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CBPP paper reviews how Medicaid expansion will impact state budgets

Posted on July 13, 2012 | No Comments

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The Center on Budget Policy and Priorities (CBPP) published an article which found that the Affordable Care Act’s (ACA’s) Medicaid expansion would “add very little to what states would have spent on Medicaid without health reform, while providing health coverage to 17 million more low-income adults and children.” The paper reported that “contrary to claims made by some of the Medicaid expansion’s critics, the expansion does not impose substantial financial burdens on states,” as the additional projected spending “equals 2.8 percent of what states would have spent on Medicaid in the absence of health reform.”

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In a letter sent to State Medicaid Directors, the Centers for Medicare and Medicaid Services (CMS) stated the agemcy would allow states to use "flat files," or files with very little information about new Medicaid enrollees, to intermittently count as full applications in terms of enrolling individuals into state Medicaid programs under the Affordable Care Act (ACA). The ACA permits states, if they so choose, to expand their Medicaid population, and provides the opportunity for individuals to enroll in Medicaid through the health insurance Exchanges. Currently, the federal government cannot transfer complete Medicaid applications to states, which prevents states from enrolling their constituents into Medicaid in a timely fashion. CMS is addressing this issue by allowing the "flat files" to count as enrollment applications so that states may ensure these new enrollees have Medicaid coverage by January 2014. This fix is a transitional policy, and states must apply for a waiver in order to use the flat files for enrollment.
On Friday, the Centers for Medicare and Medicaid Services (CMS) released guidance explaining state considerations in designing and executing Medicaid Shared Savings Programs (MSSP). CMS provides flexibility for states in designing MSSP, yet CMS proclaimed they will not partner with state MSSP that only produce cost savings - the program must also improve health care quality and health outcomes. The guidance, in the form of a letter to State Medicaid Directors, does not prescribe a particular model the agency favors, but rather questions states should be able to answer in regards to the design approach they propose.
The HealthReformGPS map documenting the current status of Medicaid expansion and Marketplace structure has been updated to reflect the likelihood that Ohio will be the newest state to expand Medicaid under the Affordable Care Act (ACA).
In a new article published in Health Affairs, researchers at the George Washington University School of Public Health and Health Services report that individuals currently enrolled in state Medicaid programs may not benefit from the Affordable Care Act's (ACA) extension of preventive services to the same extent as their peers that are newly-eligible to Medicaid under the ACA Medicaid expansion. Newly-eligible Medicaid beneficiaries receive services rated at A or B by the US Preventive Services Task Force without cost-sharing. The study, Existing Medicaid Beneficiaries Left Off The Affordable Care Act's Prevention Bandwagon, found that since the ACA treats current and newly-eligible Medicaid beneficiaries differently, current beneficiaries may receive preventive services at varying degrees, but ultimately less comprehensively, than their newly-eligible peers. Additionally, variations in how preventive services are defined amongst states may also negatively impact the ability of current Medicaid beneficiaries to access preventive services.
An article published in the June issue of Health Affairs indicated that states opting out of Medicaid expansion would prohibit 3.6 million Americans from gaining insurance and would miss out on $8.4 billion in federal payments. The analysis, performed by RAND, evaluated 14 states that had originally denied the opportunity to expand their Medicaid-eligible population to 138% of the federal poverty level. RAND determined that forgoing expansion will increase the cost of caring for the uninsured individuals in these states by $1 billion in 2016. Irrespective of the financial implications, the RAND study also found that not expanding Medicaid may result an additional 19,000 deaths per year in the 14 states studies.
The State Health Reform Assistance Network, in conjunction with the National Academy of State Health Policy and the Robert Wood Johnson Foundation, released a checklist detailing Medicaid requirements that each state must meet by 2014, irrespective of whether or not a state expands Medicaid eligibility as described in the Affordable Care Act (ACA). To accompany the outlined requirements and optional provisions detailed in the report, State Health Reform Assistance Network has also included a resource list with tools and analyses that can be incorporated to aid in Medicaid requirement implementation. The checklist is divided into five categories that should be altered in response to pending Medicaid changes, each of which containing various requirements to satisfy the specified category:
  • Eligibility and Enrollment
  • Medicaid Operations
  • Medicaid Financing
  • Medicaid Benefits
  • Consumer Assistance
According to an analysis released this week by The New England Journal of Medicine, twenty-three governors, including four Republicans, support the Affordable Care Act's (ACA's) Medicaid expansion. Thirteen governors, all Republican, oppose the expansion, and fifteen (thirteen Republican and two Democrats) remain undecided. The analysis, conducted by Harvard's Benjamin D. Sommers and Arnold M. Epstein, also highlights comments made by governors in recent months regarding expansion. For governors who oppose the expansion, major themes include cost, lack of flexibility, and harm to self-reliance. For governors in support of the expansion, major themes include expansion of health care delivery, a natural progression building on previous expansions, and fiscal responsibility. Most undecided governors said that they needed more information regarding requirements, costs, and enrollment projections.
A report recently released by the Robert Wood Johnson Foundation (RWJF) serves as a guide for states considering Medicaid expansion in the wake of the U.S. Supreme Court decision. The analysis in the RWJF report is limited to financial considerations related to a state’s decision to expand and therefore does not include many financial aspects related to the Affordable Care Act (ACA) as a whole (remaining mandatory provisions, for example). There are six main areas of financial analysis that all states should consider that are included in this report: 1. Cost of newly eligibles 2. Cost of currently eligible but not enrolled 3. Administrative costs 4. Savings from transitioning current Medicaid populations to newly eligible group 5. Savings from reduction in state programs for the uninsured 6. Other revenue gains and savings.
As full implementation is poised to begin, GPS staff have prepared a map designed to provide a status update in one visual. The map blends Medicaid and Marketplace information to present a more comprehensive view of states’ role in implementation, as the extent of their engagement in two central elements of the law, the Medicaid expansion and the establishment of Marketplaces. The 16 states in blue are...