1. Medicaid Reform & 1115 Waivers
Seema Verma, MPH
President & Consultant
SVC Inc

2. Medicaid 50 Year Anniversary
President Johnson & War on Poverty:
“We want to give the forgotten fifth of our people opportunity not doles..”
Changing Health Landscape Over 50 Years
Private Health Insurance Changes
Copays, deductibles, coinsurance, health savings accounts
Managed Care, HMOs
Medical advances, new pharmaceuticals & technology
Rising uninsured as health care costs increase

3. Pre Affordable Care Act: Patchwork Quilt of Programs
Government Programs
Ryan White Care Act
Children’s Health Insurance Program- CHIP
Medicaid
Low Income Parents
1115 Waivers (childless adults)

4. Medicaid Entitlement Program Designed for Vulnerable Populations
Aged, Blind, Disabled, Pregnant Women & Children
Financing Mechanism
Retroactive coverage, presumptive eligibility
Limited cost sharing & enforceability
Choice provisions
Robust benefits
Results:
Health Outcomes- Oregon Study
Limited incentives for health improvement
Little to no disincentives for undesired behaviors
Seek coverage only when sick, in ER rooms
Lack of focus on prevention, maintaining health, & preventing disease
Access issues
Over-consumption

5. State Concerns Medicaid Growing Proportion of State Budgets
Significant Efforts Around Controlling Growth
Growing use of managed care
Restrict enrollment
Provider Rates
Limited State Flexibility
Supreme Court Decision
Reluctance to Expand

7. Innovating with Medicaid Expansions
To date 30 states and D.C. have elected to expand Medicaid
Expansion discussion is different in every state
Legislative Approval (?)
Expansions in 5 states through 1115 waivers
Arkansas, Iowa, Michigan, Indiana, New Hampshire & Pennsylvania
Efforts in Utah, Tennessee & Wyoming efforts stalled
Expansion in Indiana has been estimated to cost ~2.5 Billion between 2014 and 2020.

8. Reform Themes Platform for Reforming the Program
Promoting Self-Sufficiency Not Dependency
Familiarizing Individuals with Private Market
Personal Responsibility
Improving Health Outcomes
Push for State Flexibility
Garner support from local legislators

9. 1115 Waivers
HHS has broad authority to grant waivers & ACA does not limit its authority
Requested Waivers:
Entitlement Reform Through Increased Personal Responsibility
Provide Health Incentive Programs
Disincentives
Benefit Flexibility
Cost-Sharing* (limited flexibilities)
Retroactivity
Cost-Effectiveness
Work Requirement (not approved)
Policies Structured to Encourage Maintenance of Coverage
New Hampshire Legislation: XXIII.(a) The commissioner shall provide access to the health insurance premium payment (HIPP) program established by the department pursuant to section 1906 of the Social Security Act of 1935 to Medicaid newly eligible adults from 0 – 133 percent of the federal poverty level (FPL) who are eligible for medical assistance under section 1902(a)(10)(A)(i)(VIII) of the Social Security Act of 1935, as amended, 42 U.S.C. section 1396a(a)(10)(A)(i) (“newly eligible adults”) and their spouse and dependents if applicable until December 31, 2016 to maximize the use of private insurance and available federal assistance. All newly eligible adults who have access to qualified employer sponsored insurance either directly as an employee or indirectly through another individual who is eligible for qualified employer sponsored insurance, shall be required to participate in the HIPP program in order to receive medical assistance, if eligible and determined by the department to be cost effective as required by the federal Centers for Medicare and Medicaid Services (CMS).

10. Original Healthy Indiana Plan (HIP) Structure
Key Features:
High deductible plan paired with a Health Savings like account
Comprehensive benefits, but no dental, vision or maternity
$1,100 deductible paid by POWER account
Required monthly contributions
No copays, except for non-urgent use of ER
Enrollment cap
Medicare payment rates
$500 Free
Preventive
Care
Smoking cessation
Cancer screenings
Diabetes care
Physicals
Personal Wellness and Responsibility (POWER) Account
$1,100 individual* & State contributions
Controlled by participant to cover initial medical expenses
3/2/15: Update formatting
Power Account is the key innovation in HIP
Account is used to cover $1,100 HIP deductible
All members have a POWER account
Members required to contribute a monthly amount to the POWER account, not to exceed 5% of income
State also contributes to ensure account is funded to $1,100
If members receive preventive services they may roll over any balances in the POWER account to reduce future contributions
Members keep POWER account contributions if they leave the program
POWER accounts may not be used to pay required $25 co-payments for non-emergency use of the emergency room
Insurance Coverage
$300,000 annual coverage
$1 million lifetime coverage
*Individual contribution not to exceed 5% of gross annual household income

11. Additional Features No Retroactive Coverage Effective date:
Must make payment within 60 days to begin coverage
Once payment is made, plans changes only for cause
Plan Choice must be made before payment and at time of application
3/2/15: Update formatting

