PLEASE NOTE: This is an unedited transcript. Please refer to the video to confirm exact quotes.
SARAH DASH: Hello everybody, and welcome to today’s briefing on understanding what’s next for Medicaid. I’m Sarah Dash and I’m President of the Alliance for Health Policy, it’s a pleasure to be here with you today. For those of you who are not familiar with the Alliance, we are a non-partisan organization dedicated to advancing learning and dialogue on critical health policy issues. I want to say, hello, as well, to those of our audience who are watching us live on CSPAN this afternoon. And to those who are joining us on Twitter using the hashtag #whatsnextformedicaid.
Co-moderating today’s panel with me is Melinda Abrams who is Vice President of Delivery System Reforms at the Commonwealth Fund, and we thank the Fund for their partnership in organizing today’s briefing.
Since Medicaid was created alongside the Medicare program in 1965, it has grown into one of the most far-reaching health programs in our country, both in terms of the number of people it serves as well as their health and life circumstances and the cost of the program. It’s run by the 50 states and territories within federal guidelines and financed by both the states and the federal government. So, while Medicaid police has national implications, it of course, also has major implications for states and their citizens as well. And as we know, major changes to the Medicaid program have been at the forefront of recent health policy discussions, and are included within legislative proposals in both the House and the Senate. And so, today we are going to talk about what those proposals are, how they would work and what they would mean in practice based on our best evidence and projections. And I just want to make a special note here, because while it’s really easy for Medicaid policy to get very wonky, very fast, and as the old kind of saying goes, if you have seen one Medicaid program, you’ve seen one Medicaid program. This obviously has been an issue in our national conversation that does hit home for many people, so I think it just speaks to the need for continued respectful dialogue on the different perspectives that are brought to the Medicaid program, and that’s what the Alliance for Health Policy is all about, and that’s what this briefing is all about. And we are just really pleased to have a terrific panel here today to help us with this discussion.
Let me go ahead and introduce our panel and then I will turn it over to Melinda. Cindy Mann is joining us today, she is a partner at Mannatt, Phelps and Philips. She has been a deputy administrator at the Centers for Medicare and Medicaid Services. She directed the Center for Medicaid and CHIP services at CMS as well. Next, to my left is Josh Archambault. He is a senior fellow at the Foundation for Government Accountability and prior to joining that foundation, he served as Director of the Center for Healthcare Solutions and is a Program Manager for the Middle Cities Initiative at Pioneer Institute. He also served as Legislative Director for Scott Brown in the Massachusetts State Senate and as the Senior Legislative Aide for then governor, Mitt Romney. I already introduced Melinda. So, next to Melinda’s right is Chuck Duarte, who is the CEO at the Community Health Alliance in Reno, Nevada. And before joining CHA, he worked at the University of Nevada School of Medicine and served as the Nevada Medicaid Administrator. Finally, Dr. Richard Frank is the Margaret T. Morris Professor of Health Economics in the Department of Healthcare Policy at Harvard Medical School, and previously served as Deputy Assistant Secretary for Planning and Evaluation at the Department of Health and Human Services, as well as a Special Advisor in the Office of the Secretary. So, welcome to our panel.
Melinda has a few quick opening remarks and then we will turn it over to Cindy.
MELINDA ABRAMS: Thank you, good afternoon everyone, and welcome and many thanks to the Alliance for Health Policy and to the panelists for joining us. I have been asked to just briefly frame the conversation. As Sarah mentioned, Medicaid has taken center stage as we have — as a number of proposals to repeal and replace the Affordable Care Act, have been introduced. And these proposals don’t just change the expansion of the Medicaid program, but actually also address the underlying traditional Medicaid program. So, it’s timely to say, what’s next for Medicaid?
Before we discuss the implications and hear a range of data and perspectives, it’s good to be reminded of some of the basics. The ones that are being projected, by the way, are not actually as good as the ones in your folder. So, if you want to pull out your folder, then you can see some of the numbers. Just to be reminded, it’s a federal and state program. There are federal standards, but states have an enormous amount of — an extensive amount of discretion on the design at administration of the program. It currently covers more than 74 million people and that can be roughly — there are roughly four groups: Infants and children, people of all ages with disabilities, low income seniors, the elderly, and then other adults. Children represent the largest group, but the elderly and the disabled account for the largest proportion of expenditures.
In terms of what it covers, Medicaid covers a broad range of services to meet its very diverse population. There are a number of option services that states can cover such as PT and eye glasses and dental, but it’s really — it’s important to stress that Medicaid covers nearly half of all births, 40% of all children. There is a comprehensive benefit for children, known as EPSDT, which is particularly important for children with disabilities. Medicaid covers long term care, including both nursing home care and community based long-term services and supports. And as of currently, more than half of the long-term care covered by Medicaid is in-home and community based. It’s being spent in the home and in the community, which is enabling seniors and people with disabilities to continue to live independently.
The Commonwealth Fund has, for a number of years, supported research to examine the implications and the effect of Medicaid on people. So, that’s what’s in this next slide, is just some data from some of my colleagues off of our national survey, our bi-annual survey. And essentially, what it shows is that people with Medicaid are less likely than those with private insurance or the uninsured, to skip necessary services or medications due to cost. Other analysis looks at how Medicaid beneficiaries — their satisfaction with their care, and that they rate the care actually fairly highly. But it’s not just Commonwealth Fund data. There was recently — I want to draw your attention — there was recently a paper in the New England Journal of Medicine by Ben Summers and Kate Baker that did a look back and an overview of the implications and the effect of the Medicaid program and basically showed that those with Medicaid had better access to care, more likely to have early detection of disease, more likely to be adhering to their medication regimen, had better management of their chronic condition, and really importantly, and maybe not overly appreciated, is the peace of mind, knowing that they had some coverage when they got sick.
Moving on, another area that we tend to look at is, not just the implications for the people and the state economies, but also the providers. And this is a study that the Commonwealth Fund did with the Kaiser Family Foundation and chose that among these primary care providers, while they were seeing more patients with insurance, most doctors reported no decline in their ability to provide quality care since the Medicaid expansion.
So, at the Commonwealth Fund, our role is to support rigorous analysis, to understand the implications of various health policy propels, and really, we strive to look at the implications at multiple levels. Whether it’s on state economies, on providers, on people or subsets of people. So, this next slide looks at a recent analysis done by Al Dobson and his colleagues, looking at the Medicaid provisions in the House bill — the American Healthcare Act, on hospital finances. What we see is that for all hospitals, particularly those in expansion states, can anticipate over the next ten years, an increase in uncompensated care. So, that’s a treatment or a service for which there is no insurer and the patients are unable to pay. So, anticipate an increase of about 78% over the next ten years. Just to put a number on that, it’s about $114 billion. So, a big increase, but also a lot of money. In the non-expansion states, expect about a 10% increase in uncompensated care, again, over the next ten years. It may sound smaller, but still $17.3 billion. We also have a number of analysis that pull out rural hospitals, look at it by state, look at just the safety net hospitals. So, there is a lot of analysis there for you to turn to.
Another analysis that we released yesterday is looking at the implications of the Better Care Reconciliation Act, the Senate Bill, on state economies and particularly on jobs. And as it says here on the slide, if it were to become laws, we anticipate about 1.46 million jobs would be lost, affecting gross state products as well as the business output. So, really, again, not just looking at this at the national level, but at the state level. And so here is my little plug for some new fact sheets that we’ve pulled together that are — and that are in the back there for Kentucky and Nevada and California, are examples that we have available, but actually there is one for all 50 states. I only covered two pieces, which was the hospital component and the jobs component, because two of our speakers, Cindy Mann and Richard Frank, will look at the implications for federal dollars to the state — that will be Cindy. And then Richard will look at a subset of the population — people with opioid addictions. So, with that — I was just going to echo Sarah’s comment about how we really look forward to hearing a variety of perspectives and having data and evidence guide this conversation. Thank you.
