CMSP Stakeholders Briefing Sacramento, California March 28, 2013 Lee D. Kemper Director of Policy & Planning CMSP Governing Board
Meeting Logistics Overview of the Affordable Care Act Medicaid Changes & Expansion Governor s Medi-Cal Expansion Proposal Governor s Health Realignment Proposal Residually Uninsured Characteristics of Medi-Cal Expansion Population Network Readiness for Medi-Cal Expansion Questions & Answers
Meeting Logistics
Purpose of Meeting Structure of the Agenda Table Seating Introduction of Staff Written Meeting Summary PowerPoint Presentations Parking Validation Cell Phones Restrooms & Breaks
Overview of the Affordable Care Act
Requires most U.S. citizens and legal residents to have health insurance. Creates state-based Health Benefit Exchanges for the sale of individual and small business health coverage. Provides premium and cost-sharing credits to individuals/families with income between 133-400% FPL. Requires employers to pay a penalty when their employees receive tax credits for health insurance through an Exchange (exceptions for small employers). Imposes new regulations on health plans in the Exchanges and in the individual and small group markets. Expands Medicaid eligibility to cover single adults under age 65 up to 138% FPL
ACA requires most U.S. citizens and legal residents to have qualifying health coverage or incur a penalty. This requirement is commonly known as the individual mandate. The penalty for those without coverage: Greater of $695 per year up to a maximum of three times that amount ($2,085) per family or 2.5% of household income.
Eligibility limited to U.S. citizens and legal immigrants with incomes between 100-400% FPL Requires verification of income and citizenship Includes legal immigrants who are barred from enrolling in Medicaid during their first five years in the U.S. Employees who are offered coverage by an employer and the employer s plan does not have an actuarial value of at least 60%, or the employee share of the premium exceeds 9.5% of income
Premium Credits: Refundable and advanceable Used to purchase insurance coverage through the Health Benefits Exchange Tied to the second lowest cost SILVER PLAN in the area Individual s contribution to premium limited to percentages of income Premium contributions for those receiving subsidies increase annually
Cost-sharing Subsidies: Cost-sharing subsidies to eligible individuals and families Reduce the cost-sharing amounts and annual cost-sharing limits Have the effect of increasing the actuarial value of the basic benefit plan
Requires employers with 50 or more full-time employees to offer health coverage Assesses a fee of $2,000 per full-time employee on those employers that don t offer coverage and meet certain requirements Exempts employers less than 50 full-time employees from any penalties Requires employers with more than 200 employees to automatically enroll employees into health insurance plans offered by the employer.
ACA authorizes states to establish a Health Benefits Exchange Covered California in California Individuals and small businesses may purchase coverage through the Exchange Eligibility to purchase through the Exchange limited to U.S. citizens and legal immigrants who are not incarcerated
Effective 1/1/2014, the ACA creates an essential health benefits package: comprehensive set of services covers at least 60% of the actuarial value of the covered benefits Limits annual cost-sharing to the current law HSA limits ($5,950/individual and $11,900/family in 2010) At a minimum, the essential health benefits package must be offered by all qualified health benefits plans participating in: Health Exchanges Individual and small group markets outside Exchanges
Rules apply to plans for groups and individuals: Guaranteed issue Premium ratings No lifetime limits on the dollar value of coverage No rescinding coverage, except in cases of fraud No pre-existing condition exclusions for children No annual limits on the dollar value of coverage Requires dependent coverage for children up to age 26 for all individual and group policies Took effect 6 months following enactment of ACA
Medicaid Changes & Expansion
ACA contains numerous provisions that affect Medicaid: Beginning 1/1/2014, a state may expand Medicaid participation for adults under age 65 with incomes at/below 138% FPL For 2014-2016, the federal matching rate for coverage of the expansion population is 100% Federal matching rate gradually declines between 2017 and 2020 In 2020 and thereafter, states bear a 10% share of the cost of health services to the population
States that participate must provide benchmark benefits, including essential health benefits, to the newly eligible population Only U.S. citizens and legal immigrants with more than five years residence in U.S. are eligible for coverage Undocumented immigrants and legal immigrants with less than five years residence in U.S. are ineligible
Beginning 1/1/2014, ACA makes changes to outreach, enrollment processes, and eligibility standards for Medicaid: Simplifies standards used to determine eligibility Streamlines enrollment processes Coordinates with other public entities that will offer subsidized health insurance coverage to low and moderate income persons Enhances outreach activities to encourage participation in health insurance and Medicaid
