Tag Archives: Rob Damler

Medicaid to pay more Medicare Part B costs

McCulla-IanPreliminary estimates suggest that Medicare Part B premiums and deductibles will increase for calendar year 2016. As a result, state Medicaid agencies may see sizeable increases in the Medicare Part B premiums and cost-sharing expenditures they pay on behalf of some dual eligibles. This NPR Marketplace article quotes Milliman’s Rob Damler discussing the disproportionate percentage of beneficiaries paying Part B’s costs.

Here is an excerpt:

…Two things tend to happen every year. First, Social Security benefits rise. Second, premiums for Medicare Part B — which covers inpatient treatment, the cost of doctors and certain drugs — also rise. But what makes this such an unusual year is that Social Security benefits are flat for 2016.

Robert Damler, an actuary with the consultant group Milliman, said that means a bunch of people by law are protected, or held harmless, from paying more for that Part B coverage.

“Seventy percent of the people will have zero percent increase, and then 30 percent of the population will have a 52 percent increase,” he said.

Given Medicare Part B enrollment, that’s like 15 million people picking up the tab for 50 million. Because many of the people facing increases are low-income, state Medicaid offices cover the premium hikes, which this year total $2.1 billion.

In this article, Damler and I explain the effect that several provisions from the Social Security Act are having on the current situation.

Two related requirements of Section 1839 of the Social Security Act have produced the current situation. In accordance with Section 1839, the revenue generated by Part B premiums is required to be 25% of the total cost of the program, which means that premiums rise and fall with the costs of the program, including normal adjustments for inflation. At the same time, another provision in Section 1839, known as the hold-harmless provision, precludes certain Social Security recipients from being required to pay more in Part B premium increases than their cost-of-living adjustment for that year.

Because the cost-of-living increase this year is expected to be 0%, anyone who pays Part B premiums through a deduction to his/her Social Security benefits must also see a commensurate 0% increase to those premiums. This affects about 70% of Medicare Part B beneficiaries. The remaining 30% are facing an increase in those premiums of 52% this year. This group includes higher income individuals who pay income-related premiums, individuals newly enrolled in Medicare Part B, and dual eligibles. Dual eligibles are not covered by the hold-harmless provision because they do not pay their Medicare Part B premiums through a reduction to their Social Security benefits; the premiums are paid on their behalf by Medicaid agencies.

The estimated higher than normal aggregate premium increase this year (15%) is related in part to passage of the Medicare Access and Children’s Health Insurance Program (CHIP) and Reauthorization Act of 2015 (MACRA), which revised some of the terms of Medicare physician reimbursement. In addition, evidence of higher than anticipated Medicare Part B program expenditures in 2014 and an increase in the healthcare cost trends projected by CMS contributed to the estimated increase.

Figure 1 illustrates a high-level estimate of the potential Medicare Part B premium increase that may be incurred by Medicaid programs nationwide. The calendar year 2016 estimated impact was developed from Federal Fiscal Year (FFY) 2013 reported expenditures. Therefore, the estimated increase is relative to a FFY 2013 expenditure basis.

2099HDP_Fig1

Medicaid expansion: A comparison of two states under Section 1115 demonstration waivers

Section 1115 of the Social Security Act gives the Secretary of the U.S. Department of Health and Human Services authority to approve experimental, pilot, or demonstration projects that promote the objectives of Medicaid and the Children’s Health Insurance Program (CHIP). Both Michigan and Indiana opted to use a Section 1115 demonstration waiver to implement their respective programs. While both programs were implemented to provide coverage to parents and childless adults with incomes up to 133% of the federal poverty level (FPL) under a Section 1115 waiver, the programs were implemented using different characteristics. Milliman consultants Christopher Pettit and Rob Damler provide perspective in this article.

ACA implications for home and community-based services

The Patient Protection and Affordable Care Act (ACA) modifies Section 1915(i) of the Social Security Act to help states expand home and community-based services (HCBS) through Medicaid. States exploring this option need to understand the financial implications related to the implementation of Section 1915(i).