SARAH DASH: Thanks, Melinda. Okay, so we are going to go right down the line. Cindy, Josh, Chuck and Richard. Then we will have time for some Q&A and discussion. Again, for those of you who are just joining us, you can use the hashtag #whatsnextforMedicaid, if you are using Twitter. Go ahead, Cindy.
CINDY MANN: Okay, thank you. It’s great to be here with everybody. I’m going to open it up with a little bit of a short overview of the key changes in the Senate Bill with respect to the Medicaid program. And then really focus my remarks today on the per capita cap provision and its implications for states and the program and the people that the Medicaid program serves. And just want to state my appreciation for the support of the Commonwealth Foundation for its support of our modeling work. And we have looked at state by state impacts of both the House bill and the Senate bill and I will draw on both of those analysis as I go through my presentation this morning.
So, if we want to go to the next slide. Here is an overview of some — there are a variety of different provisions in the Better Care Reconciliation Act that affect Medicaid, but here are some of the key changes: Like the House passed version of the bill, the — nobody quite knows if you are supposed to pronounce the initials or just say them out loud. But BCRA, I will say, converts Medicaid essentially to a capped funding program. Very fundamental change as they are identified in the basic structure of the Medicaid program, and really goes beyond any changes that the ACA had with respect to the Medicaid program. So, would convert starting in 2020 Medicaid to — instead of a program where the financing is jointly shared by the federal government, they federal government’s share would be limited by a per capita cap that builds up to an aggregate cap that I will explain. That would go into effect in 2020. The bill also offers states, instead of doing a per capita cap, a block grant option, but for a limited population. The per capita cap generally applies to virtually all spending and all people in the program. There is some [inaudible] for the caps, but it’s long term care, it’s acute care, it’s — I think the key point is it’s not just the expansion population. People think we are talking about repeal or replace, it must be able the expansion, the financing changes are really pretty much wall to wall in the Medicaid program.
The other big change in the bill is that it would phase out and ultimately eliminate the enhanced federal funding that the Affordable Care Act did make available for states to expand coverage to low income adults. And you will see on the slide, that it phases out beginning in 2021, and has a three year drop down of the match rate, in 2020. Under the ACA it would be at 90%. It goes to 85, 80, 75%, and then in 2020 it goes down to a state’s regular match rate. So, big change in terms of the federal financing. There are also some provisions in the bill that would provide some extra funding for the states that didn’t take up the option to do an expansion. Some funds, two billion dollars of funds, to those states to be shared among the 19 states and also it changes the DSH cuts, so the expansion states continue to experience — or, will experience the DSH cuts that are scheduled to go into effect —
SARAH DASH: DSH means?
CINDY MANN: I’m sorry, thank you. DSH is Disproportionate Share Hospital Payments. It’s a special feature of the Medicaid program which provides funding on a match basis to help provide financing to hospitals at sort of a disproportionate share of either Medicaid or uninsured individuals. ACA cut DSH spending on the theory that we would have more coverage and there would be less uncompensated care, and what the Senate Bill would do is restore those cuts and not put those cuts into effect. They go in effect in September for the non-expansion states, but for the expansion states, they would go into effect. Even after the enhanced match goes away. So, those are some of the major things. I need to get going on this.
So, if you go to the next slide, it just briefly shows you what the reductions are. Alright, follow your booklet. It just shows the year by year reductions that CBO has identified in the BCRA. Overall, and you are probably familiar with the CBO scores, CBO says that the bill would produce a loss of $772 billion over ten years for the Medicaid program and of course, very importantly, by 2026, CBO projects that 15 million people covered by Medicaid would lose that coverage. Would no longer have that coverage.
If you go to the next slide, I want to talk a little bit about how the cap works. I’m not going to spend a lot of time explaining this, this is a wonderful diagram and hopefully it will teach you, but we can have some time during Q&A. But the bottom line is, it’s a per capita cap, meaning the amount of dollars each state gets is based on their historic spending, and then that historic spending is trended forward by a trend rate. And both of those factors are really critical in the terms of understanding the impact to a state’s Medicaid program. What was that spending in the early years? The state is kind of locked into that spending over time, in perpetuity, except for the adjustment. And what you see in this diagram is that there are different trend rates that the bill picks. Medical CPI and Medical CPI plus one, to bring the caps forward year by year until the year 2025. 2025 all groups go down to the CPI, which is a much lower trend rate. That all builds up to an aggregate cap. So, you have your caps for the individual groups of people, you then multiply the cap times the number of people you covered in each of those groups, and that builds up to an aggregate cap, and that is what the state is going to be guided by in terms of its spending. So, if state spending goes over the cap, and it starts to draw down federal dollars beyond the cap, it will have to pay back — there will be a claw back to those federal dollars in the following year, and all of the dollars actually spent over the cap will be 100% financed by the state. So, very different notion from current law, where all financing — all costs that are legitimate Medicaid costs, are shared by the states and the federal government.
If you go to the next slide, this just looks at how those trend rates compare. I won’t go through detail on this, but let me just say, the trend rates are designed intentionally to save the federal government dollars. So, they are pegged at a rate that is intentionally below what it is — the states are expected to spend over the next 10 years. And that is one of the main ways in which the bill achieves some of the savings in the $772 billion score.
If you go to the next slide, please. This one you might want to look at your booklet. This shows the year by year. This is our modeling at Manatt, where we showed the year by year and we have this data by state impact of the caps on — this is just the caps, not the effect of the expansion, so just part of the $772 billion. And what you see here is the federal loss of dollars, but I also want to point out, which is often forgotten, that there will be a state loss of dollars. If a state says, I’m just going to spend to the cap, I’m only going to spend that which qualifies for a federal match, which is what most states do now under federal law, they could spend all their money on healthcare if they wanted to, but they generally say, I will spend what I can spend that qualifies for a match. If they only spend what qualifies for a match under a capped environment, their state spending will also decrease. So, the total impact to the Medicaid program is bigger than the impact of the federal cuts. It’s also the reduction in state dollars. Now, a state doesn’t have to reduce its dollars, it can simply spend state dollars without getting a match. But on the assumption here, that a state will keep below the cap to avoid that claw back and to avoid spending 100% federal dollars, you see the total cuts. The other thing that I would point out on this graph is because the CPI trend rate pops in, in the Senate bill in 2025, you see a very deep — well, a significant jump in the cuts between 2025 and 2026, because of the change in that trend rate. And so, that gives you a sense, and CBO has looked at this also, a sense of how the cuts will grow over time. They will become — they do become deeper every year, but they will become even more — even deeper after that 2026 period.
Let me just try and make one more point here, if you would go to the next slide please. One of the things that we have modeled is the lack of certainty of what life will be like, right? The one thing that we know is that healthcare costs are difficult to predict. But the other thing is that these trend rates are difficult to predict. So, when we have done these analyses, we have taken CBO’s projections of the trend rate. CBO says, I think medical CPI will be 3.7. I think CPI will be 2.4 over the next period of time. It’s as good a projection as anyone might make, so I have no quibbles with their projection. But what we are showing here, is that over the last period of time, and it’s not unique to this period that we’ve looked at, is these trend rates go up and down. They are volatile, so it matters a lot which trend rate Congress picks, but whichever trend rate Congress picks, we need to understand that it is not set in stone, it is a trend rate that will fluctuate. So, one of the things that we did, is we looked at: Well, what if the trend rate isn’t exactly what CBO projects? What if the trend rate, instead of being 3.7 for medical CPI, is just a little lower, it’s 3.2. Half a percentage point lower. And what you see on this, is that the total cuts, just again, due to the cap, would change between 2020 and 2026 from about $267 billion, it would jump to almost $400 billion, just because that trend rate changed and didn’t turn out to be exactly what CBO thought it would be.
