Medicaid - What’s Next?
Opportunities and Crisis
The Arc of Virginia
August 13, 2011
Marty Ford
Director, Public Policy Office
The Arc of the United States
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Affordable Care Act
• Health Care protections and expansions
• Long Term Services and Supports
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Health Care Reform: 2 Laws
• Patient Protection and Affordable Care Act (P.L.
111-148)
• Health Care and Education Affordability
Reconciliation Act (P.L. 111-152)
• “Affordable Care Act”
• http://www.heathcare.gov
– For health insurance information by state
– Comprehensive ACA implementation
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Groundbreaking Legislation
• Expand Coverage and Access to Care
– 32 million uninsured will be covered
• New insurance exchange with premium
sharing subsidies, and cost sharing caps
• Large expansion of Medicaid eligibility
• Significant Insurance Market Reforms
– Fills gaps left by the Americans with
Disabilities Act
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Some Insurance Reforms In Effect
by 2014
• Eliminates pre-existing condition exclusions (in
effect now for age 18 and under)
• Lifetime limits not allowed (now)
• Elimination of annual limits on coverage
• No consideration of health status when calculating
premiums
• Guaranteed issue and renewability
• Much more – very important for people with
disabilities who have found it impossible to get
affordable health coverage
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Inclusion of Long Term Services and
Supports in Health Care Reform
• Two-pronged inclusion of LTSS in health
reform:
– National LTSS insurance program – avoid
impoverishment
– Improve Medicaid – eliminate institutional
bias
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Long Term Services and
Supports in Health Care Reform
 Accomplished:
◦ CLASS Act
◦ Improvements to Medicaid
 Community First Choice Option;
 Improving existing Section 1915(i) option;
 New state balancing incentives;
 Spousal impoverishment protections;
 Extend Money Follows the Person
demonstration;
 Expand Aging and Disability Resource Centers
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Community Living Assistance Services
and Supports (CLASS) Act Plan
 New national LTSS insurance program
 Based on voluntary payment of premiums
 Vesting after 5 years of premium payments
 Work requirement
◦ No exclusions based on pre-existing
conditions
 Benefits eligibility is based on functional
need
◦ Need for assistance with activities of daily living
or equivalent
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CLASS Act Plan, cont.
 Cash benefits for maximum consumer and
family control
 No “means-testing” – income is not considered
◦ No need for lifetime impoverishment
◦ Individual can continue to work
Plan can pay for itself AND take
pressure off the Medicaid program
Important for future of Medicaid
program
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Improving Long Term Services and
Supports in Medicaid
• Community First Choice Option
• Improvements to Section
1915(i) Option
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Community First Choice (CFC)
Option
• New state Medicaid plan option
• Comprehensive home and community based
services for people eligible for an institutional
level of care (nursing home, intermediate care
facility (ICF), or IMD)
• States receive 6 percent additional federal
match for CFC services
• Permanent provision in Medicaid program –
does not “sunset”
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CFC Option, cont.
• Included services and supports:
– Assistance with activities of daily living (ADLs);
instrumental activities of daily living; & healthrelated tasks
– Acquisition, maintenance, and enhancement of
skills
– Back-up systems/mechanisms (beepers, electronic
devices)
– others
• Manner of service provision:
– Hands-on assistance
– Supervision
– Cueing
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CFC Option, cont.
States must:
– provide services in a home or community
setting
– provide consumer-controlled services,
statewide, in the most integrated setting
– establish a comprehensive quality assurance
system using feedback from consumers,
families, providers
Available beginning October 1, 2011 –
waiting for regulations
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Improved Home and Community Based
Services (HCBS) State Plan Option
(Section 1915(i))
• Medicaid 1915(i) Option
– States can provide home and
community based services without a
waiver
– States must establish eligibility that is
less strict than for institutional and
HCBS waiver services – states serve
people who are not eligible for the
state’s HCBS waiver
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Amendments to HCBS Option (Section
1915(i))
ACA improved Section 1915(i) HCBS Medicaid Option:
• States may offer all services that are allowed under the HCBS
waiver
• Income eligibility criteria aligned with other HCBS programs
• States may target certain populations in need for 5 years
• Repeals authority to cap the number of eligible people; to
keep waiting lists; and to limit services to certain geographic
areas
CMS letter to State Medicaid Directors: August 6, 2010
http://www.cms.gov/smdl/downloads/SMD10015.pdf
Effective Date: October1, 2010
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Implementation
• CLASS Act Plan
• Department of Health and Human Services
………………….
• States have many choices
– Community First Choice Option
– Section 1915(i) option
– Other new Medicaid provisions
• Work with Governors, State Legislatures
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ACA Implementation
•
•
•
•
Phased in over several years
Regulations arriving at a steady pace
Numerous threats to the ACA
Must continue to be vigilant and advocate
to protect these advances for people with
disabilities
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Implications of Budget
Control Act of 2011
What impact will the newly enacted Budget
Control Act of 2011 have on people with
intellectual and developmental
disabilities and their families?
