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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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A report released by the Robert Wood Johnson Foundation (RWJF) examines Medicaid expansion in eight states- Arkansas, Colorado, Kentucky, Michigan, New Mexico, Oregon, Washington, and West Virginia. Researchers found that these states are seeing large budget savings without reducing services. Savings and revenues by the end of 2015 are expected to exceed $1.8 billion across all eight states, and in Arkansas and Kentucky these savings and revenue gains are expected to offset expansion costs through 2021. The report suggests that these savings come from less state spending on programs for the uninsured, more federal dollars for newly eligible enrollees, and higher revenue from existing insurer and provider taxes. The authors contend that these findings will apply to every state that has expanded Medicaid.
The Center on Budget and Policy Priorities (CBPP) released a report to help state policymakers design waiver proposals for alternative approaches to expanding Medicaid. Arkansas, Iowa, and Michigan have all been granted waivers by the federal government to expand their Medicaid programs through alternative methods. The report outlines what federal officials have previously permitted and refused to help newly interested  states successfully obtain a waiver.
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
In a recent letter to Medicaid directors, the Centers for Medicare and Medicaid Services (CMS) revealed plans to issue new regulations that will codify the availability of the 90/10 federal matching funds under the Affordable Care Act (ACA) for Medicaid eligibility and enrollment systems on a permanent basis. The letter also announces CMS's intention to provide a three-year extension of the A87 waiver authority, allowing states to use their federal funds to help integrate Medicaid eligibility and enrollment through other social services through December 2018.
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.
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...