12. Healthy Indiana Plan (HIP) Success
HIP improves health care utilization
Inappropriate emergency room use 7% lower than traditional Medicaid beneficiaries
60% of HIP members receive preventive care - similar to commercial populations
80% of HIP members choose generic drugs, compared to 65% of commercial populations
HIP results in high member satisfaction
96% of enrollees satisfied with HIP coverage
82% of HIP enrollees prefer the HIP design to copayments in traditional Medicaid
98% would enroll again
HIP promotes personal responsibility
93% of members make required Personal Wellness and Responsibility (POWER) account contributions on time
30% of members ask their healthcare provider about the cost of services
31% of HIP members had an ER visit, 38% of HHW members had an ER visit. 5% of HIP responded that the ER copay influenced their decision to seek care and an urgent care center or their regular provider.
Oregon Health Insurance Experiment: (A. Finkelstein 2011)—shows that as members have insurance and are shielded from the cost of care, healthcare utilization increases. In the first year, the treatment group (those who gained access to Medicaid) had substantively and statistically significantly higher health care utilization (including primary and preventive care as well as hospitalizations) than the control group (those who did not gain access to Medicaid).

13. HIP 2.0: Three Pathways to Coverage
Best Value
Initial plan selection for all members
Benefits: Comprehensive coverage with enhanced benefits, including vision, dental, bariatric, pharmacy
Cost sharing:
Monthly POWER account contribution required.
Contribution is 2% of income with a minimum of $1 per month.
ER copayments only
HIP Plus
Fall-back for members with income <100% FPL who do not make POWER account contribution
Benefits: Minimum coverage, no vision or dental coverage
Must pay copayment ranging from $4 to $75 for doctor visits, hospital stays, and prescriptions
HIP Basic
Employer plan premium assistance paired with HSA-like account
Enhanced POWER account to pay for premiums, deductibles and copays in employer-sponsored plans
Provider reimbursement at commercial rates
HIP Link
3/2/15: Added comprehensive coverage to HIP Plus (so it doesn’t JUST sound like they are getting vision, dental, etc.), update “income” and “who” for Basic, add hyphens to Link language
1/21/15: Update HIP Basic benefits w/ minimum coverage standards, rephrase HIP state plan individuals
Updated with 2% of income, with min of $1 and max $100 per month

14. Non-Payment Penalties
Members remain enrolled in HIP Plus as long as they make POWER account contributions (PACs) and are otherwise eligible
Penalties for members not making the PAC contribution:
Moved from HIP Plus to HIP Basic
Copays for all services
Income ≤100% FPL
Dis-enrolled from HIP*
Locked out for six months**
Income >100% FPL
3/2/15: added “income”
1/21/15: Clarified exceptions, removed sending to FFM
1/19/15: Added what happens if a person becomes medically frail during lockout period.
Added: Exceptions to lock-out over 100% FPL
*EXCEPTION: Individuals who are medically frail.
**EXCEPTIONS: Individuals who are 1) medically frail, 2) living in a domestic violence shelter, and/or 3) in a state-declared disaster area. If an individual locked out of HIP becomes medically frail, he/she should report the change to his/her former health plan to possibly qualify to return to HIP early.

15. Emergency Department (ED) Copayment Collection
HIP features a graduated ED copayment model
HIP requires non-emergent ED copayments unless:
Member calls MCE Nurse-line prior to visit or
The visit is a true emergency
1st non-emergent ED visit in the benefit period $8
Each additional non-emergent ED visit in the benefit period
$25
3/2/15: Update formatting
UPDATE: Changed ER to ED to align with previous slide terminology, standardize “copayment” and “cost sharing”
UPDATE: formatting

16. Final Agreement Nation’s first Preservation of HIP
Ends traditional Medicaid for Non-Disabled adults
6-Month Lock-Out
$25 ER copayment for non-emergency visits
Defined contribution premium assistance program
Minimum contributions for HIP Plus at all levels of poverty
Two-tiered benefit structure
Preservation of HIP
Lock-out- Consistency With Exchange Policies
Effective date
Retroactivity
Plan changes
3/2/15: Update formatting

17. Activity so far… Program began same day as announcement
In the first month since Governor Pence announced HIP 2.0:
Transitioned 170,000 from Medicaid into HIP
Approx. 297,0000 applications for health coverage
70% Participating into HIP Plus
3/4/15: ADD newly eligible approved, CHANGE time since HIP approved, DELETE reference to and call volume #s
3/2/15: Need to clarify the 37,000 in month one – what does that number represent?
Notes: 60% increase in our online applications

18. Approved Demonstration: Arkansas
Element
Detail
Effective Date
January 2014
Structure
Non-medically frail adults receive premium assistance to enroll in qualified health plans offered on the federal Marketplace.
Benefits
Offers the QHP benefits that are certified to be EHB to non-medically frail adults. EPSDT, non-emergency transportation, and free choice of family planning provider are provided as wrap around services.
Cost Sharing
State plan copayments are required for individuals over 100% FPL. Waiver amendment requests cost sharing at state plan amounts to be applied to individuals over 50% FPL.
Incentives
Waiver amendment requests addition of health savings accounts for members.
Unique feature: Covers all non-medically frail adults through premium assistance in the Marketplace.
AR has not implemented the cost sharing? Can you give me details on the HSA model?

