A New Mexico Vision for
Implementing the Affordable
Care Act
New Mexico Legislative Conference
Santa Fe
January 24, 2013
Alan Weil
Executive Director
National Academy for State Health Policy
Presentation Outline
• State roles in the ACA
• Defining a vision
• Applying the vision to
– Health Insurance Exchange
– Medicaid
– Insurance Regulation
• Putting it all together
What States Have to Get Right
Implementing the ACA
1. Be Strategic with the
Insurance Exchange
2. Regulate the Commercial
Health Insurance Market
Effectively
3. Simplify and Integrate
Eligibility Systems
4. Expand Provider and Health
System Capacity
5. Attend to Benefit Design
6.
7.
8.
9.
Promote Care Coordination
Use Your Data
Pursue Population Health Goals
Engage the Public in Policy
Development and
Implementation
10. Demand Quality and Efficiency
from the Health Care System
Weil, Alan, “State Policymakers’ Priorities for Successful Implementation
of Health Reform,” Portland, ME: NASHP, May 2010.
New Mexico State Scorecard- 2009
2009
Ranking
2007 Ranking
(revised)
OVERALL
42
35
Access
50
50
Prevention & Treatment
50
38
Avoidable Hospital Use & Costs
10
7
Equity
35
43
Healthy Lives
29
18
Source: Commonwealth Fund Scorecard on State Health System Performance,
2009.
Elements of a Vision
•
•
•
•
•
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Triple Aim
Care integration and coordination
Reducing disparities
Expanded and continuous coverage
Patient and consumer engagement
Transparency and information
Triple Aim
• “Improving the U.S. health care system
requires simultaneous pursuit of three aims:
improving the experience of care, improving
the health of populations, and reducing per
capita costs of health care.”
– Donald Berwick
Donald M. Berwick, Thomas W. Nolan and John Whittington.
“The Triple Aim: Care, Health, and Cost.” Health Affairs, May
2008.
Triple Aim
What Is An ACA Health Insurance
Exchange?
• Online marketplace of qualified health plans intended to
simplify and structure health insurance choices for
individuals, families, and small businesses
• Exclusive mechanism for people with incomes between 100
and 400% FPL to apply their federal premium assistance tax
credits towards the cost of insurance coverage
• Only Qualified Health Plans can be offered
• Plans tiered by actuarial value; subsidies tied to lower price
plans
• Separate small business exchange (SHOP)
• Open enrollment begins October 2013, coverage begins
January 2014, and exchange must be financially self
sustaining one year later
Four Ways of Thinking About an
Exchange
Marketplace for
subsidized private
coverage
Continuous
coverage option
alongside Medicaid
and CHIP
Integrated delivery
system alongside
Medicaid and CHIP
Component of an
overall approach to
improving the
health care system
9
What can the Exchange achieve?
•
•
•
•
•
Performance standards
Transparency and data
Consumer choice incentives
Multi-payer payment policies
Continuity of coverage
The ACA & Medicaid: Eligibility
• Simplifies eligibility to be based on modified adjusted
gross income (MAGI) with no asset or resource test
and a standardized income disregard of 5% FPL
• Expands to 133% of the federal poverty level for all
under age 65 without regard to family structure as of
January 1, 2014 (HHS cannot enforce against states
that decline to do so)
• Maintains children’s CHIP and Medicaid eligibility
levels through 2019
The ACA & Medicaid: Benefits &
Access
• Provides all newly-eligible adults with a benchmark
benefit package or benchmark-equivalent that is
based on essential health benefits package
• Increases payments in fee for service and managed
care for primary care services provided by primary
care doctors to 100% of the Medicare payment rates
for 2013 and 2014
The ACA & Medicaid: Financing
• Provides full federal funding (100% FMAP) for
individuals newly eligible for Medicaid for 2014-2016
• FMAP for this group phases down to 90% in 2020
and thereafter
• Full federal financing for the primary care rate
increase described above
• Enhanced federal matching funds available for
various activities such as care coordination, IT
systems improvements, moves out of nursing homes
Estimated Effects of the Medicaid
Expansion for New Mexico
• Medicaid in 2022:
– No ACA: 464,000 enrolled
– ACA, no expansion: 503,000 enrolled
– ACA with expansion: 711,000 enrolled
• With the expansion, the number of uninsured in New
Mexico will be 276,000, while it would have been
565,000 without the ACA. This cuts the number of
uninsured in half.
SOURCE: Holahan, John; Buettgens, Matthew; Caroll, Caitlin;
Dorn, Stan. Urban Institute for the Kaiser Commission on
Medicaid and the Uninsured. The Cost and Coverage
Implications of the ACA Medicaid Expansion: National and
State-by-State Analysis. (2012)
Estimated Effects 2013-2022 (cont.)
• If New Mexico undertakes expansion…
– The state will receive $4.9 billion in new federal
funding.
– State Medicaid costs will increase by 1.6% over
non-expansion Medicaid costs, with an additional
$268 million in state expenditures due to
expansion.
– New Mexico will save $104 million in reduced
uncompensated care costs, bringing net new state
spending to $164 million over this period
SOURCE: Holahan, John; Buettgens, Matthew; Caroll, Caitlin; Dorn,
Stan. Urban Institute for the Kaiser Commission on Medicaid and
the Uninsured. The Cost and Coverage Implications of the ACA
Medicaid Expansion: National and State-by-State Analysis.
What can an expanded Medicaid
achieve?
•
•
•
•
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Integrated eligibility options
Effective outreach
Coordinated provider networks
Aligned payment policy
Platform for medical homes, health homes,
other efforts
• Improved reliance upon quality metrics
The ACA & Insurance Regulation
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Prohibit pre-existing condition exclusions
Require guaranteed issue and renewal
Lifetime limits eliminated
Annual caps eliminated beginning in 2014
Limits on deductibles and out of pocket
maximums
The ACA & Insurance Regulation
• Minimum medical loss ratio
– Rebates to consumers if less than 85% (large
group) or 80% (small group and individual) of
premiums is spent on medical services.
• State-based premium rate reviews
• First dollar coverage for certain preventive
services
• Mental health and substance abuse parity
What Can Effective Insurance
Regulation Achieve?
• Selection of appropriate Essential Health
Benefit plan
• Meaningful rate review
• More effective competition
• Protection of local plans and providers
Statereforum.org is a space for…
• Peer-to-peer learning and discussion
• Exchanging reform ideas
• Posting, organizing, and sharing useful state
documents
• Announcing off-line events and activities
• Spotlighting the keys to successful implementation
• Mapping states’ progress in implementing health
reform
Alan Weil
Executive Director
aweil@nashp.org
www.nashp.org
www.statereforum.com
@nashphealth