Medicaid, the ACA, and the State Budget Conundrum. Benjamin D. Sommers, M.D., Ph.D. Harvard T.H. Chan School of Public Health

Similar documents
8.00% 6.00% 4.00% 2.00% 0.00% -2.00% -4.00% -6.00% Remaining Available for All Other General Fund 24.80% Medicaid 17.85% Corrections 8.

Exhibit 1. National Health Expenditures per Capita,

The Economic Outlook. Economic Policy Division

The Economic Outlook. Economic Policy Division

What The U.S. Must Do To Slow Growth In Spending and Prevent a Meltdown of The Healthcare System? Stuart H. Altman

Access to Care in Rural Arizona

State Health Assessment: Findings from the Ohio Medicaid Assessment Survey

Federal Safety Net Big Dollars. FederalSafetyNet.com

Labor Markets and Cost- Growth in Healthcare. Amitabh Chandra HARVARD UNIVERSITY

CBO s January Baseline Sets the Stage. CRFB.org

March 20, An estimate of the incremental effects of the reconciliation proposal, over and above the effects of enacting H.R by itself.

The Federal Budget Now and In the Future THE CONCORD COALITION. presented by Joshua Gordon, Policy Director.

Tax Reform in a Trump World

Citizens of the World Charter Schools Los Angeles FY Preliminary Budget Assumptions

U.S. Infrastructure Market: Will It Jump-Start the Economy? Scott Hazelton Director, Construction Advisory Services May 21, 2009

MEDICAID EXPENDITURES FOR LONG-TERM SERVICES AND SUPPORTS: 2011 UPDATE

Economic Growth in the Trump Economy

STATE OF NEW JERSEY. ASSEMBLY, No ASSEMBLY BUDGET COMMITTEE STATEMENT TO. with committee amendments DATED: DECEMBER 15, 2014

Bob Costello Chief Economist & Vice President American Trucking Associations. Economic & Motor Carrier Industry Update.

Distributional National Accounts: Methods and Estimates for the United States

HEALTH CHECK Kevin Callison, Leslie Muller, Gerry Simons

STATE OF NEW YORK OFFICE OF THE STATE COMPTROLLER 110 STATE STREET ALBANY, NEW YORK September 2015

Pacific Sunwear. 35th Annual Bank of America Consumer Conference

Old Dominion University 2017 Regional Economic Forecast. Strome College of Business

Where We Were. CRFB.org

Wenlin Liu, Senior Economist. Stateof Wyoming. Economic Analysis Division State of Wyoming 1

Annual Meeting of Shareholders May 8, Oyu Tolgoi: world-class asset, development optionality, significant cash flow potential

Economic and Revenue Outlook: March 2016

2010 Credit Suisse Holiday Conference December 7, 2010

2018(?) FARM BILL DISCUSSION

Larry Kessler, Ph.D. Boyd Center for Business & Economic Research University of Tennessee

BALLINGER LAKE GOLF COURSE LEASE AGREEMENT INTRODUCTION

STATE OF NEW YORK OFFICE OF THE STATE COMPTROLLER 110 STATE STREET ALBANY, NEW YORK September 2015

Farm Bill Economics and Expectations

2017 PNG Economic Survey. Rohan Fox (ANU), Stephen Howes (ANU), Nelson Atip Nema (UPNG), Marcel Schröder (UPNG and ANU)

As Good as it Gets. The Aging Expansion Powers On... but for How Much Longer? Andrew J. Nelson Chief Economist USA, Colliers International

The U.S. Economic Outlook

The U. S. Economic Outlook: Robert J. Gordon

the golf industry is feeling pretty good about itself.

Not For Sale. An American Profile: The United States and Its People

Thomas R. Barr, MBA

Bob Costello Chief Economist & Vice President American Trucking Associations. Economic & Motor Carrier Industry Trends. September 10, 2013

OHRIA Ontario Horse Racing Industry Association

United Nations Conference on Trade and Development

EFFECTS OF EXTENDING AND EXPANDING ENERGY-EFFICIENCY TAX DEDUCTION FOR COMMERCIAL BUILDINGS

TAX REFORM AND THE BUDGET

Capital IDEA From Patient to Provider

Public Land Management: Issues & Implications

Market Update. Randy Tinseth Vice President, Marketing Boeing Commercial Airplanes. Copyright 2016 Boeing. All rights reserved.

