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Medicaid Reform & 1115 Waivers Seema Verma, MPH President & Consultant SVC Inc

Medicaid Reform & 1115 Waivers Seema Verma, MPH President & Consultant SVC Inc

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Medicaid Reform & 1115 WaiversSeema Verma, MPHPresident & ConsultantSVC Inc

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Medicaid 50 Year Anniversary• President Johnson & War on Poverty:

“We want to give the forgotten fifth of our people opportunity not doles..”

• Changing Health Landscape Over 50 Years▫Private Health Insurance Changes

Copays, deductibles, coinsurance, health savings accounts

Managed Care, HMOs▫Medical advances, new pharmaceuticals & technology▫Rising uninsured as health care costs increase

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Pre Affordable Care Act:Patchwork Quilt of Programs

Government Programs Ryan White Care Act Children’s Health Insurance Program- CHIP Medicaid

Low Income Parents 1115 Waivers (childless adults)

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Medicaid Entitlement Program Designed for Vulnerable Populations

▫ Aged, Blind, Disabled, Pregnant Women & Children Financing Mechanism Retroactive coverage, presumptive eligibility Limited cost sharing & enforceability Choice provisions Robust benefits

▫ Results: Health Outcomes- Oregon Study Limited incentives for health improvement Little to no disincentives for undesired behaviors Seek coverage only when sick, in ER rooms Lack of focus on prevention, maintaining health, & preventing

disease Access issues Over-consumption

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State Concerns▫Medicaid Growing Proportion of State

Budgets▫Significant Efforts Around Controlling

Growth Growing use of managed care Restrict enrollment Provider Rates Limited State Flexibility

▫Supreme Court Decision Reluctance to Expand

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Innovating with Medicaid Expansions

•To date 30 states and D.C. have elected to expand Medicaid

•Expansion discussion is different in every state▫Legislative Approval (?)

•Expansions in 5 states through 1115 waivers▫Arkansas, Iowa, Michigan, Indiana, New

Hampshire & Pennsylvania•Efforts in Utah, Tennessee & Wyoming

efforts stalled

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Reform Themes•Platform for Reforming the Program

▫Promoting Self-Sufficiency Not Dependency▫Familiarizing Individuals with Private

Market▫Personal Responsibility▫Improving Health Outcomes▫Push for State Flexibility

• Garner support from local legislators

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1115 Waivers• HHS has broad authority to grant waivers & ACA does not limit its

authority• Requested Waivers:

• Entitlement Reform Through Increased Personal Responsibility• Provide Health Incentive Programs• Disincentives• Benefit Flexibility• Cost-Sharing* (limited flexibilities)• Retroactivity• Cost-Effectiveness• Work Requirement (not approved)• Policies Structured to Encourage Maintenance of Coverage

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$500 Free Preventive

Care

Personal Wellness and Responsibility (POWER) Account

$1,100 individual* & State contributionsControlled by participant to cover initial

medical expenses

• Smoking cessation

• Diabetes care

• Cancer screenings

Key Features: ● High deductible plan paired

with a Health Savings like account

● Comprehensive benefits, but no dental, vision or maternity

● $1,100 deductible paid by POWER account

● Required monthly contributions● No copays, except for non-

urgent use of ER● Enrollment cap● Medicare payment rates

• Physicals

*Individual contribution not to exceed 5% of gross annual household income

Insurance Coverage

$300,000 annual coverage$1 million lifetime coverage

Original Healthy Indiana Plan (HIP) Structure

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Additional Features

•No Retroactive Coverage•Effective date:

▫Must make payment within 60 days to begin coverage

▫Once payment is made, plans changes only for cause

•Plan Choice must be made before payment and at time of application

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Healthy Indiana Plan (HIP) Success

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HIP improves health care utilization