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Budget Control Act Basics
• Enacted August 2, 2011.
• Three step process to raise the debt
ceiling by up to $2.8 trillion and
reduce the deficit by $2.3 trillion
over 10 years.
• At least $840 billion will be cut
from discretionary programs
• Revenues are not explicitly
included, although not prohibited.
• No details about which programs
will be cut or by how much.
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Budget Control Act Basics,
cont.
• Specific program cuts to be determined in the
upcoming months.
• Cuts will be made through the regular
Appropriations Committee process and working
with the new “super committee.”
• Disability-related programs are vulnerable or
protected in different steps.
• Advocacy to protect the programs that are
important to people with disabilities will need to
continue through the end of the year.
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Balanced Budget Amendment
Legislation
• The Budget Control Act requires the House and
Senate to vote by December 31 on a balanced
budget amendment to the U.S. Constitution
• The amendment would require an annual
balanced budget
• Balanced budget amendment requires approval
by 2/3 of House and Senate and 3/5 of states
• Enactment/failure to enact would not affect
increases in the debt ceiling or the 3 steps of
debt reduction
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Step 1
The Three-Step Budget Control
Process
• The debt ceiling is raised immediately (8/2/11), with additional
increases authorized thru early 2013
• $1 Trillion in deficit reduction, including new discretionary program
caps:
– $840 billion in spending cuts from discretionary programs over a
10 year period (2012-2021). (this amount, plus the net interest equals $1 trillion)
– Cuts balanced between defense and non-defense spending (which
could include important disability-related programs like housing,
education, employment, and transportation) in FY 2012 and 2013.
After that there is a single cap for all discretionary programs.
– Entitlement programs (Medicare, Medicaid, Social Security, and
Supplemental Security Income (SSI)) are protected from cuts in this
step.
• Provides increases in spending for programs to save money:
– new spending for SSA to do more Continuing Disability Reviews
– more spending on stopping fraud and abuse in entitlement
programs
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Step 1 - Discretionary Spending Caps
• Discretionary spending will be cut by at least
$840 billion over 10 years
• Cuts will start at $44 billion (4%) in FY 2012
• Cuts will reach $119 billion (9%) in FY 2021
• The average 10 year cuts are 6.3%
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The Three-Step Budget Control
Process, cont.
Step 2
•
•
Recommendations by a twelve-member bipartisan Congressional “Super
Committee” - the Joint Select Committee on Deficit Reduction.
Congress will cut an additional $1.2 to $1.5 trillion from the federal budget
over 10 years:
– By August 16 - Members to be appointed by Congressional leadership. DONE
– By November 23 – Deadline for the Committee to propose specific spending
cuts.
– The Committee’s plan must get the support of at least 7 of its Members to
be voted on by the full Congress.
– By December 23 - Congress holds an up or down vote, with no amendments
allowed.
• Drastic cuts to important disability-related entitlement and
discretionary programs could be proposed by the Committee
and enacted by Congress at this stage. No protections for
Medicaid, SSI, Social Security, Medicare, or other programs
serving low-income people. New revenues/taxes allowed.
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The Three-Step Budget Control
Process, cont.
• Steps 1 and 2 will be taking place at the same
time this fall.
• For Step 1, Congress will be working on the FY
2012 and 2013 Appropriations for discretionary
funding cuts necessary for the first 2 fiscal years
in the first phase of $1 trillion deficit reduction.
• For Step 2, the Joint Select Committee on Deficit
Reduction will be working on all discretionary
and entitlement programs to develop
recommendations for an additional $1.2 to 1.5
trillion of cuts.
• Advocates will be working on both fronts at once.
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The Three-Step Budget Control
Process, cont.
Step 3 – Only IF the Joint Select Committee fails to
obtain agreement from at least 7 of its Members to
cut $1.2 trillion OR if Congress fails to enact its plan
OR if President vetoes it
• Automatic, across-the-board, spending cuts will be triggered
for FY 2013-2021 sufficient to reach savings of $1.2 trillion.
• Most non-Defense discretionary programs are projected to be
cut by 9 percent.
• Low-income entitlement programs, such as the Medicaid
and SSI programs, are exempted from the automatic,
across-the-board cuts (though 2 percent Medicare provider
cuts are allowed).
• Cuts would take effect in January 2013.
