1. FY 06 Medicaid Budget Cuts: And the Fight Goes On… Health Action 2006 Saturday January 28, 2006 Rachel Klein Families USA www.familiesusa.org

2. How Far Have We Come? Advocates kept some of the worst cuts from the federal budget $4.75 billion over five years ($6.9 billion without hurricane relief) instead of $10 billion or $15 billion Battle to reform Medicaid continues…

3. Priority #1: Defeat reconciliation House votes February 1 To defeat the bill –Retain original 9 Rs and 197 Ds who voted no first time –Gain the 6 Ds who were absent the first time –Gain at least 5 additional Rs Must educate members on what is at stake, what will happen if this passes

4. $43.6 Billion Cut over 10 years

5. So What Got Cut? Two kinds of cuts: 1.Cuts that make it harder to get Medicaid 2.Cuts that make it harder to get health care

6. Making it harder to get Medicaid

7. Premiums Any person with income below poverty, or over 150% of poverty may be charged premiums Groups exempt: –Mandatory and foster children –Pregnant women –Hospice patients –Institutionalized populations –Women in breast or cervical cancer programs

8. Documentation requirement New requirement that Medicaid applicants provide proof of citizenship (birth certificate or passport) Those who cant can be kicked off or denied Medicaid Mandatory change for states

9. Asset Transfer Rules 1.look back period for asset transfers increased to 5 years instead of 3 2.Moves start of penalty period from date of transfer to date of Medicaid eligibility; an asset transfer does not begin to count until the person needs Medicaid 3.Mandatory change for states

10. Making it harder to get care

11. Higher Cost Sharing Below poverty: No limits specified in the bill 100-150% of poverty: cost sharing up to 10% of cost of service Over 150% of poverty: cost sharing up to 20% of cost of service Definition of Nominal for those who still have nominal copays increases annually with medical inflation

12. Higher Cost Sharing (continued) Services exempt from cost sharing: –Required services to mandatory and foster children (mandatory children include ages 0-6: family income under 133% of poverty; 6-18: family income under 100% of poverty) –Preventive services to any child under age 18 –Pregnancy-related services –Services to hospice patients –Services to institutionalized populations –Secretary-defined emergency services –Family planning services –Services for women in breast or cervical cancer programs

13. Limits on premiums & cost sharing > 100% poverty: Out-of-pocket costs up to 5% of the familys quarterly or monthly income no upper limit on cost sharing or premiums for those with incomes below poverty in current bill Cost sharing and premiums are enforceable

14. New Medicaid Cost Sharing and Premium Annual Limits

15. Benefits Changes Allows states to cut benefits packages to resemble: –Federal Employees Health Benefits Plan or equivalent –State Employees Health Benefits Plan or equivalent –The HMO in the state with the largest non-Medicaid enrollment –The actuarial equivalent of any of the above –Secretary-approved coverage

16. Benefits Changes (continued) Exempt from benefits changes: –Pregnant women –Dual eligibles (people who get both Medicaid and Medicare) –Hospice patients –Institutionalized populations –Medically frail and special needs populations –Long term care eligibles –Blind and disabled –Foster children –Mandatory parents (eligible for cash assistance under state rules as of July 16, 1996) –Women in breast or cervical cancer programs Notably NOT exempt: mandatory children (although EPSDT must technically be maintained)

17. Health Opportunity Accounts

18. Health Opportunity Accounts (continued) Up to 10 state demonstration projects with Secretary option to extend further after first 5 years Personal account for each person/family in Medicaid Deductible up to 110% of amount in account Up to $2,500/adult or $1,000/child to spend on medically necessary services. Participants pay their providers Medicaid rates.

19. Health Opportunity Accounts (continued) Once initial allotment is spent, must pay all medical expenses out of pocket until the deductible is reached Then go into regular Medicaid Exempt from HOAs: –Over age 65 –Eligible for medical assistance because of pregnancy –Eligible for medical assistance for 3 months or less

20. If the bill passes… States must implement citizenship & asset transfer changes in 2006 Cost-sharing & benefits fights coming to a legislature near you Lots of work for state advocates in educating state legislators on how the optional provisions will affect people on Medicaid

21. Coming Attractions Medicaid Commission meeting this year; report due December 2006 Presidents 2007 budget comes out early February Federal fiscal outlook remains dim We live to fight another day