Inappropriate emergency

room use 7% lower than traditional Medicaid

beneficiaries

60% of HIP members receive

preventive care - similar to commercial populations

80% of HIP members

choose generic drugs,

compared to 65% of

commercial populations

HIP results in high member

satisfaction

96% of enrollees

satisfied with HIP coverage

82% of HIP enrollees prefer the HIP design

to copayments in traditional Medicaid

98% would enroll again

HIP promotes personal

responsibility

93% of members make required

Personal Wellness and Responsibility

(POWER) account contributions on time

30% of members ask their healthcare

provider about the cost of services

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HIP 2.0: Three Pathways to Coverage

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• Initial plan selection for all members• Benefits: Comprehensive coverage with enhanced benefits, including vision, dental, bariatric, pharmacy

• Cost sharing:• Monthly POWER account contribution required.• Contribution is 2% of income with a minimum of

$1 per month.• ER copayments only

HIP Plus

• Fall-back for members with income <100% FPL who do not make POWER account contribution

• Benefits: Minimum coverage, no vision or dental coverage

• Cost sharing:• Must pay copayment ranging from $4 to $75 for

doctor visits, hospital stays, and prescriptions

HIP Basic

• Employer plan premium assistance paired with HSA-like account

• Enhanced POWER account to pay for premiums, deductibles and copays in employer-sponsored plans

• Provider reimbursement at commercial rates

HIP Link

Best

Value

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Non-Payment Penalties

Moved from HIP Plus to HIP Basic

Copays for all services

Income

≤100% FPL Dis-enrolled

from HIP*

Locked out for six months**

Income

>100% FPL

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Members remain enrolled in HIP Plus as long as they make POWER account contributions (PACs) and are otherwise eligible

Penalties for members not making the PAC contribution:

*EXCEPTION: Individuals who are medically frail.**EXCEPTIONS: Individuals who are 1) medically frail, 2) living in a domestic violence shelter, and/or 3) in a state-declared disaster area. If an individual locked out of HIP becomes medically frail, he/she should report the change to his/her former health plan to possibly qualify to return to HIP early.

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Emergency Department (ED) Copayment Collection

•HIP features a graduated ED copayment model

•HIP requires non-emergent ED copayments unless: ▫Member calls MCE Nurse-line prior to visit

or▫The visit is a true emergency

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1st non-emergent ED

visit in the benefit period

$8Each

additional non-

emergent ED visit in the benefit

period

$25

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Final Agreement• Nation’s first

▫ Ends traditional Medicaid for Non-Disabled adults▫ 6-Month Lock-Out▫ $25 ER copayment for non-emergency visits▫ Defined contribution premium assistance program▫ Minimum contributions for HIP Plus at all levels of

poverty▫ Two-tiered benefit structure

• Preservation of HIP▫ Lock-out- Consistency With Exchange Policies▫ Effective date▫ Retroactivity▫ Plan changes

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Activity so far…

•Program began same day as announcement

•In the first month since Governor Pence announced HIP 2.0:▫Transitioned 170,000 from Medicaid into

HIP ▫Approx. 297,0000 applications for health

coverage▫70% Participating into HIP Plus

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Approved Demonstration: ArkansasElement DetailEffective Date January 2014

Structure Non-medically frail adults receive premium assistance to enroll in qualified health plans offered on the federal Marketplace.

Benefits Offers the QHP benefits that are certified to be EHB to non-medically frail adults. EPSDT, non-emergency transportation, and free choice of family planning provider are provided as wrap around services.

Cost Sharing State plan copayments are required for individuals over 100% FPL. Waiver amendment requests cost sharing at state plan amounts to be applied to individuals over 50% FPL.

Incentives Waiver amendment requests addition of health savings accounts for members.

Unique feature: Covers all non-medically frail adults through premium assistance in the Marketplace.

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New Hampshire

Element Detail

Effective Date

Approved

Structure • Non-medically frail individuals will have mandatory enrollment in QHPs available on the federal marketplace

• Individuals with access to cost-effective ESI will be mandatorily enrolled in ESI

Benefits QHP benefits with state plan benefit wrap

Cost Sharing State Plan cost sharing

Incentives NA

Unique feature: Requires individuals with access to cost effective ESI to enroll in ESI and mandatorily enrolls non-medically frail individuals in QHPs available on the federal marketplace.

