Setting Capitation Rates in a Changing Medicaid Market

Transcription

1 Setting Capitation Rates in a Changing Medicaid Market Presented by Jenny Gerstorff, FSA, MAAA October 20, 2014

2 Agenda New Populations State Choices Cost Estimation Inherent Risks Risk Mitigation High Need Cohorts 2

3 Population Generalization Race Health Status Marital Status Language Education Employment Majority are white Majority report relatively good health Primarily childless adults 1/3 non-english speaking Nearly 9 out of 10 w/o Degree Minority employed full time White Excellent/ Very Good/ Good Married Non-English No college degree Employed Full-time Graphic from Windems.org 3 October 20, 2014

4 Idaho Coverage Summary 400% Unsubsidized health care when over 400% FPL Subsidized health care when under 400% FPL 300% Federal Poverty Level 200% 100% 185% FPL 133% FPL + 76,000 eligible to purchase health care with tax credit (APTC) 77,000 estimated uncovered 0 Children 0-18 Pregnant Women ~26% FPL Family Adults Single Adults ~80% FPL Aged Blind & Disabled Insurance w/ APTC Medicaid Uncovered 4 October 20, 2014

5 Washington Expansion: Actual to Expected (Jan-Jun) 400, , ,000 Population Size 250, , , ,000 50,000 0 JANUARY FEBRUARY MARCH APRIL MAY JUNE* Projected Actual 5 October 20, 2014

6 Illinois Expansion: Actual to Expected (Jan-Jun) 500, , , ,000 Population Size 300, , , , ,000 50,000 0 JANUARY FEBRUARY MARCH APRIL MAY JUNE Projected Actual 6 October 20, 2014 CC

7 Nevada Expansion: Actual to Expected (July) 200, , , ,000 Population Size 120, ,000 80,000 60,000 40,000 20,000 0 Projected JULY Actual 7 October 20, 2014

8 Audience Input!

9 State Choices 9

10 State Choices pre-expansion 215% 16% 200% 13% Chose to expand Alternative expansion 200% 10% Not expanding (yet) 10 October 20, 2014

11 State Choices post expansion 221% 138% 138% 100% Chose to expand Alternative expansion 138% 0% Not expanding (yet) 11 October 20, 2014

12 Coverage Gap Graphic from StateHealthFacts.org 12 October 20, 2014

13 The Coverage Gap Individuals <138% FPL in Non-Expanding States 24% 8% Currently Eligible for Medicaid (varies by state) Currently in Coverage Gap (<100% FPL) Currently Eligible for Tax Credits ( % FPL) 68% 13 October 20, 2014

14 Audience Input!

15 Cost Estimation All considerations vary by state Available Data Sources Medicaid, other state agencies, population surveys Demographic Differences Age 19-64, predominantly male Benefit Package Alternative benefit plan or state plan Utilization Differences Morbidity, pent-up demand CMS Requirements Consistent with other MC rates 15 October 20, 2014

16 Illinois TANF Disabled (non-ltc) Census Pent up demand (5%) Admin 13% / $40 PMPM 16 October 20, 2014

17 Hawaii 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 $ $ $ $ $ $ $ $ $ $ $ Jul-12 Jan-13 Jul-13 Jan-14 MM PMPM 17 October 20, 2014

18 Washington Medical Care Services ADATSA Pre-SSI Basic Health BCCT 2014 Newly Eligible 18 October 20, 2014

19 Audience Input!

20 RISKS Population behavior Pent-up demand; adverse selection Population morbidity Varies based on how the market is changing Emerging therapies The biggest being hep C drugs 20 October 20, 2014

21 Emerging Therapies Sovaldi Washington Nevada Hawaii Illinois $14 million $9 PMPM in MCOs $80,000 per user $3 million $9 PMPM in MCOs $14 million across Medicaid 137 utilizers $105,000 per user $4 million 46 utilizers $88,000 per user 21 October 20, 2014

22 Emerging Therapies Sovaldi Experience from the first 6 months of expansion Expansion population only (except HI) treatment efficacy CONCERNS compliance Also affecting Medicaid dual and disabled populations Sovaldi is used with other drugs 22 October 20, 2014

23 Audience Input!

24 Risk Mitigation Strategies Risk\Selection adjustment Risk transfer Capitation rate adjustments Risk Corridors State shares gains/ losses outside a threshold Reinsurance Aggregate or individual High cost risk pool 24 October 20, 2014

25 Audience Input!

26 Medically Complex Children Defining Locating Analyzing Multi-step evaluation process 26

27 Medically Complex Children Current Coverage Complications Not well-defined Complexity in population variance Clinical Examples Cystic fibrosis high initial cost/ long duration maintenance Congenital heart disease high initial cost Diabetes long duration maintenance/future complications Private/ Uninsured 33% Medicaid/ CHIP 67% 27

28 Medically Complex Children Benefits & Funding 28

29 Audience Input!

30 LIMITATIONS The information contained in this presentation is intended for informational purposes only. Milliman makes no representations or warranties regarding the contents of this presentation to third parties. Likewise, third parties are instructed that they are to place no reliance upon this report that would result in the creation of any duty or liability under any theory of law by Milliman or its employees to third parties. The views expressed are that of the author and do not represent the collective opinions of Milliman, Inc. QUALIFICATIONS Guidelines issued by the American Academy of Actuaries require actuaries to include their professional qualifications in all actuarial communications. Jennifer L. Gerstorff is a member of the American Academy of Actuaries and meets the qualification standards for performing the analyses contained herein. 30 October 20, 2014