So, just to close, I think that’s one of the most important points we want to make about the fundamental change in financing of a cap. Is it — yes, produces significant reductions in federal dollars to states for their Medicaid program, but it also introduces a great deal of uncertainty, and all of that risk of uncertainty of the trend rates or of actual healthcare costs, are going to be borne by the states, by the Medicaid program, and by the beneficiaries. I will stop there.
SARAH DASH: Alright, thank you. Josh Archambault?
JOSH ARCHAMBAULT: Great, thank you so much for the Alliance for Health Policy and the Commonwealth Fund for inviting me. Just for those who aren’t familiar, FGA is a think tank that works in roughly 35 states. We also work here at the federal level in health and welfare reform.
So, I want to start with a poll. Raise your hand if you think based on the media coverage, at the end of the ten-year CBO budget window, we will be spending less money on Medicaid? Raise your hand. Raise your hand if you think we are spending more money at the end of the ten-year budget window. A couple people. Okay. I’m just saying absolute dollar amount. If you compare what we are spending today, versus the future.
So, I think what we have found around the country, is the media coverage has used this language around “cuts”. Massive, severe cuts. But what is interesting is that for years, we have had agreement on the right and left in the health policy world, that we want to slow the rate of growth in healthcare in general. Yet, we have a proposal on the table for the Medicaid program to slow the rate of growth and the sky is falling. Now, there is lots to unpack here, so I want to start a little bit and talk about the status quo. I want to make sure that anybody who is talking about the changes in the Republican bills, has to also talk about the status quo. From the standpoint of, the Medicaid expansion pits the able-bodied adult, who are part of the expansion population, against the traditional Medicaid population. Let me explain that. So, the federal government put extra money toward the Medicaid expansion population to try to get states to expand. The challenge with that, is that if I’m a state budget writer and I have to balance my budget every year, which by the way, they do, unlike here in Washington. They have to – -if they have to find one dollar of savings, determine where they are going to try to take that one dollar of savings, determine where they are going to try to take that one dollar of savings. They have got a few different options. I will tell you, first and foremost, that when it comes to Medicaid, it comes out of the traditional Medicaid population. The elderly, kids, the disabled. Because they lose less federal dollars if they do so. If it doesn’t come out there, then it comes out of education spending, public safety, infrastructure. We can’t spend the same dollar twice. Secondly, as far as the status quo is concerned, we can’t assume that federally we can actually sustain the spending that we have. If you look at GAO, CBO, look at any of these reports historically, when they look at SSI, Medicare and Medicaid, they are going to eat the federal budget alive over the next 50 years. For us to just assume that we can’t do anything for reform, I think is naïve. And it’s also going to hurt people more in the long run. The deeper concern that we have, is that I don’t think the Medicaid program in general has lived up to the promises that we’ve made to the truly needy, before making new promises to the expansion population.
I also would say that the current open-ended structure actually leads to some pretty terrible state behavior. The New York Budget Director for a long time had this somewhat glib statement, saying: If it moves and Medicaid can pay for it, then put it in Medicaid, so that we can pay for it. Things like school services. And if not, depreciate it if we can’t pay it off. At the heart of what that is, is to say, we are going to try to just pull down as many federal dollars as possible. The focus is not about program integrity, coordination of care, health outcomes, and as I’m sure many of you are aware, there have been some questionable — whether it’s the Oregon study or others, looking at questionable outcomes on Medicaid. So, if we have a program that estimated to deliver about 20 to 40 cents of value for anybody, why would we just defend the status quo? Why aren’t we open to trying something new?
I do think that from the state perspective, we work with a lot of state legislators and governors, and when it comes to Medicaid, one of the things we hear in blue, purple and red states alike, is additional flexibility. They want and desperately need additional flexibility on Medicaid. So, what does that mean? Well, it can mean a few different things. The first thing is that the waiver process here in Washington, it does allow for, in theory, a lot a of flexibility. But when you’re a state legislator needing to balance your budget, when you are a governor needing to balance your budget that year, but the average waiver request takes over a year to get approved, it’s not as helpful in the short run. So, giving them the flexibility to grandfather new eligibility changes going forward to do more frequent eligibility checks, to reinstate asset tests, or sorts of things that governors are starting to look at, especially in light of some of the proposals that are on the table here in Congress going forward, of what they want to do to move forward.
I will just say that, on the per capita cap proposal, this used to be bipartisan. President Clinton had a proposal on 1995 along these lines. There have been Democratic governors in the past — now, I live in Boston — former governor Duvall Patrick talked a lot about the need to bend the cost curve or reduce the rate of increase in Medicaid. So, I want to make sure that we are having an informed, intelligent discussion about what the actual changes are, going forward. What is interesting to note, is two things. One, for those that were in support of the ACA, there were over $700 billion in reductions in payment in Medicare. I don’t recall seeing the sky is falling rhetoric around that time. In fact, I went on the Commonwealth Fund website to look. And what I found was, Karen Davis, who I believe was at the Commonwealth Foundation, testifying about that this was positive. In fact, she said, more is needed to have a sustainable program. And she laid out a number of different proposals to do so. But I think it’s just interesting that we have people that want to have it both ways. If we recall, in Welfare reform, in the 1990s, the sky was falling during that reform as well. And what was missing from that discussion, similarly to I think what is missing today, is that there are two components here. There is a tax credit; in Welfare reform, there is the earned income tax credit. In healthcare there is a tax credit, and there is a robust debate to be had about how generous it is, who is it offered to? But in the Medicaid space, when a state decides to move away from Medicaid expansion, there is a tax credit available for those who don’t have employer based insurance. In non-expansion states. For people who aren’t currently qualified for Medicaid. There is a tax credit available. Newly available under the Republican healthcare bill. That should be part of the conversation that we are having about holistically looking at the decisions that people are going to be made. Now, I’m not really interested in kind of closing to poke CBO too much; however, I will make a couple comments here about the coverage losses that we keep hearing about. What we need to understand about the process, and it’s very arcane, and I get why the public doesn’t follow it, but they modeled off of 2016 numbers that had a number of assumptions about how many people were going to sign up in individual market and in Medicaid. They didn’t model off of updated numbers in 2017. So, there are 14 or 15 million lives number that we often hear about people losing Medicaid coverage. It’s not “losing” technically, it’s changes. And there are a couple of things baked in there that are just phantom. For instance, they say that five million of those are people who “lose” coverage in states that they thought would expand Medicaid. Well, if you are not on Medicaid, I’m not sure how you can lose it. They also make some assumptions around the individual mandate that five to seven million people will just decide, from this year to next year, that are on Medicaid now, effectively a free insurance program, that they are just going to stop signing up. I think that there are some reasonable questions to be raised about whether that is a safe assumption going forward.
So, thank you for the opportunity to share that. I look forward to the Q&A, as I suspect I may be sharing a slightly different perspective at times than others on the panel.
SARAH DASH: Great. Thank you, Josh. And I do want — I know most of the people in this room are very familiar with the Medicaid program and the policies, but since we’ve talked about both the expansion population in Medicaid and the per capita cap, I just want to kind of raise a clarifying point as well for those who might be watching on CSPAN, that who was in the Medicaid expansion population, can Cindy or Josh, one of you give that quick primer and overview of that?