The U.S. & Global Economic Outlook Greg Ip, U.S. Economics Editor, The Economist Remarks to The American Sportfishing Association

An American Profile: The United States and Its People

Smart Growth, Climate Change and Prosperity Steve Winkelman Chuck Kooshian

Department of Legislative Services 2012 Session

Progress with the Road Investment Strategy

Lisa Quinn Executive Director

Education Committee Economic Background and Issue Review

PRESENTATION TO THE BRITISH COLUMBIA LEGISALTIVE STANDING COMMITTEE ON FINANCE September 26, 2013

Preview. Tables in your paper Mass Transit as alternative to auto California s problems in urban transportation

December 5-8, 2013 Total N= December 4-15, 2013 Uninsured N = 702

THE ECONOMIC, CLIMATE, FISCAL, POWER, AND DEMOGRAPHIC IMPACT OF A NATIONAL FEE-AND- DIVIDEND CARBON TAX

Proposed Sewer & Water Rates. City of Placerville, California February 13, 2018

The U.S. Economy How Serious A Downturn? Nigel Gault Group Managing Director North American Macroeconomic Services

Energy Outlook Global and Domestic Trends and Challenges. Dr. John Caldwell Director of Economics, EEI 1

Carolina Panthers: Changing Gas Station Strategies in Charlotte

Key Issues Affecting the Future of Racing in New Jersey

Friday, May 22, NAR Convention

Attachment Pro Forma Pro Forma Regulatory Statements Revised proposed access arrangement information

Video Lottery/Tourism Promotion

How Capitalism Was Built

THE FUTURE OF SALES TAX REVENUE

1/30/2019 DRAFT. January 31, Item #1 CITIZENS PARTICIPATION

Improving Mobility Without Building More Lanes

A comment on recent events, and...

Congestion Evaluation Best Practices

110 Edgar Martinez Drive South P.O. Box Seattle, WA (206) August 15, 2018

Russia s s Capitalist Revolution: Why Market Reform Succeeded and Democracy Failed

Economics of Highway Spending and Traffic Congestion. Todd Litman Victoria Transport Policy Institute Presented Strong Towns Webinar 3 February 2016

A Primer on Factors Affecting Farmland Values

Report from the Council

Mayor Mike T. Huether March 31, 2016

The US Economic Outlook

More of the Same; Or now for Something Completely Different?

The U.S. Economic Outlook

Measuring Genuine Progress. Chris Stiffler Economist

5. Golf Industry Trends and Developments in the US 6. The US Macro Economy Factors and Impact over Golf Industry

PROGRAM TO SUPPORT INTERNATIONAL, NATIONAL AND METROPOLITAN SPORTING EVENTS PROGRAM. Metropolitan sporting events. Bids for sporting events

IMPACTS OF A REDUCTION IN FISH PRODUCTION FROM SERVICE TROUT MITIGATION HATCHERIES IN THE SOUTHEAST

U.S Cement Outlook IEEE. Ed Sullivan Group VP, Chief Economist

Preview. Second midterm Tables in your paper Mass Transit as alternative to auto California s problems in urban transportation

Antitrust Reminder. August 25, Solar Energy Industries Association 1

U.S. Course Openings & Closures

Appendix A: State-Level Survey Results

The End of Hyper growth: Political and Economic Responses to a Slowing China

Fiscal Impact of SunTrust Park and The Battery Atlanta on Cobb County Executive Summary Sept. 18, 2018

Economic and Real Estate Outlook

Agricultural Outlook: Rebalancing U.S. Agriculture

The 2001 Economic Benefits of Hunting, Fishing and Wildlife Watching in MISSOURI. Prepared by:

Department of Legislative Services Maryland General Assembly 2007 Special Session FISCAL AND POLICY NOTE

Economic Transformation and Recovery in Hong Kong and Singapore

Transition: Changes After Socialism* Leszek Balcerowicz

Transcription:

Medicaid, the ACA, and the State Budget Conundrum Benjamin D. Sommers, M.D., Ph.D. Harvard T.H. Chan School of Public Health July 2015

Status Update So far, 29 states (plus Washington DC) have chosen to expand Medicaid Of remaining 21 states, the camps divide into: Still negotiating: Willing to expand under certain conditions, usually more state control and conservative features Still debating: in legislative discussions. Never. Ever. 2