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Joint Select Committee on Deficit
Reduction
• 12 Members of Congress - 6 Democrats and 6
Republicans chosen by Congressional leadership
– 3 each:
–
–
–
–
Senate Majority Leader Harry Reid (D-NV)
Senate Minority Leader Mitch McConnell (R-KY)
House Speaker John Boehner (R-OH)
House Minority Leader Nancy Pelosi (D-CA)
• 2 Co-Chairs appointed by Senator Reid and
Speaker Boehner
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Joint Select Committee on
Deficit Reduction Appointments
Senators
Representatives
• Patty Murray (D-WA)
Co-Chair
• Max Baucus (D-MT)
• John Kerry (D-MA)
• Jon Kyl (R-AZ)
• Rob Portman (R-OH)
• Pat Toomey (R-PA)
• Jeb Hensarling (R-TX)
Co-Chair
• Xavier Becerra (D-CA)
• Dave Camp (R-MI)
• James Clyburn (D-SC)
• Fred Upton (R-MI)
• Chris Van Hollen (D-MD)
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What are Some of the Existing
Proposals to Cut Spending that the
Committee Might Look To?
• Block grant Medicaid
• Program integrity savings of $26 billion from
entitlement programs to curb waste, fraud, and abuse
• Reduce funding for Medicaid administrative costs
• Place dual eligibles in Medicaid managed care
• Eliminate certain state Medicaid taxes (“provider tax”)
• Reduce the Floor on Federal Matching Rates for
Medicaid Services
• $112 billion from using chained CPI for cost of living
adjustments
• Repeal of the CLASS program
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Why is Congress so Concerned
about Spending on Medicaid?
Long Term Trends
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Why is Congress so Concerned
about Spending on Medicaid?
• Rapid growth in number of beneficiaries
due primarily to recession and aging of
the population
• Estimated federal spending on Medicaid
in 2011:
– Acute Care: $155 billion
– Long Term Services and Supports: $71 billion
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1
TOTAL FEDERAL SPENDING IN FY 2010 = $3.5 Trillion
(in Billions)
Mandatory
Discretionary
Spending
Spending
Non
Defense
$666
Medicare
$519
Social
Security
$701
Includes all other
disability-related
programs such as:
education, housing,
employment,
transportation,
research
Defense
$692
Source: Congressional Budget Office,
August 2010 Budget & Economic32
Outlook
Why Revenues Should Be Considered
1)
2)
3)
4)
5)
Bush era tax cuts are a significant contributor to projected deficits (up to
$3.8 trillion over the next decade).
Higher-income people can and should share in the sacrifices needed to
reduce deficits.
Taxes are low both in historical terms and in comparison with other
countries.
A large chunk of federal spending takes place through the tax code. The
federal government spends more than $1 trillion a year on “tax
expenditures” — credits, deductions, and other targeted tax breaks. This
is more than is spent on Social Security each year or on Medicaid and
Medicare combined.
Taking taxes off the table would force devastating cuts in entitlement
programs. To achieve $1.2 trillion in savings over the next ten years (as
the debt limit deal requires) from the spending side alone would require
cutting an average of roughly $110 billion annually, starting in 2013.
Adapted from Center on Budget and Policy Priorities
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And Things Could Get Worse
• $2.5 trillion cut called a “down payment” on
the federal debt
• Some still calling for a total of $4 trillion
spending cut over 10 years:
• Several Members of Congress
• President Obama’s Fiscal Commission
• Credit rating agencies
• A dangerous precedent has been set for raising
the debt ceiling in the future
• applying a dollar-for-dollar standard would
require trillions of dollars in additional cuts on top
of the massive cuts already enacted
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What Should The Arc Do?
• Advocate, advocate, advocate
• Personal contacts and stories, letters to editors
• Our messages:
• The budget cannot be balanced on the backs of people with
disabilities
• Revenues must be part of the solution
• Deep cuts in Medicaid cannot be tolerated
•Our Campaign:
See: http://www.thearc.org/page.aspx?pid=3232
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Virginia Congressional
Delegation
Senate
Mark Warner (D) - Banking, Housing, and Urban Affairs; Budget; Commerce, Science & Transp;
Jim Webb (D) - Armed Services; Foreign Relations; Joint Economic; Veterans' Affairs
House
Rob Wittman (R-1st) - Armed Services; Natural Resources
Scott Rigell (R-2nd) - Armed Services; Homeland Security; Science, Space and Technology
Robert C. Scott (D-3rd) - Education and the Workforce; Judiciary
J. Randy Forbes (R-4th) - Armed Services; Judiciary
Robert Hurt (R-5th) - Financial Services
Robert W. Goodlatte (R-6th) – Agriculture; Education and the Workforce; Judiciary
Eric Cantor (R-7th) – Majority Leader
James P. Moran (D-8th) - Appropriations
Morgan Griffith (R-9th) - Energy and Commerce
Frank R. Wolf (R-10th) - Appropriations
Gerald E. Connolly (D-11th) - Foreign Affairs; Oversight and Government Reform
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