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Approved Demonstration: IowaElement Detail

Effective Date

January 2014

Structure Individuals with income under 100% FPL served through Medicaid Accountable Care Organizations. Individuals with income over 100% FPL enrolled in Marketplace QHPs with premium assistance or ESI.

Benefits Income under 100% FPL: Benefits based on state employee benefits with EHB

Income over 100% FPL: Benefits based on state essential health benefits offered in QHPs.

Offers dental benefits for those who complete periodic dental exams. 1- Year waiver for non-emergency transportation.

Cost Sharing

Premiums required for all individuals with income at 50% FPL or more. Copayments for non-emergency use of ER but waived in year 1.

Incentives Premiums are waived in the subsequent year if beneficiaries complete health targeted healthy behaviors.

Unique feature: Premium payments authorized beginning at 50% FPL. Premiums waived if healthy behaviors completed.

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Approved Demonstration: Michigan

Element Detail

Effective Date

April 2014

Structure Covers the expansion population through the existing Medicaid Managed Care structure

Benefits Medicaid Alternative Benefit Plan based on the ACA’s 10 EHBs.

Cost Sharing

• No copayments for the first six months. Copayments for the next six month period are applied from the State Plan schedule and are based on care utilization in the previous six months.

• Individuals with income over 100% FPL pay a contribution to a health savings-like account of 2% of their household income.

Incentives Cost-sharing is paid into health accounts and can be reduced through completion of targeted healthy behaviors.

Unique feature: 6 month look-back feature for assessing cost-sharing. Cost sharing collected through health accounts instead of by providers. Cost sharing reduced through completion of targeted healthy behaviors.

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Approved Demonstration: PennsylvaniaElement Detail

Effective Date

January 1, 2015

Structure Covers the expansion population through private Medicaid managed care plans.

Benefits Base benchmark plan for newly eligible not specified, pending future State Plan amendment. Will not provide non-emergency transportation services.

Cost Sharing • All demonstration beneficiaries pay state plan copayments in year 1. In year 2 copayments will only be charged for non-emergency use of the ER. Beneficiaries with income over 100% FPL will be subject to monthly premiums of 2% of income.

• State will collect and analyze copay data for individuals under 100% FPL and submit amendment seeking premiums for this group based on average copayment amounts.

Incentives Beneficiaries may reduce their premiums or copayments by completing healthy behaviors in the prior year. Reductions will be evaluated every 6 months. Provides incentives for job search and work related activities.

Unique feature: Premiums for individuals under 100% FPL will be based on average copays assessed in year 1.

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New Waiver Issues

•Work Requirements▫Pennsylvania & Utah▫Administration Perspective▫Welfare Reform▫Oklahoma

•Time Limited Benefits•Cost-Sharing

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Indiana WaiverHIP 2.0 applicants and members referred to existing State workforce training programs and job search resources if:

Unemployed or working less than 20 hours per week AND

Not full-time students

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Notes:SNAP recipients who have already been sent to Gateway to Work will not be

referred again

Not participating in the Gateway to Work program does not impact HIP 2.0 eligibility

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1332 Waivers • ACA allows for 1332 waivers starting in 1/1/2017

▫QHPs, Exchanges, Tax Credits, Cost-Sharing▫Requires State legislation

• Waivers Must: ▫ (1) provide coverage that is at least as

comprehensive ▫ (2) provide coverage and cost sharing protections

against excessive out-of-pocket spending that are at least as affordable as current provisions

▫ (3) provide coverage to at least a comparable number of people

▫ (4) will not increase the federal deficit.

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1332 Waivers

Activity Will Pick-Up After 2016 Election•Coordination with Medicaid/Expansion &

1115 Waivers• Individual & Employer Mandates•Rating Rules•Benefit Design

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Questions

Seema [email protected]

(317) 809-8536