Medicaid Choices What the governors are saying Source: Sommers & Epstein, 2013 3

Medicaid Choices What the governors are saying Source: Sommers & Epstein, 2013 4

State Budget Concerns Collectively states are spending more on Medicaid than they do on K-12 education. The ACA expansion is the classic gift of a baby elephant....the federal government says, We ll pay for all the hay for the first few years. At any whim [the feds] could just pull the money. So yeah, I m a little gun-shy. Sources: Sommers & Epstein, 2013; PolitiFact 2013 5

ACA & State Budgets States often report the % they spend including federal dollars, which is misleading Medicaid: 22% of state spending 60% paid for by feds currently Nets out to 12% of state-generated revenue For pre-aca eligible, fed gov t pays 50-83% of total Medicaid costs, depending on the state For the ACA newly-eligible, 100% funding until 2016, then down to 90% after 2020 6

Medicaid Costs But Medicaid costs are the fasting growing part of the state budget And Medicaid spending is countercyclical: Enrollment surges when economy stalls, just when tax revenue craters 7

Medicaid Costs But Medicaid costs are the fasting growing part of the state budget And Medicaid spending is countercyclical: Enrollment surges when economy stalls, just when tax revenue craters Feds have twice increased the match rate to help states during recessions, and once (1981) cut it. Costs have grown rapidly primarily because of enrollment growth. Per person costs have grown slower in Medicaid than for other types of insurance. Source: Holahan & Yemane 2009 8

ACA & the Woodwork Effect ACA pays 90-100% of newly-eligible enrollees in Medicaid States still pay traditional match on those eligible under old rules Millions of these currently-eligible individuals may come out of the woodwork under the ACA 9

The Woodwork Effect: Medicaid-Eligible but Uninsured > 5% 4% - 5% 3% - 4% 2% - 3% 2% National Total = 3.8% (9.1 million people) Source: Sommers & Epstein, 2011 10

ACA & States: The Bottom Line Federally-subsidized expansion will offset state spending on uncompensated care Increase in effective match rate for some Medicaid enrollees pregnant women, medically needy Estimated net effect if all 50 expand: $130B in state savings over 5 years Sources: Dorn & Buettgens 2010; Bachrach SHADAC 2015 11

Medicaid and Cost Growth While ACA expansion is not a leading threat to most state budgets, other budgetary concerns are quite real: Costs for pre-aca eligible individuals with significant medical complexity and LTC needs Rapid increase in federal expenditures on Medicaid under the ACA 12

Total Medicaid Spending Medicaid Expenditures, 2014 Dollars, in Billions $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Total Expenditures (State and Federal) Source: Iglehart & Sommers NEJM 2015

Enrollment vs. Per Capita Costs Enrollment, in Millions 70 60 50 40 30 20 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 Spending per Enrollee, in 2014 Dollars $2,000 10 $1,000 0 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 $0 Enrollment Spending Per Enrollee Source: Iglehart & Sommers NEJM 2015

Enrollment versus Costs Source: Kaiser Commission (2015) using 2011 MSIS data 15

Costs: Policy Options Managed Care: Evidence that it saves money is equivocal, but states are optimistic Cutting benefits or requiring cost-sharing Cutting provider reimbursement Payment reform and care delivery redesign, especially for high-cost complex patients State Block Grants: capping total spending and shifting burden to states to save money 16

Costs: Focus on Duals Renewed energy at state and federal level to improve quality and efficiency of care for sickest members ACA created the Duals Office (Medicare-Medicaid Coordination) Overseeing Dual Demonstration Projects Aggressive move by some states to shift duals and disabled into MCOs 17

Physician Participation % US Office-Based Physicians Accepting New Medicaid Patients Source: Decker, Health Affairs (2012) 18

Providers: A Contrarian View Do we need 100% of doctors to take Medicaid? If only 82% of doctors take new privately insured patients, is that a problem? Do we have evidence that provider participation is a problem for beneficiaries? 19

Providers: Access to Care 20

Providers: Access to Care 21

Providers: Access to Care 22

Conclusions Cost pressures in Medicaid are real State opposition to ACA Medicaid expansion cites costs, but main cost burden of ACA is federal State costs still largely driven by pre-aca groups, especially people with disabilities and those in LTC Among common cost-control options, enthusiasm for MMC and concerns about provider pay cuts are supported by mixed/weak evidence. Care delivery redesign may be most promising. 23

Other Questions & Comments? Ben Sommers bsommers@hsph.harvard.edu 24