Bo Ryall
President and CEO
Arkansas Hospital Association
October 22, 2014
Arkansas Health Care Payment
Improvement Initiative
The Arkansas Health
Insurance Marketplace
State vs. Partnership Models
State-Based Exchange
Partnership Exchange
Federal
Functions
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Data hub
Rate stabilization
Core State
Functions
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Licensing and solvency
Rate and form review
Consumer complaints
Market conduct
Eligibility and enrollment, along with
required I.T. infrastructure
Financial management
Plan management
Consumer assistance
Run risk adjustment and/or
reinsurance
Delegate tax credit calculation and
certain other services to HHS
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Data hub
Rate stabilization
Eligibility and enrollment
Financial management
Licensing and solvency
Rate and form review
Consumer complaints
Market conduct
Plan management
Consumer assistance
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Run reinsurance
Medicaid determination
State
Exchange
Role
State Options
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Source: Manatt Health Solutions
Insurance Companies offering QHPs
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Ambetter of Arkansas
Arkansas Blue Cross Blue Shield
Blue Cross Blue Shield, Multi-State Plan
QC Life and Health
QualChoice Health Insurance
Meanwhile …
• Arkansas Health Insurance Marketplace
Board
– Created by Act 1500 of 2013
– Among other duties, evaluate whether to move
to state-based exchange as early as 2016
Arkansas Private Option
Legislative Party Shift
36
99
2009
58
77
2011
72
63
2013
The Arkansas Health Care
Independence Act of 2013
“Private Option” unique to
Arkansas
Federal $$ pays premiums
for those who would have
been eligible for expanded
Medicaid
CMS approved waiver to
implement Private Option
April 23, 2013
Eligibility for Private Option
• Adults between 19 and 65 with incomes ≤
138% FPL
• Adult parents/caretakers above 17% of FPL
with incomes ≤ 138% FPL
• Not eligible (at least in Year 1)
– Children
– Those who qualify for standard Medicaid under
pre-2014 requirements
Private Option Coverage
• Eligible individuals will choose between at
least 2 “high value” silver plans
– 94% actuarial value if income between 101%
and 138% FPL
– Zero cost sharing if income ≤ 100% FPL
• FFS Medicaid fills in “gap” until QHP
coverage begins
• Plus, 3 months retroactive coverage
Medically Frail Individuals
• Exempt from ABP Enrollment
• May choose “standard” Medicaid in order to
get necessary services such as
– Personal care
– Private duty nursing
– Custodial/long-term nursing home care
• State still receives 100% federal match if a
newly eligible who is “medically frail”
chooses standard Medicaid coverage
Private Option by Age
as of September 30, 2014
• 19 to 44= 67%
• 45 to 65= 33%
Co-pays and Deductibles
• < 100% FPL or $11,670
• No co-pay or deductible in 2014
• Waiver for co-pay on 50-100% FPL in 2015
and 2016
• 100-138% FPL or $11,670-$16,104
• Subject to Medicaid cost-sharing rules
• Maximum of 5% of 100% FPL
• $604 yearly
Hospital Reimbursement Comparison
by Costs
300%
250%
200%
140%
150%
100%
115%
50%
82%
52%
0%
10%
No Medicaid Expansion
Medicaid Expansion
Medicaid Expansion with
Hospital Provider Tax
Private Option Commercial Insurance
Impact of hospital payment cuts since 2010
Billions of Dollars
$250 billion
Affordable Care Act, Middle Class tax Relief Act, American Taxpayer Relief Act,
Sequester
Medicare cuts impacting AR hospitals
Existing Legislative Medicare Cuts (1)
Ten-Year Impact (2012 - 2022)
ACA Cuts (all provider settings)
($1,816,352,100)
Sequestration Cuts (all provider settings)
($400,145,900)
Bad Debt Payment Cuts (all provider settings)
($17,354,600)
Coding Adjustment Cuts (inpatient hospital) and
Radiosurgery Payment Cut (outpatient hospital)
($111,736,900)
Existing Regulatory Medicare Cuts (2)
Ten-Year Impact (2012 - 2022)
Coding Adjustment Cuts (inpatient/home health)
Total Impact of Existing Cuts
Existing Cuts as a Percent of
Total Medicare FFS Revenue **
(10-year summary value)
($220,839,500)
($2,566,429,000)
-10.3%
Medicare Losses Accruing to Arkansas
Hospitals 2011-2022
0.0
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
(50.0)
(100.0)
(150.0)
ACA Cuts
Bad Debt s
(200.0)
Coding Adjustment
2% Sequester
(250.0)
(300.0)
(350.0)
(400.0)
2014
Arkansas
Medicare Reductions
Uncompensated Care
Subtotal Impact
Private Option Impact Est.
Total Impact
$130,000,000
$400,000,000
$530,000,000
$200,000,000
$330,000,000
Impact on Hospitals
January – March, 2014
• 30% Reduction in Uninsured
for inpatient admissions
• 24% Reduction in Uninsured
in the Emergency
Department
• 2% Decrease in Emergency
Department use
Impact on Hospitals
January – July, 2014
• 46% Reduction in Uninsured for
inpatient admissions
• 35% Reduction in Uninsured in
the Emergency Department
• 36% Reduction in Uninsured in
Outpatient Clinic Care
• 1.9% Increase in Emergency
Department use
Reasons to Retain Private Option
• 204,811 uninsured have now
completed enrollment for the
Private Option and more than
211,611 have been deemed eligible.
• A Gallup poll issued in August
showed that the uninsured has
been reduced from 22.5% to 12.4%.
The 10.1% reduction leads the
nation.
Reasons to Retain Private Option
• 81% of those enrolled in the
Private Option have an income
below 100% of the Federal
Poverty Level or a yearly
income of $11,670 or less.
• 67% of those enrolled are
between the ages of 19-44.
Reasons to Retain Private Option
• Social Security Disability
claims have been reduced by
15%.
• $100 million State General
Revenue budget savings
• Healthier population keeps
working
Thank you!
Questions????
Bo Ryall
President and CEO
Arkansas Hospital Association
(501) 224-7878
boryall@arkhospitals.org
www.arkhospitals.org