CINDY MANN: Sure. Happy to. So, a lot of people, I think, thought before the ACA that poor people got Medicaid, old people get Medicare. And Medicaid grew up over the years, Congress changed it over the years, but there was always a missing group of people. So, parents could get coverage, pregnant women could get coverage, children could get coverage, people with disabilities and elderly, and if you didn’t fit into those boxes, but you were still poor, you actually didn’t qualify for Medicaid and you would have to come and get a waiver and it would be complicated. And so, what the Affordable Care Act did, is said people should be eligible for Medicaid based on income, not based on family circumstances. So, by filling in that gap, what it meant is the expansion group, are parents above the income level that a state was covering at — before the ACA, well below poverty on the average. And so-called childless adults. I always say “so-called” because in Medicaid language, a childless adult is somebody who is not living with a dependent child who is under 18 or 19. So, I’m a parent, but I’m not a childless — but in Medicaid language I would be a childless adult, because my kids are 19 and 20. So, it’s adults that aren’t pregnant, aren’t disabled, aren’t elderly, and up to 138% of the poverty line.
SARAH DASH: Just one more quick clarifying question: So, that 15 million number that was in the CBO score, is that mostly related to that expansion population or is it related to other populations that are covered under Medicaid?
CINDY MANN: Yeah, CBO doesn’t identify at that precisely. We think it’s mostly related to the expansion population, but there will be some implications because of the reductions in the federal funding that we went through, through the cap. But exactly how any given state might address those reductions, I think are somewhat speculative. So, I think it’s mostly the expansion, but it’s the combination, or they don’t pull it out.
JOSH ARCHAMBAULT: A point of note for context. Roughly about 75% of the growth in spending in Medicaid is due to enrollment. It’s not due to underlying healthcare costs or other things going on. So, when we are talking about “savings” going forward, it’s frequently related to enrollment of some sort, because that’s where we’ve seen the explosion both in the expansion and in the non-expansion population.
SARAH DASH: Great thanks. And we will get to the intersection of the Medicaid program, the expansion changes and the tax credits that Josh — that you mentioned. But before we get to that, which I do want to get to in the Q&A, we are going to give our other panelists a chance to share their remarks.
CHARLES DUARTE: Good afternoon everybody, and I want to thank the Alliance and the Commonwealth Fund for having me here. My name is Chuck Duarte. I am the CEO of Community Health Alliance, and by way of background, I wanted to tell you a little bit about myself. Besides running a community health center in Northern Nevada, I spent 15 years running Medicaid programs on the front line as an administrator. Twelve years in Nevada and three years in Hawaii. Before that, I ran community health centers in Hawaii, I started a managed care organization, a non-profit FQCO Managed Care Company in Hawaii.
I worked at hospitals and laboratories and a number of other things and I’m going to start with a poll too. How many of you folks here have ever touched a patient as a professional practitioner? How many? Well I’m actually glad to see a lot of hands going up. That’s wonderful, because one of the things I warned Sarah about, is that I’m going to wear my heart on my sleeve. One of the things that — I’m going to borrow a line, actually, from a friend of mine who is in the audience today, and she said, “You know, you can’t only break heads with data, you’ve got to break hearts when you talk about this. Because there is a patient at the end of your decisions.” And that’s very, very important to keep in mind. So, part of my job is to tell you about that. But also, to tell you about what happened in Nevada, Nevada being a very pivotal state in this discussion, and also as a Medicaid administrator – former administrator, what I see as the tough decisions coming up, for Medicaid administrators and governors throughout the nation.
So, again, my name is Chuck Duarte — if you wouldn’t mind changing the slide. I run Community Health Alliance, it’s a non-profit organization in Northern Nevada. It’s a community health center. We have six health centers in the county of Washoe. We have mobile services, medical, dental and nutritional services, and we provide integrated medical and behavioral health care as well as dental, pharmacy and nutrition programs to our patients.
We serve about 30,000 unduplicated patients a year, 44% of whom who are children. We have 100,000 annual patient visits. 60% of our patients indicate that they are of Hispanic origin. 95% of our patients are below 200% of poverty. Most of them have Medicare, Medicaid or are uninsured.
What I would also like to do, is tell you a little bit about Nevada and give you a snapshot. So, the first thing you have to learn how to do is to say “Nevada”. After me, “Nev-aaaa-da”. It is not “Nev-ah-da.” If you go there and say, “Nev-ah-da” or “Nev-ay-da”, waiters will refuse to serve you and dealers will dealer from the bottom of the deck. So, do not do that. So, Nevada is in the crosshairs, and what people don’t understand about the state is that you think about Las Vegas, and Nevada is really a frontier state. It has two population islands: Las Vegas and Reno. Reno is up in the north and Las Vegas is in the south and they are 500 miles apart. And you can go across the state the other way, and it’s 500 miles of nothing. And so, 14 of the 17 counties in Nevada have about 10% of the population. And so, they have benefitted greatly from the Medicaid expansion. If you look at the population in the snapshot, and this is from Kaiser, 35% of Nevada are low income, about two-thirds indicate that they are obese or overweight. One-third indicate that they have a mental health condition, and 10% have diabetes. In terms of opioid deaths, we are ahead of the national average: 13.8 per 100,000. And we are seventh in terms of the rate of HIV diagnosis.
So, this one slide kind of tells the story — looks like it’s not going to work — okay, so if you folks can go to your handout, hopefully you have this in your handout. But there is a slide that shows you the change in the uninsured rate in Nevada between 2013 and it says, ’17, but it’s actually ’15. So, one year after Governor Brian Sandoval, our governor, implemented the Medicaid expansion in 2014 and the Silver State Health Insurance Exchange, we saw a drop in the uninsured rate within one year from 19% to 11%. Nevada boasted the second highest uninsured rate in the nation behind Texas, at that point. And it changed dramatically with the implementation of the Affordable Care Act. I saw a recent statistic that for non-elderly, Hispanic adults, the uninsured rate has dropped from 34% to 19%, and that’s the slide I was referring to, I’m sorry.
Oh, it’s backwards, sorry. Now we are all right. So, this slide shows you the ACA impact on Medicaid caseloads, and this is from the state budget. And so, you can see where the Medicaid expansion happened in 2014. And between 2014 and November of 2016, caseloads have grown from 330,000 to 630,000. The two groups that Cindy talked about: New eligible parents, parent caretakers and new eligible adults, they represent about 230,900 of the total population. But what is interesting here, is that not only did those two caseloads increase, the eligible, but we saw a pretty substantial increase in the traditional caseloads of aging, blind, disabled and moms and kids. And why did that happen? Primarily because of the woodwork effect. People becoming aware of Medicaid and saying, gosh, I’m eligible for Medicaid and so are my kids. Or, my disabled parent, or siblings is now eligible, or spouse. And so, it was the message that got out there that had these people apply, and they are eligible as a result of the traditional program. And so, any cuts that occur in the state are going to have to — and I will say “cuts” and I will talk about that in a bit, are going to have to come not only from the new eligible, but are going to have to come from the traditional populations.
Okay, I’m going to keep rolling. So, this is our patient population. So, you can see before and after the expansion for children in our practice. In 2013, we had 41% uninsured children, today at 17%. For Medicaid, our children’s enrollment went from 58% to 73%. For adults, it declined from 78% to 22% and Medicaid enrollment went up 300% from 10% to 43%
And this is what I mean about breaking hearts. So, Josh mentioned the “able-bodied”. People that just got on Medicaid because they could. Well, this is one of those so-called able-bodied individuals and this is a story published by Nevada Public Radio about a lady who is a patient of ours. Her name is Angela Siegfried. She is in our Center for Complex Care, which is a specialized community health center for people with complex medical conditions as well as behavioral health problems. She has type 2 diabetes and COPD and here is a quote: “I would just get really sick and end up in hospitals and emergency rooms. They keep me, get a little bit well and send me on my way.” Now, she is a beneficiary of the Medicaid expansion. She worked as a bank loan officer, but became too ill to work and lost her insurance. She now has Medicaid coverage and is spending time with her grandsons. Quote: “I go to soccer games, I go to church, I’m not bedridden. I don’t ever want to be in this life without insurance. What’s going to happen?” Now, she is not a unique individual in this situation. People who are in our program, in our health centers, who are expansion eligible, a lot of them are disabled, but they don’t qualify for SSI. Thirty-five percent of them have a mental health disorder and a concomitant substance use disorder. Many of them have chronic conditions. And so, you can’t tell me that these are all healthy able-bodied people that are going to go right to work when there is a job opportunity, because they struggle already and they do work. So, again, I’m wearing my heart on my sleeve, but that is extremely important to understand about this population, and these are the people that are going to be affected.
