To Expand or Not to Expand

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To Expand or Not to ExpandThe Facts on Colorado’s Medicaid ExpansionMichele LueckDecember 6, 2012


Today’s Discussion3


Three Takeaways• Federal Incentives: Financial incentives may nothave as much muscle as previously thought(think fiscal cliff).• Fiscal Impact: Expect discussion on long-termimpact to state.• Political Calculus: Multiple stakeholders, multipleinterests and a reelection bid complicate matters.4


What We Know Right Now• Governor’s office iswatching and waiting.• Senator Aguilar willmost likely run the bill.• Long-term sustainabilityis central concern.5


What’s Making the Headlines?The Denver Post, Nov. 27, 20126


How We Got Here


The Surprise of theSupreme Court Ruling• States mayopt out of theMedicaidExpansion• Cornerstone ofthe AffordableCare Act


How States are Leaning• Source: Center on Budget and Policy Priorities.November 30, 20129


The Populationin Question


Colorado, Post-Health Care Reform= 10,000IndividualsUninsured Without After HR HR Implementation360,000EmployerSponsoredInsurance160,000900,000Medicaid/CHP+130,000IndividualPurchase220,00011


An Example of the Issues:Adults Without Dependent Children, 101-133% FPL12


A Few Terms You’ll Hear About in 2013• The Woodwork orWelcome Mat Effect:• People eligible for Medicaidbut never enrolled• See promotions, become aware• Enroll in Medicaid• The Crowd Out Effect:• People who fall into new Medicaideligibility category• But they have insurance already• Opt out of private and into Medicaid13


Federal Incentives


Are Subsidies Negotiable in Fiscal Cliff Debate?'Fiscal Cliff' Debate HitsAirwaves: Varied Interest GroupsLaunch Campaigns to Sway KeyMembers of CongressImage credit: Carolyn Kaster/AP PhotoBoehner Wants ‘Obamacare’in Fiscal Cliff Negotiations


How Many of Us Could Benefit?•Percentage of the Nonelderly Population With Income Up to Four Times the PovertylevelWho Were Uninsured or Purchasing Individual Coverage, 2010http://healthreform.kff.org/coverage-expansion-map.aspx17


Families and Subsidies• Up to 133% FPL:• 2% of income as healthpremium• Protection from out ofpocket costs:• Buy a lower costs plan• Protects individual byreducing cost sharing to 6%18


Costs and Savingsto Colorado


Modeling Cost is a Complicated ExerciseWho is the new population?How quickly will they enroll?Impact of Crowd Out?Impact of Welcome Mat?Will they use services in same way?Will there be lots of new servicesin first year?Will they “settle down” over time?Should we factor in cost savingsfrom other initiatives?


Colorado Nuances: “The Funds Split”Reduction in DSHPaymentsWhat happens toprovider fee?More patients enrolledand reimbursedthrough MK; LessUncompensated Care.


So How Much Will this Cost?• $858M over next 10 years*• Colorado’s costTerm to know:Offset: savings realized in other placesthat lower this number• With offsets: $581M*• Colorado’s revised Cost* “The Cost and Coverage Implications of the ACA Medicaid Expansion: National and State-by-State Analysis” Kaiser FamilyFoundation and Urban Institute, November 201222


The Debate Will Center Over the “Out Years”YearFMAP for newly eligibleadults (up to 133% of FPL)2014 100%2015 100%2016 100%2017 95%2018 94%2019 93%2020 and beyond 90%Source: Kaiser Family Foundation23


Medicaid Caseload Grows; Per-Capita Costs FlatMedicaid Caseload, 2006-07 – 2012-13Per-Capita Costs, 2006-07 – 2012-13$7,000$6,000$5,000$4,000$5,223$4,832$3,000$2,000$1,000$-2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13Source: JBC State Budget Briefing, HCPF, December 15, 201124


A Final Thought in the Fiscal Equation• Will some Colorado programs still benecessary?• Cover Colorado• Colorado Indigent Care Program• Mental health services at Departmentof Human Services• Provider Fee?• Child Health Plan Plus?25


Political Calculus


The CHI Take: Cautious but Anticipatory• Colorado’s history supporting Medicaidexpansions.• Colorado Health Care Affordability Act• Who makes decisions?“We remain committed to doingeverything we can to improve thehealth and health care of allColoradans.”Gov. John Hickenlooper, 6/28/1227


Hospitals: Recalibrating Revenue StreamsReduction inDSH PaymentsMore patients enrolled andreimbursed through MK; LessUncompensated Care


Governors and State Government• Questions on the table:• Partial expansion• Experience with AWDC• Political will and priority?• Re-election looms• How will governor work with democraticlegislature?Personal ResponsibilityIndividual Mandates29


Federal Government• Dollars and Sense• If the average person:• Does not enroll in MK and becomes uninsured:• Federal spending saves $6K (in 2022)• Does not enroll in MK and goes to Exchange• Federal spending increases $3K (in 2022)30


Today’s Discussion31


Three Takeaways• Federal Incentives: Financial incentives may nothave as much muscle as previously thought(think fiscal cliff).• Fiscal Impact: Expect discussion on long-termimpact to state.• Political Calculus: Multiple stakeholders, multipleinterests and a reelection bid complicate matters.32


Michele Luecklueckm@coloradohealthinstitute.org

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