Healthcare Town Hall

Arkansas has proposed using Medicaid expansion dollars to provide subsidies so that eligible individuals can purchase health insurance through the exchange. The U.S. Department of Health and Human Services has indicated that it will consider approving such proposals.

The Arkansas proposal has various financial implications, especially with regard to provider reimbursement levels and various aspects of the Affordable Care Act, including the minimum medical loss ratio requirement and the “3Rs” (reinsurance, risk corridors, and risk adjustment). This healthcare reform briefing paper by Rob Damler, “Considerations for Medicaid expansion through health insurance exchange coverage,” examines these key considerations for a state contemplating this approach.

Medicaid Arkansas, HHS, Medicaid, Medicaid expansion, Minimum loss ratios, Rob Damler

Today, there are more than 60 million Americans enrolled in Medicaid—but what is Medicaid and how is it financed? This video explains how Medicaid is funded and how it will change under the Patient Protection and Affordable Care Act (PPACA).

Medicaid Medicaid, Medicaid expansion, Understanding healthcare costs, video

A new article in a Wyoming blog about Medicaid expansion offers a helpful view of the decision facing states. Here is an excerpt from that article:

A report for the Wyoming Department of Health prepared by Milliman, Inc., an actuarial consulting firm, forecasts the added costs of the program at $116 million to $148 million between 2014 and 2020, based on their best estimate of 28,200 new enrollees. The report said the enrollment could be as low as 17,000 and might exceed 44,000. Under the best estimate, Milliman expects about 3,700 “woodwork” cases that the federal government would reimburse at only 57 percent.

In the same report, Milliman notes potential for significant savings. Some current state health programs would be at least partially subsumed under Medicaid, enabling the state to discontinue their funding and save money. But forecasting these savings — frequently called “cost offsets” — is much more difficult than predicting the cost of enrolling new patients in Medicaid.

“Detailed data was available for the Medicaid cost analysis,” said Jill Van Den Bos, a senior consultant at Milliman and the lead author of the study. The researchers used U.S. Census data and claims-data, among other sources, to predict costs.

“But it was harder on the cost-offset side,” Van Den Bos said. Eligibility for some free services offered by the state — such as colorectal cancer screening, and breast and cervical cancer treatment — is set at 250 percent of FPL. But it is difficult to know how many participants in those programs would fall under the eligibility limit of 133 percent of FPL.

“There is no hard data,” Van Den Bos said. “Assuming uniform distribution, it’s about half.” The state might also be able to reduce its bill for funding the Wyoming State Hospital, which took $60 million from the general fund and  “generated only $1.4 million in revenue from all third party payers,” including Medicaid, the report said. But once again, the savings are hard to pin down, since it is unclear how much Medicaid will pay for the indigent — for example, how many days of care per year — until more information arrives from Washington.

“The uber-person who had access to all of the data on Earth would still have a better data for the cost side than the cost-offset side,” Van Den Bos said.

This excerpt gets at two of the complicating factors surrounding this kind of analysis:

• First, a range is important. States want to know their full budget exposure, and thus need 100% enrollment scenario estimates, but also have to account for the behavioral vagaries of other enrollment scenarios.
• Second, the data supporting cost estimates is clearer than the data supporting cost offsets. This is compounded with each state having a unique Medicaid situation and its own local set of programs that may be subsumed by expansion, such as the payments to the Wyoming State Hospital mentioned here.

 
States face a complex decision as they wrestle with whether or not to expand their Medicaid program.

Reform Jill Van Den Bos, Medicaid expansion, Wyoming

Health Plan Week looks at the future of Medicaid managed care plans as states wrestle with the question of whether to expand their Medicaid programs. Here’s an excerpt:

This is the type of interest you’re seeing from Medicaid health plans, whether you’re in a big state like Ohio, or the smallest of states,” [Mlliman's Rob] Damler says, adding that mounting competition in the Medicaid space will push carriers to make their bids as compelling as possible by ensuring they have “a strong provider network, strong quality measures, experienced staff, good contracting.” But more aggressive bidding from larger, well-capitalized carriers could make it difficult for smaller carriers to compete, he adds.

However, a growing interest in quality measures could give some small, local carriers an advantage over much larger entitites. In their RFPs, some states are increasing the amount they will withhold from carriers that don’t hit quality measures, says Damler. While states historically might have withheld one-quarter to one-half percent of their capitation rate, more recent contracts have boosted that percentage to between 1% and 3%, he says.

Medicaid Medicaid expansion, Rob Damler

The Patient Protection and Affordable Care Act (PPACA) provides for an expansion of Medicaid eligibility for individuals who have an annual household income at or below 138% (including the 5% income exclusion) of the federal poverty level (FPL). Recent discussion has turned to individuals who may qualify for Medicaid even though their households have significant Social Security or Supplemental Security Income (SSI).

Using the 2009 American Community Survey (ACS) data published by the U.S. Census Bureau, this paper explores the potential number of individuals receiving Social Security or SSI and other family members within the household who may have been excluded from the Medicaid population expansion analyses because of the differences between defining household income under the public surveys and the modified adjusted gross income (MAGI). The MAGI methodology will be used to determine eligibility for Medicaid and exchange subsidies under the PPACA.

State-by-state results are provided in the appendices to this paper.

UPDATE: Here’s the Managed Care Online story on the analysis.

Reform Medicaid expansion, Paul Houchens, Rob Damler, Social Security

A new analysis looks at the cost of Medicaid expansion in the state of Nebraska and, as might be expected, the numbers are being interpreted a number of different ways. National Public Radio/Kaiser Health News has the story. The unique characteristics of Medicaid in Nebraska are another reminder of the diversity in healthcare costs from one state to another.

This report looks only at Medicaid, which is how it arrives at the cost of between $526 million and $766 million for the state. The cost of uncompensated care has been held up as justification for the state to foot these kinds of costs.

As is so often the case anytime we talk about the cost of care, in addition to considering the specifics it can be helpful to step back and look at the underlying factors driving the healthcare cost trend.

Cost, Medicaid Medicaid expansion, Nebraska, Rob Damler

The Healthy Indiana Plan (HIP) is a Medicaid expansion program that offers perspective on the cost and utilization patterns of the uninsured as they enroll for coverage and access care. What follows is an analysis of the experience data from this program.  

Illustrating cost patterns during initial period of enrollment

The HIP populations also followed a particular pattern of utilization during the initial enrollment period. Figures 7 and 8 show measurements of inpatient, outpatient, pharmacy, and physician expenditures relative to average PMPM costs, first for caretakers and then for non-caretakers (for explanation of these populations, see the full paper). The 100% line measures the average PMPM for the first year of coverage for the population represented.

Figure 7: Caretakers

  Read more…

Medicaid, Reform, Uninsured, Utilization Indiana, Medicaid expansion, Rob Damler