The last thing that I want to do, is kind of give you an idea of what Medicaid administrators and governors are going to have to do, and particularly in the state of Nevada. So, the Urban Institute just put out a statistic and there have been some other numbers thrown around in the last two days about the loss of federal revenue to Nevada. By 2022, the Urban Institute estimates that Nevada will lose 1.4 billion in federal Medicaid funding. That would be a 43% reduction. Now, granted, the CPI is going to be there and there is going to be an increase in spending, but 43% reduction in federal funding is going to result in people losing coverage. So, the other complicating factors in Nevada is that we have a relatively high match-rate and so the loss of those federal funds is going to be equally significant. And we have a high expansion population. We also have a high chronic disease burden in a lot of these folks in the expansion population. A lot of mental health disorders, addiction, HIV infection. We have rural and frontier counties which are going to be adversely affected by this. We have a rapidly aging population in Nevada which are going to be ultimately dependent on home based services or nursing home care, and we have a low tax base. So, what are governors going to have to do? Well, I have four dials there that Medicaid directors usually adjust. And I will talk a little bit very quickly about some of these. Because these are the decisions that governors and Medicaid directors are going to have to make. The four buttons are: Eligibility, Services, Utilization, Payments and there is a little control button on the bottom called Managed Care, if you can’t see it.
So, Eligibility. You can do things like put work requirements on, asset limit increases, income limit increases. You can do things like doing more frequent eligibility determinations, all of those things have the net result of knocking people off the program. And that’s fine. But the real big gun on eligibility is you’ve got to take whole populations out of the program all at once. That’s the only way to get the costs out of the system. And so, you’ve got to get rid of the expansion population, and you’ve got to get rid of some of the people involved in the traditional program. And that’s where the cuts are going to come. Or reductions, I should say. Reductions in spending growth. For Services, you can look at eliminating optional services; prescription medication, personal care attendant services, but those have collateral cost impacts on the rest of the program and it’s not necessarily wise to cut those services. You can look at utilization management. Those really just have marginal impacts, and you can’t be willy-nilly about it, because states are required to maintain a reasonable medical necessity criterion when they look at utilization management. So, you can’t just do that. You can look at cutting payments, but of course, CMS is still looking at whether or not cutting payments has an impact on access. And so, you can’t just willy-nilly cut payments. Then there is a little control button on the bottom. It doesn’t do a lot, but people like to press it a lot. It’s called Managed Care. And I can say that from my experience at 15 years in running Medicaid. It’s great, I call it the Pontius Pilot program. Governors can say, I wish my hands of thee, I give it to the managed care programs and be done with it. That’s why they do it. It doesn’t save money, people.
Finally, I would like to say that you know, again, if I’m talking to a patient who is going to lose coverage, I’m going to tell them, I’m going to borrow the line. Don’t worry, it’s not because of cuts, it’s because of reductions in spending growth that you lost your coverage. So, it’s not a problem any more. So, again, I’m sorry to wear my heart on my sleeve and not be totally data driven, but I had to do it. Bye.
SARAH DASH: Well, it sounds like a couple lessons in your language matters, but consequences, whatever they may be are going to happen one way or another. We will keep talking about that, but first we have one last presenter, Richard Frank, and then we will get into a discussion in Q&A, thanks.
RICHARD FRANK: Thanks, I’m happy to be here and I really wish I had Chuck’s social skills. But I will keep going. I’m want you to walk away with four takeaways. First of all, I’m going to really focus on Medicaid and its role as a tool in addressing many types of public health emergencies that we’ve been facing over the last few years. Opioids, Zika, flu, you can throw in diabetes and asthma if you would like. What I’m going to really do is focus on opioids as a tracer condition for this broad set of public health threats and how Medicaid works to give us tools to deal with it. Second is, by expanding access to preventative interventions and treatments, Medicaid is an important part of the arsenal that most governors are using to fight the opioid epidemic, both in terms of addition itself, but also in terms of the mortality consequences of the addiction. Third, the proposals to repeal the Medicaid expansion and then to shift to a per capita cap, will be destructive to state efforts to reign in the opioid epidemic and I’m going to show you a little bit of an illustration of the kinds of pressures that are up on states under these types of arrangements. Then last, the monies that are being proposed, and there is a lot of recognition in various parts of Congress, that certain kinds of public health emergencies are being threatened and the opioids in particular, and that none of the proposals that I’ve seen will come near providing the kinds of money you need to kind of deal with that problem. And you can imagine that, going down the road, for example, we’ve recently seen there is an uptick in methamphetamines that nobody has even started to talk about yet.
So, let me start off with some fun facts about opioid use disorders. The first is that in 2015, we had over 53,000 people die from overdoses in this country, and about 61% or a little over 33,000 were due to opioid use disorders. The overdoes death rates grew at 15% between 2014 and 2015 nationally, but in fact, this is not a new problem. The opioid epidemic has been going on since 1979. It has grown pretty steadily at 9% a year since 1979 with respect to mortality. And because the opioid epidemic and opioid used disorders are concentrated in low income populations, you see the Medicaid expansion population being responsible for treating these folks, and for example, in the states like Maryland that expanded Medicaid, roughly two thirds of the people that died due to an opioid overdose were enrolled in Medicaid.
It turns out that about half the people with an opioid use disorder also abuse or use other types of drugs — methamphetamines, alcohol, cocaine, among others. And a large number of them suffer from chronic diseases, some of them directly related to their opioid use, but some of them not. So, HIV, hepatitis C are two that are, but there are other illnesses such as diabetes and asthma that also tend to accompany opioid use disorders. So, what that means, is that the average amount of spending for a person enrolled in Medicaid who has one of these disorders, is somewhere around $11,000 to $12,000 nationally. To put that into perspective, treating somebody with medication assisted treatment for a year costs $5500. So, that means half of their costs are not directly related to treating that disorder, but related to all sorts of other problems that they have.
So, this is to illustrate the impact that the expansion population has had on prevention efforts. There is a drug called Naloxone, which reverses opioid overdoses. What you see in front of you is a comparison of the growth in the use of Naloxone in the Medicaid program, in expansion states relative to non-expansion states. This deeply increasing one is the expansion states. The modestly increasing one is the non-expansion states. And what we’ve seen is exactly coincidence with these increases, is aggregate data showing that between 2013 and 2014, there was a doubling of the use of Naloxone to reverse overdoses. So, Medicaid is contributing to getting more of the opioid reversal overdose drug into the right hands at the right time in order to sort of save lives. So, really, this graph is a reflection of the number of reversals that have occurred as a result of making the drug more available.
Now, we are going to do some arithmetic. The arithmetic here is not meant to be a precise estimate of the future, but rather to illustrate the kinds of pressures that states are going to be under as they sort of fight this epidemic. So, this is the case of West Virginia. In 2016, West Virginia spent $242 million on substance use disorder treatment in the non-expansion part of Medicaid, okay? The growth rate of utilization of health services has been at about 5.7% a year for the last ten years. And so, if you start to move out the spending along that trajectory, you see that by 2016, you’d expect the main part of the Medicaid program, the non-expansion part of the Medicaid program, West Virginia, to spend about $445 million a year on substance use disorder treatment, okay? If we grow that by the CPIM, which is the more generous of the indexes being proposed in the two health reform proposals, you will see that you come up with about $368 million of spending. Now, the difference there of $77 million and clearly not the whole difference is on the table, but recall that West Virginia has a very high matching rate — 71%, so in fact, over about 55 million of that would be a difference in the federal spending. So, I think this is not meant to do anything, but illustrate the kinds of pressures that states are going to be under.