19. New Hampshire Element Detail Effective Date Approved Structure
Non-medically frail individuals will have mandatory enrollment in QHPs available on the federal marketplace
Individuals with access to cost-effective ESI will be mandatorily enrolled in ESI
Benefits
QHP benefits with state plan benefit wrap
Cost Sharing
State Plan cost sharing
Incentives NA
Unique feature: Requires individuals with access to cost effective ESI to enroll in ESI and mandatorily enrolls non-medically frail individuals in QHPs available on the federal marketplace.

20. Approved Demonstration: Iowa
Element
Detail
Effective Date
January 2014
Structure
Individuals with income under 100% FPL served through Medicaid Accountable Care Organizations. Individuals with income over 100% FPL enrolled in Marketplace QHPs with premium assistance or ESI.
Benefits
Income under 100% FPL:
Benefits based on state employee benefits with EHB
Income over 100% FPL:
Benefits based on state essential health benefits offered in QHPs.
Offers dental benefits for those who complete periodic dental exams. 1- Year waiver for non-emergency transportation.
Cost Sharing
Premiums required for all individuals with income at 50% FPL or more. Copayments for non-emergency use of ER but waived in year 1.
Incentives
Premiums are waived in the subsequent year if beneficiaries complete health targeted healthy behaviors.
Unique feature: Premium payments authorized beginning at 50% FPL. Premiums waived if healthy behaviors completed.

21. Approved Demonstration: Michigan
Element
Detail
Effective Date
April 2014
Structure
Covers the expansion population through the existing Medicaid Managed Care structure
Benefits
Medicaid Alternative Benefit Plan based on the ACA’s 10 EHBs.
Cost Sharing
No copayments for the first six months. Copayments for the next six month period are applied from the State Plan schedule and are based on care utilization in the previous six months.
Individuals with income over 100% FPL pay a contribution to a health savings-like account of 2% of their household income.
Incentives
Cost-sharing is paid into health accounts and can be reduced through completion of targeted healthy behaviors.
Unique feature: 6 month look-back feature for assessing cost-sharing. Cost sharing collected through health accounts instead of by providers. Cost sharing reduced through completion of targeted healthy behaviors.
Michigan benefits = state plan benefits, add compliance with EHBs

22. Approved Demonstration: Pennsylvania
Element
Detail
Effective Date
January 1, 2015
Structure
Covers the expansion population through private Medicaid managed care plans.
Benefits
Base benchmark plan for newly eligible not specified, pending future State Plan amendment. Will not provide non-emergency transportation services.
Cost Sharing
All demonstration beneficiaries pay state plan copayments in year 1. In year 2 copayments will only be charged for non-emergency use of the ER. Beneficiaries with income over 100% FPL will be subject to monthly premiums of 2% of income.
State will collect and analyze copay data for individuals under 100% FPL and submit amendment seeking premiums for this group based on average copayment amounts.
Incentives
Beneficiaries may reduce their premiums or copayments by completing healthy behaviors in the prior year. Reductions will be evaluated every 6 months. Provides incentives for job search and work related activities.
Unique feature: Premiums for individuals under 100% FPL will be based on average copays assessed in year 1.
Do they charge premiums for everyone under 100% FPL. Need more info on the job search and work related activities

23. New Waiver Issues Work Requirements Time Limited Benefits Cost-Sharing
Pennsylvania & Utah
Administration Perspective
Welfare Reform
Oklahoma
Time Limited Benefits
Cost-Sharing

24. Indiana Waiver
HIP 2.0 applicants and members referred to existing State workforce training programs and job search resources if:
Unemployed or working less than 20 hours per week AND
Not full-time students
QUESTION: Will there be any opportunity for other individuals to access DWD resources?
Notes:
SNAP recipients who have already been sent to Gateway to Work will not be referred again
Not participating in the Gateway to Work program does not impact HIP 2.0 eligibility

25. 1332 Waivers ACA allows for 1332 waivers starting in 1/1/2017
QHPs, Exchanges, Tax Credits, Cost-Sharing
Requires State legislation
Waivers Must:
(1) provide coverage that is at least as comprehensive
(2) provide coverage and cost sharing protections against excessive out-of-pocket spending that are at least as affordable as current provisions
(3) provide coverage to at least a comparable number of people
(4) will not increase the federal deficit.

26. 1332 Waivers Activity Will Pick-Up After 2016 Election
Coordination with Medicaid/Expansion & Waivers
Individual & Employer Mandates
Rating Rules
Benefit Design

27. Seema Verma sverma@svcinc.org (317) 809-8536
Questions
Seema Verma (317)