Beginning 1/1/2013, the ACA increases federal Medicaid payments in fee-for-service and managed care for primary care services provided by primary care doctors to 100% of the Medicare payment rates Requires states to maintain current income eligibility levels for children in Medicaid and the Children s Health Insurance Program (CHIP) until 2019 Increases Medicaid drug rebate percentages and extends the drug rebate to Medicaid managed care plans
Governor s Medi-Cal Expansion Proposal
Governor proposed two alternatives for expansion of Medi-Cal to cover single adults up to 138% FPL State Based Expansion: State would build upon the existing state administered Medi-Cal program and managed care delivery systems Covered benefits for the expansion population are similar to current Medi-Cal benefits, except longterm care
County Based Expansion: Counties would have operational and fiscal responsibility for the Medi-Cal expansion, including: Establishing networks of providers to deliver health care services Setting payment rates for providers Processing claims billed by providers Counties build upon existing LIHP programs Must meet statewide eligibility standards Must cover a minimum benefits package similar to coverage offered by health plans in the Exchange Requires overall federal approval
Governing Board adopted the following principles regarding the Medi-Cal expansion: Medi-Cal expansion should be undertaken in a manner that: Assures the most effective and efficient organization of health care delivery in CMSP counties. Builds upon the existing health care safety-net in CMSP counties, including hospitals, FQHCs, RHCs and other providers that have historically served CMSP and Medi-Cal
Seeks to expand provider participation through payment policies and incentives that encourage participation, particularly for specialty and primary care Minimizes programmatic, financial and legal risks to CMSP counties and the CMSP Governing Board In consideration of these principles, the Medi-Cal expansion should happen within the state system.
Governor s Health Realignment Proposal
Governor proposed that any County Health Realignment savings resulting from the ACA should be redirected to the State: Under State-based expansion: An increase in county programmatic and financial responsibility for child care and other social service programs Under County-based expansion: Counties assume financial responsibility for a share of Medi Cal costs for the expansion population
Following expansion of Medi-Cal to include low income adults, County Health Realignment revenues currently allocated to CMSP services must: Be retained in full by the Governing Board through FY 2013-14 to cover Path2Health and CMSP program costs incurred during and through FY 2013-14 Be retained going forward at $100 million annually to pay for health services to residually uninsured populations For FY 2014-15 and FY 2015-16 freed-up funds should be reinvested in needed rural health and behavioral health infrastructure (estimated at $125 million per year)
No direct costs to the State for the Medi-Cal expansion population of low income adults for 2014, 2015 and 2106 due to 100% federal funding. State costs for expansion population begin in 2017 and are capped at 10% of total costs in 2020 and thereafter. Governor proposes that State costs for ACA-required Medi-Cal changes will be: $188.7 million in 2013-14 $659.6 million in 2014-15 $729.1 million in 2015-16 The Governor s estimates are based on a simulation of the effects of the simplification provisions under the ACA on Medi- Cal retention and caseload. Governor s proposed FY 2013-14 State Budget includes $350 million in for ACA-related costs.
Residually Uninsured
Current Path2Health & CMSP Eligibility Path2Health At or below 100% FPL Aid Code 84 Full scope coverage No Share of Cost (SOC) 6-month enrollment term Meets DRA citizenship & identity status documentation CMSP Above 100% FPL up to 200% FPL Aid Code 85 Full scope coverage Monthly SOC 6-month enrollment term Meets DRA citizenship & identity status documentation CMSP Non-DRA/PRWORA Otherwise Eligible Aid Codes 88 & 89 Full scope coverage May or may not have SOC 6-month enrollment term Does not meet PRWORA status due to < 5 years in US CMSP Undocumented Aid Code 50 Emergency services only coverage May or may not have SOC 2-month enrollment term
Roughly 80% of total current enrollees are in Path2Health These enrollees should convert to Medi-Cal eligibility on 1/1/2014 Roughly 20% of total current enrollees are in CMSP aid codes A portion could convert to Medi-Cal (>100% FPL to 138% FPL) at some point in time A portion could seek coverage from Covered California
Residually uninsured populations will remain a county responsibility: Persons that do not meet DRA Persons that fail to seek or fail to retain coverage through Covered California Undocumented persons Structurally uninsured persons: Homeless Persons with mental illness Persons with substance use disorders Incarcerated in county jails
Characteristics of Medi-Cal Expansion Population
More people with disabilities may qualify for Medi- Cal based solely on their low income status Today, eligibility is based on linkage to disability, either through: Federal Social Security System Medi-Cal disability evaluation People with disabilities who qualify for Medicaid under the Modified Adjusted Gross Income (MAGI) standard may enroll under existing Medicaid rules to obtain better benefit package Long-term care is key difference in California