Milliman’s Rob Damler and Marlene Howard discuss several features and considerations of the 1915(i) state plan option in their Contingencies article entitled “Medicaid and the ACA.” Here is an excerpt:

One of the most significant modifications to Section 1915(i) was the addition of Section 1915(i)(7), which allowed states to define target populations for the delivery of the HCBS benefit package. This section waives the comparability requirement established in the DRA version of Section 1915(i). The CMS final rule proposed that the parameters for the target populations be defined by “diagnosis, disability, Medicaid eligibility groups, and/or age.”

The waiver of the comparability requirement allowed states to do the following:

• Define multiple target populations for 1915(i) and tailor multiple HCBS packages that could be individually allocated to each population; and
• Vary the amount, duration, and scope of a single 1915(i) service between various target populations.

…The ACA also expanded eligibility for the 1915(i) state plan option to individuals with incomes up to 300 percent of the Supplemental Security Income Federal Benefit Rate. If states choose to use this income eligibility definition for a 1915(i) service package, individuals must meet an institutional level of care as well as the needs-based criteria defined by the state. If states maintain the income eligibility threshold of 150 percent of FPL as established by the DRA, individuals do not have to meet an institutional level of care.

Fixed offer or competitive bid? Choosing the right Medicaid managed care contracting methodology for your state’s needs

Medicaid revenue to risk-based managed care plans has increased significantly in recent years, and there’s now mounting pressure on state Medicaid agencies to deliver quality care and contain costs. Agencies must consider the long-term stability of their Medicaid programs through changes in population, cost trends, and care practices. How Medicaid contracts are awarded to managed care plans can have a major impact on how well they support strategic outcomes and can have unintended consequences if agencies don’t carefully consider their specific markets and regulatory realities. This Medicaid briefing paper authored by Milliman consultants Jeremy Palmer and Rob Damler provides more perspective.

Ikaso Consulting’s Reiko Osaki and Tom Arnold also contributed to the paper.

Gov. Mike Pence highlights Milliman’s Healthy Indiana Plan research

In his recent Wall Street Journal editorial (subscription required), Indiana Gov. Mike Pence cited Milliman studies pertaining to the Healthy Indiana Plan (HIP). HIP is the state’s Medicaid expansion program designed to cover individuals who are uninsured with incomes up to 200% of the federal poverty level (FPL). Here is an excerpt from Gov. Pence’s editorial:

The Healthy Indiana Plan (HIP) now provides health-savings accounts, or HSAs, to nearly 40,000 people and empowers them as health-care consumers. According to a Milliman analysis of HIP and traditional Medicaid claims, 7% fewer HIP members used the emergency room in 2012 compared to traditional Medicaid enrollees.

Another Milliman study showed that 60% of HIP enrollees in 2012 obtained preventive-care services such as annual physicals and flu shots—a rate similar to that of the general commercial marketplace. HIP enrollees choose generic drugs at a much higher rate than people covered by other private insurance plans.

When HIP was first implemented, Milliman’s Rob Damler analyzed patterns of care and pent-up demand in the newly enrolled population; for more on this analysis, reference this 2009 paper. For more Milliman perspective on the Healthy Indiana Plan, click here.

Identifying high-risk members under a Medicaid expansion program: Experience in Indiana

Alternative Benefit Plan (ABP) regulations have created the ability for states to offer benefit plans tailored to the needs of a particular population, such as the Medicaid expansion population. These regulations require exemption for vulnerable populations, including one new exempt population: the “medically frail.” This population includes foster care children and those who meet Social Security disability criteria, but also includes anyone with a serious and complex medical condition or a disabling mental or chronic substance use disorder.

States are seeking a methodology to help them identify the medically frail, one that would be both accurate and administratively efficient. This paper describes a methodology that has been used successfully for identifying a similar population in the Healthy Indiana Plan, a Medicaid expansion program initially authorized in 2008 under 1115 waiver authority.