changes to Medicaid  Reductions in Eligibility: –Tennessee & Missouri  Concept papers or waivers to “redesign” including individual accounts –Florida, Georgia, Vermont, West Virginia, New Hampshire  Changes to Disproportionate Share Funding and other financing issues