Let me turn to the expansion population. West Virginia treated about 50,000 in the expansion population for substance use disorder in ’16, okay? And the spending that corresponded to that — those 50,000 people, was about $112 million. Now, if that goes away — and I’m not indexing to the future, those dollars will no longer be available since roughly we are still paying just about 100%. And what does that mean? That means that those people, those 50,000 are going to have to look elsewhere for treatment, and the state is probably going to have to take it on. Just to put that into perspective, let me take that $45 billion that’s been proposed in the Senate to deal with substance use disorder problems, and I’m going to allocate it the way that the 21st Century Cures dollars are allocated, okay? West Virginia would get $61 million a year. Okay? So, right off the bat, you are taking out $112 million, first day, and that’s got to continue to grow, and then the $61 million is every year, and it doesn’t grow. That’s all I have to say.
SARAH DASH: Thank you, everybody, for your very thoughtful presentations. Thank you all. It’s a little cold in here, but we are going to get to the discussion portion. And so, you guys have a couple of options for asking questions. As usual, your green cards, if you want to write a question down, someone will come pick it up for you. There are also two mics, right there, that you can come and ask a question or you can send it in on Twitter at hashtag #whatsnextforMedicaid.
Let me try to pull us back and kind of frame this. It seems like what’s coming across from a lot of the comments are — there are a couple of issues that we are really talking about here. One is: What is the right way to offer coverage to low income people who have — they may be healthy, they may have significant chronic conditions, but they don’t qualify based on the basis of a disability or functional limitations. So, one question is: What is the best way to offer coverage? And then the other is, what’s the best way to offer long term services and supports and finance all of that. So, what I’m curious about is, from the panel’s perspective, what do you see as — what is the fundamental issue here that, you know, needs to be solved? Or issues that needs to be solved when it comes to looking at the Medicaid program? Josh, you mentioned the slowing the growth rate and spending, which is something that we are talking about not only here in the Medicaid program, there is a little debate brewing over IPAB, the Independent Payment Advisory Board, that would also reduce the growth rate or have a cap on the growth rate in Medicare spending. And one thing that is outside the scope of this briefing, but is none the less also was part of the Affordable Care Act, is part of the legislative proposals, is this Cadillac Tax, this sort of cap on employer sponsored coverage. So, are we being a little schizophrenic in how we are approaching this question? A lot of pontificating from my end, but really the question for the panel to kick it off, is kind of: What do you think is the problem that we are trying to solve here?
JOSH ARCHAMBAULT: Well, I would just step back for one second and say, we need to decide whether Medicaid is a health insurance program or a welfare program and depending on your answer to that question, you will change the structure of it. The other thing is, is the goal for people — since it is a largely income based program, is the goal for people to be on it for a long time? I would answer, no. So, anything that we can do to help people to get off, because it means by definition, they are poor, we want to do. So, I think that there is a lot to that, that you can peel back. Why can’t they afford insurance? So, we get into all of these other questions about scope of practice and regulations, which I don’t think we are going to focus on today, but I do think that that’s part of this answer. But ultimately, I think what we need to ask ourselves is: Is having somebody on a program for 20 or 25 years that means by definition they remain poor, and probably not working as much as they want or working at all. In Ohio, the Medicaid expansion population — 60% of them are not working. That should be deeply concerning to you, no matter what your view of Medicaid. We want to make sure that individuals don’t get stuck, that are able to work. I think that’s a bipartisan goal — perhaps not anymore in this country. But I think that’s what we need to start to ask ourselves — and I know other panelists are going to say, you can’t get everybody to work. I get that. But for those populations that we can, we certainly should be focused on that across programs. So, if you are on SNAP, on food stamps, on TANF or Medicaid, we need to understand that our goal should be to coordinate and get people off as soon as possible, onto affordable private insurance — which is that whole other conversation.
SARAH DASH: Richard, why don’t you go next?
RICHARD FRANK: Yeah. I’m going to speak as an economist here and just — so, money is the problem. People are poor. And — but I want to get to this issue of cut versus growth. Looking around the audience, there is like three people in the audience who remember Ronald Reagan. But, Ronald Reagan had a thing called a “misery index” which had to do with inflation. And in fact, if you look at CBO, if you look at everything, none of the projected index rates in Medicaid are keeping up with CBOs projected increase in healthcare inflation. And to kind of say that, okay, the absolute dollars are going to grow, but we are going to pretend there is no inflation, seems like really misleading. So, I think the problem is money; the problem is money in two places. One, people are poor and even when they work, they don’t have enough money to buy health insurance, and two, budgets are tight and in order to pay for poor people, you need budget dollars and they need to keep up with real resources.
SARAH DASH: Chuck, would you like to go next?
CHARLES DURATE: I would love to go next, thank you. So, again, I’m not as smart as Richard, but we are talking about money. Calling Medicaid a welfare program is kind of an interesting concept, because welfare has a connotation that goes back to the ‘90s where people were getting cash assistance. And Medicaid doesn’t provide cash assistance. It provides a service, it pays for a service. There are no dollars given to a Medicaid beneficiary as the result of them being on. It protects them from financial bankruptcy. And these are poor people to start with, okay? So, they are struggling day-to-day. If they are working or even not working, to make sure they can put a roof over their head and food on their table. We serve about — we have a food pantry — we get about 2,000 people a month that come in and don’t have food in the refrigerator, and a lot of these are expansion population folks. And we give them food until they can get to the food bank or SNAP. So, you are talking about the economy of a household where Medicaid does not contribute to the economy of that household, but it provides protection, a safety net for that household so it doesn’t collapse. I think if you look at the root word — and Richard would know, the root word of economics is [inaudible] and I think it means “home”. So, the whole root of economics has to do with the sanctity and the protection of the home. It got bastardized in the 1700s by the English and became something totally different, but there are no dollars associated with Medicaid. So, again, I don’t consider it a Welfare program at all, and I have been involved with it for 15 years.
MELINDA ABRAMS: As we pass it down to Cindy, I just wanted to add that I don’t think it’s just about being poor, I think it’s also about being sick. That the program is also there for people who are really sick, who maybe because of their illness, they have disabilities and it’s harder for them to work and harder for them to afford the extent of care that they need. Cindy? What problem are we trying to solve?
CINDY MANN: Good question. As Josh noted, actually, in his earlier remarks, per person, per enrollee, Medicaid cost growth have been well below the cost growth of commercial insurance and of Medicare. It’s not a runaway cost in terms of, oh my God, it’s just getting more and more expensive. Medicaid spending has increased, because again, as Josh also said, it’s covering a lot more people. It has filled in that gap that existed before the ACA and as Chuck also talked about, it has welcomed other people into the program who were always eligible, but didn’t know that they were eligible and have applied.
