Medicaid Update 2013
John J. Wernert, MD
President, Professional Development Associates, LLC
Medical Director, Medical Management
Wishard Health System
Market Forces in U.S. Healthcare
2012
 Broken FFS model = “sick-care” system
 ACA has completely changed the landscape
 ACO’s shift financial risk back to providers
 Price and Quality Transparency
 Technology – collect and share critical data
 Leading Health Plans transforming from
“insurance carriers” to “health and wellness
organizations.”
 Medicaid has become the platform for
expansion of Government Health Insurance
Indiana Medicaid Enrollees 2006 - 2010
Medicaid Expenditures in Indiana; 2006 - 2010
2011 Indiana Expenditures
Medicaid Spending per group:
Indiana Medicaid 2012
 $6 B program – Indiana pays $1.5B
 1.1 million Hoosiers on the program




695,962 in Hoosier Healthwise (3 MCE’s)
33,890 in Care Select
41,645 in Healthy Indiana Plan
268,296 in Fee for Service
History of Indiana Medicaid
Indiana Health Coverage Programs
(IHCP)
Hoosier Healthwise
(began 1994)
Care Select
(began 2007)
Other
(Traditional, 590, etc.)
RBMC
(State contracts
with MCOs)
PCCM
(State Contracts
with CMOs)
Fee-for-Service
(FFS)
Maximus, MDwise,
Wellpoint,
and MHS
Maximus, MDwise,
ADVANTAGE Health
Solutions, and
EDS
EDS - Claims
ADVANTAGE Health
Solutions - PA
Three NATIONAL trends in Medicaid suggest
that urgent attention is warranted:

1) Total Medicaid spending on the rise, crushing state budgets



2) Growing Enrollment and Expansion coming



Provider reimbursement cuts
Benefit restrictions
Potentially add 60 million enrollees nationally
Indiana projections – additional 360,000 to 1.2 m current
3) Quality and Access to Care for Recipients falling further behind
commercial

The State of Healthcare NCQA 2007 - 2010 Study - reported that Medicaid lags the
commercial sector in every care effectiveness and patient satisfaction measure - in
some cases, the quality of care provided to Medicaid enrollees is as much as 30
percent below that provided to commercial enrollees.
In Medicaid,
the 20/80 has become the 5/50
 In Medicaid, the elderly (NH) and adults with
disabilities make up only 25% of the
beneficiaries, but account for 80 % of the cost
 5% of this group account for 50% of overall
Medicaid costs
 45% of those with 3 or more chronic
conditions account for 75% of costs
Long Term Care Insurance
 About 60 percent of individuals over age 65 will require at least




some type of long-term care services during their lifetime.
About 40% of those receiving long-term care today are between
18 and 64.
Premiums have risen dramatically in recent years even for
existing policy holders.
Coverage costs can be expensive, especially when consumers
wait until retirement age to purchase LTC coverage.
Don’t count on the Government !
 Obama Administration announces HHS Will Not Implement
CLASS Long-Term Care Insurance Plan – Oct 2011
 More Elderly will have no choice but to exhaust their
personal resources and apply for Medicaid
Medicaid already does a lot!





Covers 60 million Americans
40% of all births
30% of all children
40% of all long-term care services
Time to shed it’s coverage roots in the
welfare system and absorb the
enrollment of millions of moderate
income Americans, many elderly
What happens with the Expansion in
January 2014?
 New floor for MK eligibility at 138% FPL
 Income test based on Modified AGI (No asset
test)
 Extends MK coverage to most adults age 18
– 64 below 138% FPL
 CHIP children below 38% transition to MK
 Individuals and families between 138% and
400% of FPL eligible for subsidized coverage
through state exchanges
Benefit Packages for Expansion
Populations:
 Below 138% FPL receive full MK benefit
package (mandatory plus state optional)
 Newly eligible adults above 138% FPL
receive a benchmark benefit package
 Must meet essential benefits in Health
Exchanges
 Means State MK plans will need to operate at
least 2 benefits for adults:


One like traditional Medicaid
Another like “employer” plan
Federal Subsidies of State Exchanges
 Starting in 2014, individuals and families
below 400% of FPL eligible for federal
subsidies to buy insurance in exchanges
 Premium subsidies roughly $5k - $6K/person
 Premium credits on sliding scale of income
 Out-of-pocket cost sharing also capped.


$5,950 for individuals
$11,900 for families
Crowd Out
 Employers and individuals dropping private
coverage in favor of taxpayer subsidies
 CBO assumes 70% of new enrollees are from
uninsured and 30% from private insured
 Crowd out in state exchanges likely much
higher, especially in 2016-17
 Employer-sponsored insurance markets
expected to shrink, replaced by Exchange
market and Medicaid
If Expansion goes forward;
 Expected to cover about 16 M more people
 100% federal funded from 2014 to 2016
 Coverage range from 90 to 95% from 2017 to
2019
 90% federal funded from 2020 onwards
 Indiana expected to receive more than $1 B a
year additional federal funding
The Future of Medicaid?






Expanded Federal control of program
Enrollment will grow substantially
Benefit structure will tighten (HIP-like)
Certain services will be denied
Co-pays will be added as a disincentive
Provider reimbursement more like Medicare
fee schedule
 Systems will want these patients
 Platform for National Health Insurance?