Across California, this population varies widely in race, ethnicity and family and living situations and includes: single individuals married individuals with and without children individuals living with extended family working people Unemployed people parolees and formerly incarcerated Homeless People with untreated behavioral health conditions
Physical and mental health conditions which can interfere with their daily lives and ability to work Chronic physical conditions, such as high blood pressure, diabetes, asthma, high cholesterol, and arthritis Significant untreated health problems that can result in a heart attack, brain aneurysm, and late stage cancer treatment Mental health conditions, such as depression, anxiety, and bipolar disorder
Avoid seeking care because they cannot afford it Wait until they are in extreme pain or discomfort before seeking care Cannot afford to pay for a doctor visit or prescriptions, including psychiatric medications Stretch out their medications by skipping doses or taking smaller than recommended doses Go without regular preventive care and screenings Forgo care for chronic conditions or follow-up treatments Have limited or no access to mental health treatment, unless their needs are severe
Roughly 155,000 low income single adults up to 138% FPL will become eligible for Medi-Cal Based on FY 2009-10 CMSP paid claims data: 4.3% (4,710) had severe, chronic conditions and cost $85.7 m 9.8% (10,800) had a Medi-Cal Disability Application pending and cost $65.3 m 86% (94,181) received services and cost $178.1m More than 55% of total CMSP costs were due to complex, chronic conditions, disabling conditions, and behavioral health co-morbidities
Network Readiness for Medi-Cal Expansion
The 35 CMSP counties span more than 90,000 square miles, over 60% of the state s geography 21 are considered frontier counties because of their sparse populations and geographic isolation 9 counties have populations at or below 20,000 persons Medical underservice is a continuing challenge for CMSP county residents, who: Travel substantial distances to obtain medical services Face geographic isolation, separation by mountain ranges, and difficult transportation routes to medical services, particularly during long winter months
Two-thirds of CMSP counties are designated as Medically Underserved Areas (MUA) or have Medically Underserved Populations (MUP) based on four variables: Ratio of primary medical care physicians per 1,000 population Infant mortality rate Percentage of the population with incomes below the poverty level Percentage of the population age 65 or over
Five different approaches for Medi-Cal Managed Care in CMSP counties: Partnership Health Plan Tri-County Regional Two Plan: Anthem Blue Cross CalViva Rural Expansion: Anthem Blue Cross California Health & Wellness Plan Central California Alliance for Health Imperial County (pending) Health plans are taking on roughly 350,000 Medi-Cal enrollees
Medi-Cal Managed Care Strategies: CMSP Counties Partnership Health Plan Tri-County Regional Two Plan: Anthem Blue Cross or CalViva Rural Expansion: Anthem Blue Cross or California Health & Wellness Plan Central California Alliance for Health Pending Del Norte Humboldt Lake Lassen Marin Mendocino Modoc Kings Madera Alpine Amador Butte Calaveras Colusa El Dorado Glenn Inyo Mariposa San Benito Imperial Napa Shasta Siskiyou Solano Sonoma Trinity Yolo Mono Nevada Plumas Sierra Sutter Tehama Tuolumne Yuba
Strong health and behavioral health networks are needed, which include: Meaningful healthcare home Care management and support Strong mental health and SUD service access and linkage to primary care Ancillary supports (such as transportation, food vouchers, shelter) Payment rates that incentivize network participation, particularly for specialty care and primary care
CMSP Governing Board s Maintenance of Effort (MOE) contribution for Path2Health is $125 million. Beginning in FY 2014-15, it is projected this amount will be freed up as Path2Health enrollees transition to Medi-Cal coverage. Governing Board supports using freed-up funds for reinvestment in rural health infrastructure. Behavioral health infrastructure needs particular attention: Needs of the low income adult population Serious lack of provider capacity in counties Federal parity requirements
Freed-up Health Realignment funds could be reinvested in a variety of priorities, including: Primary care and specialty care provider network development Mental health and substance use disorder provider network development Health home development by FQHC, RHC and medical group providers Critical access hospital capacity support Care management support for high-need, highservice-utilizing populations Educational loan/forgiveness to support primary care provider development (medical school, Nurse Practitioner and Physician Assistant students)
Summing Up
California is in a time of important change CMSP County context for this change has been presented A range of views will be provided on the challenges and opportunities we face during this time of change These views will inform and educate CMSP stakeholders and the CMSP Governing Board These views will also provide CMSP stakeholders with the opportunity to provide input directly to the Governing Board Today s meeting is the beginning of a continuing conversation over this year and into 2014 and thereafter
Questions & Answers