So, what problem are we solving? It’s covering more people. It seems to be why the growth in the Medicaid dollars are there. Is that a bad thing unto itself? Well, Josh has proposed that people shouldn’t be on Medicaid, they should go to private insurance, they should get themselves out of poverty. I’m all for solving poverty. And we ought — and I don’t mean to be glib about that, it is a really important issue. It’s not really the Medicaid program’s role to solve poverty, but also as Melinda said, I want to stress that Medicaid is a very diverse program. We are talking a lot about these now childless adults, but a third of the spending for Medicaid is for long term care. Is for Medicare beneficiaries who don’t get long term care services through the Medicare program, not extensive long-term care services. We have pregnant women, we have people who are totally and permanently disabled. Those are where the big costs are in the Medicaid program So, we really need to keep our eye on the ball of the diversity of the population and the services. And finally, just if we want to focus on how to cover very poor people, let’s look at the tax credits that are offered under the Senate bill. It would be offered to people down to zero percent of the poverty line. So, the poverty line for a single individual — $1,000 a month. Fifty percent of the poverty line? $500 a month. Not to spend on healthcare, to spend on food. To spend on rent. To spend on utilities., To spend on transportation. To spend on every single need, including healthcare. You can get a subsidy under the Senate Bill if you are at 50% of the poverty or zero percent of poverty or 100% of poverty, and you will get a subsidy to help you afford the premium. That premium actually is pretty modest. There will be many very low-income people who can’t even forward a modest premium. But, let’s assume for a moment they can afford that modest premium. We looked at what the deductibles will be. We looked at Arizona in particular. We also looked at National Data and we looked at actually what the premiums are in the marketplace in Arizona in different counties, and if you take the deductibles that that policy will end up requiring, plus the premiums, but it’s mostly the deductibles, then as a percent of income, buying that coverage through the tax subsidy will consume between 76 and 90% of your total income if you are at 100% of poverty. No room for food. No room for rent. No room for anything else. Medicaid fundamentally is about providing affordable coverage for people, and the tax subsidies that are being proposed as an alternative, just don’t cut it.
SARAH DASH: Thank you, Cindy. Let’s just — since we are on this topic and get into this question of private sector alternatives to Medicaid coverage. Part of challenge here seems to me that starting from its origins in 1965, as medical assistance for people who basically were receiving cash assistance, and the program has grown and grown and grown. But is that in response to frankly failures to address the problem in other ways? To have a functioning private insurance system that can be affordable for people of any income. I don’t know if anyone wants to try to take that one.
JOSH ARCHAMBAULT: So, the short answer is, yes, there is lots of work to do, and that’s probably what I spend about 50% of my job doing at the state level, is trying to help states crack that code. But I want to return to one thing I said at the beginning. Anybody that criticizes the reform has to defend the status quo. So, let’s not pretend that we can keep doing what we are doing. We can’t. And so, while I appreciate Chuck’s passion and Cindy’s passion about this, this is deeply personal to me. I have had family members on Medicaid. You have three choices. You can try to come up with a reform now to try to make it sustainable going forward, you can defend the status quo that is going to hurt the traditional Medicaid population, or you can kick the can down the road and have even deeper cuts in the future. Which one do you choose? That’s what we are talking about here. So, while there is lots of sniping in the media about it — and listen I’m not here to defend everything that’s in the Republican Healthcare Bill. Trust me, it needs a lot of work. However, when we talk about reform, if we want to keep any sort of promises, we have to change it. Let me make one last point here. For us to defend Medicaid as a great coordination of care, I mean, Chuck knows this first hand, when I talk to Medicaid Directors and others around the country, they are so frustrated with people going to the ER on Medicaid. Because we know that’s not the best way to get your care — everybody agrees on that. Yet, it’s a persistent problem. So, for us to say that this is some great silver bullet where we are delivering the best quality care, it’s simply not true. There is a lot of ways to fix it and when you also talk about the per capita caps, if you put that back since 2000, I don’t think any state would have exceeded their per capita cap. And the growth rate in the House Bill and in your packet is an analysis that we did on the House Bill. The growth rate for the elderly and the disabled is much more than what our projected growth rates are for those populations. So, we just need to understand, yeah, there are lots of moving parts here, but let’s at least understand that the dynamic going forward of the impact and whether we actually think the status quo is something we can sustain, and I would argue, absolutely not.
SARAH DASH: I want to give her an opportunity to ask her question.
AUDIENCE MEMBER: Thanks very much, Caitlyn Connolly with the National Employment Law project. I want to just ask a little bit more about homecare and long-term services and support. But first, I want to say, that beyond your three suggestions, there is four, which is revenue — addressing revenue, and not giving tax breaks to the wealthiest. Going into long term service and supports, which we know Medicaid is a primary funder of, and plays a huge role and as we are looking at an aging population; demographics that we have never seen before, this legislation will harm our current system and our future one, in even great ways by both — you know, per capita caps will not adjust for higher cost for the oldest old population — those who are 85 and up. And also, the job losses, particularly, in addition to the one and a half million projected that the specifics of those in the homecare workforce, we are looking at Leading Age and Community Catalyst released a report saying, between 300,000 and 700,000 homecare jobs could be lost because of these cuts, and that’s just at the time when we need even more homecare workers to meet that demand. So, I wonder if you could address that. Also, the one and a half million job losses by 2016, were you able to account for the even greater potential losses when Medicaid by 2036 is cut by 35%?
MELINDA ADAMS: Just taking on that last piece first, since the analysis just went to 2020, it’s done by Leighton Ku at George Washington University, you can look at it up on our website, and it projects out ten years to 2026.
CHARLES DUARTE: So, I’m going to go back to my previous life, this is Chuck, as a Medicaid administrator. One of the things I’m most proud of in Nevada is that we flipped the expenditures between nursing facility care, and home and community based services over a decade. It took a decade. And that was by establishing programs like personal care attendant services and making sure that they were funded adequately so that we could, not only in urban centers, but in rural communities, be able to take care of people at home. And so, I’m very proud of that — as well as expanding home and community based care. And so, your point is spot on. I don’t disagree with Josh that we can’t continue to see increases in the healthcare percentage of our GDP, but we have to find a way to make it more affordable. And with an aging population in Nevada, we have the second highest growth rate projected for 85 plus individuals. And they are going to be ending up in HCBS services or in long term care and facilities. And we have to find a way to make that more affordable and your fourth suggestion is spot-on. It’s revenue. I mean, how much does it cost — I worked for Blue Cross/Blue Shield in the ‘80s and I started a long-term care insurance product. It cost me, when I was 30 years, in premiums, it cost me $5 a month for HCBS coverage through Blue Cross/Blue Shield, and I could have continued paying those premiums. Now, if we charge people $5 a month as a part of either their Medicare program taxes or other taxes, we could be able to afford, in the long run, payment for HCBS services for individuals. Maybe not everybody, but we would have a modicum of services there that could be income adjusted and would provide for adequate long-term care services. So, revenue would be a solution to that problem, looking at our growing elderly population.
SARAH DASH: Thank you. We have been talking so much, we only have 12 minutes left in this briefing. I want to kind of make a note over here, that this issue of long-term services and supports financing is obviously a huge issue and I think there is some reports coming out around town on that issue and certain something that we plan to look at in the future, separate from this discussion. But I want to get to one of the question on the cards. We have been talking a lot about adults and older Americans. I believe Melinda mentioned the statistics on how many children are covered. This is question for Cindy since you ran the CHIP program as well: What are the intersections between CHIP and Medicaid and some of the changes that are proposed and how would CHIP be implicated in all of this?
CINDY MANN: I appreciate the question, whoever sent it in. Because it’s often overlooked that Medicaid is such a significant player in the lives of children across the country, about 40% of children around the country get their coverage through the Medicaid program. The CHIP program, as is often said, stands on the shoulders of the Medicaid program, a little over 8 million children covered through the CHIP program, about 37 million children covered through the Medicaid program. Both cover some healthy children, but Medicaid covers the lion’s share of the kids who have greater healthcare needs. So, CHIP has been enormously successful, has a lot of bipartisan support, has really helped with continuity of coverage, helped make sure that that uninsured rate has plummeted for children over the last ten years. It’s now below 5%, thanks largely to Medicaid and CHIP, but it functions a lot because Medicaid sits beneath it. It’s covering so many more of those children and it’s covering children with the higher healthcare needs. So, you really need both to complement each other, in order to maintain the coverage and the health outcomes that we’ve seen for kids over the last few years.
