ACA and Medicaid: Current Landscape and Future Outlook

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1 ACA and Medicaid: Current Landscape and Future Outlook RPCC Health Policy Forum Washington, DC December 5, 2017 Robin Rudowitz Associate Director, Program on Medicaid and the Uninsured Kaiser Family Foundation

2 Figure 1 The ACA broadened health coverage through Marketplace subsidies and Medicaid. Health Insurance Coverage of the Nonelderly, 2013 Private Non-Group 55% Employer-Sponsored Coverage 7% 23% Medicaid* 15% Uninsured Uninsured by Income 15% 46% 39% >400%FPL 139%-400%FPL Marketplace subsidies 0-138% FPL Medicaid Million Nonelderly 41.3 Million Uninsured *Medicaid also includes other public programs: CHIP, other state programs, Medicare and military-related coverage. The federal poverty level for a family of three in 2013 was $19,530. Numbers may not add to 100% due to rounding. SOURCE: KCMU/Urban Institute analysis of 2014 ASEC Supplement to the CPS.

3 Figure 2 Events over the past year have created uncertainty over the future of ACA and Medicaid coverage. Debate over Affordable Care Act repeal ended with no legislation enacted, but efforts may continue Changes to open enrollment and resources for outreach and consumer assistance may suppress enrollment in the marketplaces 2018 Open Enrollment shortened to 6 weeks in many states 90% reduction in federal funding for advertising 41% reduction in federal navigator grants; varying effects by states and programs Termination of cost-sharing reduction (CSR) payments to insurers contributing to marketplace premium increases Recent Medicaid guidance signals a shift in view of Medicaid s role

4 Figure 3 Signups in 2017 are outpacing 2016, but will it be enough? Renewing Consumers New Consumers 2,781,260 2,137,717 26% 24% 76% 74% Week Week SOURCE: CMS, Weekly Enrollment Snapshots

5 Figure 4 33 states including DC have expanded Medicaid through the ACA. WA OR NV CA AK ID AZ UT MT WY CO NM HI ND SD NE KS OK TX MN WI IA IL MO AR MS LA VT NY MI PA OH IN WV VA KY NC TN SC AL GA FL ME* DC NH CT RI NJ DE MD MA 15.1 million adults in the expansion group in FY2016 Adopted (33 States including DC) Not Adopted (18 States) NOTES: Current status for each state is based on KFF tracking and analysis of state executive activity. *ME adopted the Medicaid expansion through a ballot initiative in November 2017, but has not yet been implemented. WI covers adults up to 100% FPL in Medicaid, but did not adopt the ACA expansion. SOURCE: Status of State Action on the Medicaid Expansion Decision, KFF State Health Facts, updated November 8,

6 Figure 5 Medicaid enrollment continues to slow in FY 2017 and FY 2018; however, states project an uptick in spending in FY Annual Percentage Changes, FY 1998 FY % Total Medicaid Spending Medicaid Enrollment 13.2% 4.7% 10.4% 8.7% 9.3% 6.8% 7.5% 3.2% 0.4% 8.5% 5.6% 7.7% 6.4% 4.3% 3.2% 1.3% 3.8% 5.8% 7.6% 6.6% 9.7% 3.2% 6.8% 10.5% 3.9% 3.5% 5.2% 3.9% -1.9% 0.2% -0.5% 3.1% 7.8% 7.2% 4.8% 2.3% 1.5% 5.3% 2.7% 1.5% Proj. -4.0% NOTE: For FY , enrollment percentage changes are from June to June of each year. FY reflects growth in average monthly enrollment. Spending growth percentages refer to state fiscal year. FY 2018 data are projections based on enacted budgets. SOURCE: Enrollment growth rates for FY are as reported in Medicaid Enrollment June 2013 Data Snapshot, KCMU, January FY are based on KFF analysis of CMS, Medicaid & CHIP Monthly Applications, Eligibility Determinations, and Enrollment Reports, accessed September Historic Medicaid spending growth rates are derived from KCMU Analysis of CMS Form 64 Data. FY data are derived from the KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, October 2017.

7 Figure 6 For FY 2018, states project that a number of factors will contribute to slowing Medicaid enrollment growth and an uptick in spending growth. Slowing Enrollment Growth -Stable economy -Tapering of ACArelated enrollment -Processing delayed eligibility re-determinations Uptick in Spending Growth -Targeted provider rate increases -Rising Rx costs -Rising long-term care costs SOURCE: Kaiser Family Foundation survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, October 2017.

8 Figure 7 There are 42 approved Medicaid waivers in 34 states and 22 pending waivers in 20 states as of November Pending Approved Delivery System Reform Behavioral Health MLTSS Other Targeted Waivers Medicaid Expansion - Work Requirements Eligibility and Enrollment Restrictions Benefit Restrictions, Copays, Healthy Behaviors NOTE: Some states have multiple approved and/or multiple pending waivers, and many waivers are comprehensive and may fall into a few different areas.

9 Figure 8 New waiver approval criteria does not focus on coverage and quality Waiver Approval Criteria: Increase and strengthen overall coverage of lowincome individuals in the state; Increase access to, stabilize and strengthen providers and provider networks available to serve Medicaid and low-income populations in the state; Improve health outcomes for Medicaid and other low-income populations in the state, or Increase the efficiency and quality of care for Medicaid and other low-income populations through invitations to transform service delivery networks. New Criteria: November 2017 Improve access to high-quality, person-centered services that produce positive health outcomes for individuals; Promote efficiencies that ensure Medicaid s sustainability for beneficiaries over the long term; Support coordinated strategies to address certain health determinants that promote upward mobility, greater independence, and improved quality of life among individuals; Strengthen beneficiary engagement in their personal healthcare plan, including incentive structures that promote responsible decision-making; Enhance alignment between Medicaid policies and commercial health insurance products to facilitate smoother beneficiary transition; and Advance innovative delivery system and payment models to strengthen provider network capacity and drive greater value for Medicaid.

10 Figure 9 Medicaid block grants or per capita caps are designed to cap federal spending. Current law: Reflects increases in health care cost, changes in enrollment, and state policy choices Current law Federal Spending Block grant: Does not account for changes in enrollment or changes in health care costs Per capita cap: Does not account for changes in health care costs Federal Cap Year

11 Figure 10 Reducing and capping federal Medicaid funds could: Shift costs and risks to states, beneficiaries, and providers if states restrict eligibility, benefits, and provider payment Lock in past spending patterns If expansion funding is cut, the impact could be even greater for the states that expanded Medicaid Limit states ability to respond to rising health care costs, increases in enrollment due to a recession, or a public health emergency such as the opioid epidemic, HIV, Zika, etc.

12 Figure 11 Key Medicaid challenges in FY 2018 and beyond: What is the trajectory for Medicaid enrollment and spending? Will demographics and health care costs continue to put pressure on Medicaid spending? How and when will Congress reauthorize CHIP? Will Congress renew debate on Medicaid financing? For the expansion? For the whole program through a per capita cap or block grant? With significant uncertainty about Medicaid at the federal level, will states continue to invest in payment and delivery system reforms that may require upfront investments but yield longer-term savings? How will new flexibility through waivers affect Medicaid costs?