SARAH DASH: Let me follow on that. We actually also got a question about pregnant women and the block grant option in the legislation. So, can you talk about, what is the option for states to do a block grant, instead of per capita caps, and I believe that’s mostly pertaining to pregnant women and non-disabled adults. But, can you kind of explain what the proposal actually is, and then what would that mean and what incentives would that put in place for states? Would it put in place incentives to do a better job with maternity outcomes, for example? Or not? And if not, why?
CINDY MANN: Sure. In terms of incentives to do a better job on maternity outcomes, let me just pick up quickly the point about the status quo. I don’t think there is a Medicaid program in the country that is just running on auto pilot. There is no status quo in the Medicaid programs. They are incredibly dynamic and what’s been going on, really since the end of the great recession, is a very focused effort on trying to lower costs through care improvements, through better integration of care, through coordination of care, through looking at those high cost individuals, avoiding emergency room costs, avoiding preventable admissions. Lots and lots of energy going around that. So, I don’t think any of this discussion around the bill — and any criticism about the bill, should be taken as a statement that there ought to be no change, or there is no change in the Medicaid program. In terms of the block grant. The block grant proposal in the Senate is more narrowly drawn than in the House proposal. It’s also a lot more detailed than in the House proposal. It would largely be for pregnant women and those very low-income parents that didn’t fall into the expansion population. And it would not, unlike a per capita cap, it would not vary; the amount of money that you got, would be based on your historic spending, but it wouldn’t vary over the years based on the numbers of people that you enroll. So, that’s a big financing difference between a block grant and a per capita cap. The other things is, in the Senate bill, the growth in the block grant would be at that CPI, that lower trend rate, for the entire period of time. So, it wouldn’t vary based on enrollment, and it wouldn’t grow nearly even as much as the per capita caps would, at least until the outer years, they would both grow at that rate. Why would a state want to do that? It does give the states more flexibility, could lower benefits to pregnant women, reduce federal requirements in terms of what services are covered, or the amount and the scope of those services, but it also has this feature, which is kind of hidden, but it allows states to draw down those federal block grant dollars with spending a lot less of their state dollars. So, it might also have an attraction to states for that reason.
JOSH ARCHAMBAULT: I will just say one thing briefly about — I know folks in this room probably know this, but maybe not all the viewers; Cindy described what’s in the Senate bill — this is likely to go to conference committee, and so the final version of what comes out of this, may look different what we are describing. So, as people are reading the media, they are saying, oh, this is in the House bill and this is in the Senate bill, and I think a lot of Americans assume what is currently being debated will be the final version, and there is no guarantee of that. So, I just wanted to mention that this is a moving target, as many of you are aware of.
SARAH DASH: Thank you, that is a great point. We have time for one more question at the mic, if you keep it brief and then we will ask a couple wrap up questions.
AUDIENCE MEMBER: Thanks, Sarah, my name is Mike Miller and I’m one of the clinicians that Chuck mentioned that have actually treated patients. Since Richard brought up Ronald Reagan, it made me think that — my first position here in Washington was in the Reagan White House and not only did he have the “misery index” but one thing, he was noted for saying, was asking the rhetorical question: Are you better off now than you were four years ago? And I think that’s a great way to perceive what’s going on with Medicaid and our entire healthcare system, and particularly with the changes that have happened with the ACA, what it means for people on Medicaid, because one of the challenges that Medicaid has — I know Chuck knows that, Cindy knows it — is there can be a lot of churn between people going into Medicaid, into uninsured and to private insurance and employment based insurance, that kind of thing. So, I’m wondering if Cindy or Chuck or Melinda can talk a little bit about the challenges of a Medicaid program, dealing with those people going in and out of different insurance eligibility coverages and how the current situation — I won’t call it the status quo — makes their lives better and makes it simpler for insurance coverage and continuation of coverage — thank you.
CINDY MANN: A number of ways in which the Affordable Care Act and also just states’ decisions about how they are implementing the Affordable Care Act, whether they are an expansion state or not, but that has reduced churning in the Medicaid program. It’s not that it’s not continuing to be an issue, there is still, in a lot of in and out, but a lot of the simplifications of the enrollment process and the renewal process has meant that paperwork barriers that have kept people from being covered continuously, as long as they are eligible, are in place. And the benefits of that, really go to some of the issues we were just talking about in terms of what states are working on. Which is, if you are really trying to get at those high cost case individuals, if you are really trying to change the trajectory of their health, then you need to have their lives covered. You need to be connected to them for a continuous period of time. So, the churning is both good for people, because they can access their care, but it is also good for the goals of helping to improve the management of care, and to bring down that cost curve.
SARAH DASH: Just a super quick note on that. I mean, I think some of this sounds like from Josh, what you were saying earlier about trying to get people off of the Medicaid program as soon as possible. Does some of this kind of depend on how you view the Medicaid program? Should it be a temporary source of assistance or longer-term kind of health insurance program. Maybe just to point that out. Well, we have a few minutes left and we certainly haven’t solved all the problems today, but we have certainly had a robust discussion. I guess I just want to close by asking each of the panelists, in 30 seconds or less — I mean, if you could wave your magic wand and make one change or state one principle about this program, what would it be? That’s about all we will have time for, and then we will wrap it up. Start with Richard.
RICHARD FRANK: Well, if you don’t mind, I will take my time — I also want to issue what I think is a correction; which is, there is an impression that somehow the evidence out there suggests that from the Oregon experiment, is that there is no benefit to Medicaid in terms of health. Somehow, everybody seems to skip over the fact that mental illnesses and diabetes are both sicknesses that cost this country a lot of money. In fact, diabetes is probably the most expensive single illness in the country, and those are the places that the Oregon experiment had their biggest effect. And somehow people keep skipping that part, and I don’t understand it. But, for me, I guess I think there is a lot of flexibility in Medicaid. I do think that some of the problems have been sort of chronic underpayment in certain areas and that’s because in a sense we have used prices to control supply, and I do think the advantage of managed care, apologies to Chuck, is that in fact, it allows a greater flexibility on that front. And allows sort of more of a mainstreaming of the delivery system in the Medicaid program.
CHARLES DUARTE: I will accept that criticism. I think if I had a magic wand and I could wave it, and I could fix Medicaid and the rest of the health system, I think there is just one answer. I mean, you have to look at the most economical and efficient systems that we have already operating in the United States, and that’s Medicare. And so, I think Bernie Sanders said it, and I will go right there: If I had a magic wand, I think we need a single pair system, if we are going to be able to provide coverage for everybody.
SARAH DASH: Alright, Josh?
JOSH ARCHAMBAULT: I will take a slightly different tact. If I had a magic wand, I would hope that our conversation about Medicaid would stop assuming it can fix all of our problems and actually take a critical eye to say, if we are really robust, critical public policy makers, we are going to see if there is a better way to do it, and do it that way instead, if it’s better. Whether it’s opioid treatment or others, instead of assuming that a managed care plastic card solves all of our problems.
CINDY MANN: Well, where I would wave my wand, I suppose depends on the day or the week, but I’m focused on what is going on here in the Congress, so I will talk about my wand relative to the discussion at present. Medicaid is not perfect; no program is perfect. It’s evolving, it’s changing, it’s growing, it’s developing. But, what seems pretty clear to me, having experience in the program for quite a number of years, is that just cutting off expansion funding that has supported the growth of people being able to get coverage for the first time and get care for the first time — consistent, regular care. And just arbitrarily capping the federal contributions and saying, we are going to give you this much and no more, is not solving our healthcare problems, it’s not improving health outcomes. It’s guaranteeing the federal government some savings, but I don’t think it’s tackling any of the big issues that are before the nation in terms of healthcare costs or health outcomes.
SARAH DASH: Well, to tackling the big issues, thank you all so much. If I could wave my magic wand, you guys would all fill out your blue evaluation forms. So, hopefully you will do that before you go home for the afternoon. That’s easy. Thank you to our panelists, really appreciate you being here.