Center for Public Policy Priorities 1 Advocate’s Perspective: Advocate’s Perspective: Texas...

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Advocate’s Perspective:Advocate’s Perspective:Texas Medicaid Reforms

Health and Human Services Subcommittee,House Committee on Appropriations

October 9, 2006Anne Dunkelberg, Associate Director

900 Lydia Street - Austin, Texas 78702Phone (512) 320-0222 – fax (512) 320-0227 - www.cppp.org


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Texas Medicaid: Who it Helps

Children, 1,784,302

Disabled, 360,974

Elderly, 362,953

Poor Parents, 60,445

TANF Parent, 25,411

Maternity, 97,161

August 2006, HHSC data.

Total enrolled 8/1/2006: 2.68 million


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Who Texas Covers Defines Which Reforms are Possible

• VERY few parents on Texas Medicaid• Very few enrollees are “optional”

coverage under federal law• Children, Pregnant Women, the

Elderly, and Persons with Disabilities:– Most of Texas Program– Special Protections in Fed law– Special concerns for their vulnerability


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Enrollees Expenditures

Texas Medicaid Enrollees and Expenditures by Enrollment Group

(2004)

SOURCE: HHSC

Children 30%

Elderly & Disabled59%

Adults 11%Children70%

Elderly & Disabled

21%

Adults 9%

Total = 2.6 million Total = $14.7 billion


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Children Account for Most Medicaid Enrollment Growth (U.S. 2000-2002)

SOURCE: Urban Institute, 2003; estimates of the 2000 MSIS Annual Person Level Summary Files; 2002 data from the CBO March 2003 baseline. *Ever Enrolled

Total Enrollment Growth = 6.6 Million

Children56%

(3.7 million)

Adults35%

(2.3 million)

Blind/Disabled6%

(0.4 million)Aged3%

(0.2 million)


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Elderly & Disabled Account for Most Medicaid Spending Growth

(2000-2002)

DSH 0.7%

*Other 2.5%

Medicare Payments 2.1%

Total = $48.2 Billion.SOURCE: Urban Institute, 2003; estimates based on data from CMS, CMSO, Medicaid Statistical Information System (MSIS) and HCFA/CMS-64 Reports. * Other = Administrative costs and adjustments

Children20.8%

Adults15.4% Disabled

34.3%

Aged24.3%

Aged and Disabled58.6%

Children and Adults

36.2%


7What Medicare Does Not Cover: Major Medicaid Cost Driver

(FY2003)Medicare PremiumsPrescribed Drugs

Long-Term Care

Acute Care

Total Spending on Duals $105.4 billion

SOURCE: Urban Institute estimates for KCMU based on an analysis of MSIS and Financial Management reports (CMS Form 64).

Total Medicaid Spending $262.2 billion

Duals 40%

Other Beneficiaries

60%

66%

14%

15%

5%

K A I S E R C O M M I S S I O N O N

Medicaid and the Uninsured


8Challenge: Potential for Savings is Greatest Among

Most Vulnerable• Cautious approach needed in cost containment

aimed at Elderly, Texans with Disabilities.• Savings most likely to take time to manifest –

significant reforms seldom yield immediate results.

• Key areas of Texas Medicaid pay such low rates that ability to reduce costs further is slim.

• HHSC/Texas Medicaid currently tackling enormous number of reforms & program modifications enacted in 2001, 2003, and 2005.


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Medicaid is Growing Slower than Private Health Spending, 2000-

2003

6.9%

9.0%

12.6%

Medicaid Acute CareSpending Per

Enrollee

Health Care SpendingPer Person with

Private Coverage1

Monthly PremiumsFor Employer-

Sponsored Insurance2

1 Strunk and Ginsburg, 2004.2 Kaiser/HRET Survey, 2003.

K A I S E R C O M M I S S I O N O N

Medicaid and the Uninsured


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What Texas Spends

State "Own Source" Budget, 2006-07: $90 Billion

All Other, $7.0 b, 8%

Business/Econ Devel., $9.2 b, 10%

Criminal Justice, $8.3 b, 9%

Other Health & Human Services,

$5.1 b, 6%

Medicaid, $14.1 b, 16%

Higher Education,

$17.7 b, 20%

K-12 Education, $28.6 b, 31%

"Own Source" = Excludes Federal Funds

Sources: LBB, SB 1


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Medicaid spending HAS grown Quickly over last Decade….

BUT:• Medicaid’s cost-per-client has been growing at

about HALF the rate of Employer-sponsored group insurance.– Texas and the US do need to control health care costs, but

not just in Medicaid. Targeting Medicaid alone will not solve the problems.

• Texas’ STATE DOLLAR Medicaid spending (that’s the money YOU have to raise, NOT the federal tax dollars we bring back home as Medicaid match) is till #3 AFTER K-12 education, and Higher Ed.

• Medicaid is the #1 source of federal dollars in our state budget, far outstripping the next highest area (usually highways).


12HHSC/Texas Medicaid:A VERY Full Plate

As HHSC has laid out:• Integrated Eligibility and Enrollment/TAA take-over of CHIP

Eligibility• Managed care Expansion: HMO, PCCM• Preferred Drug List/Prior Authorization/Pharmacy Benefits

Manager• Disease Management• Integrated Care Management/STAR+PLUS• 87 (!) SB 1188-related projects, including ER Utilization, Case

Management Optimization• Women’s Health Waiver• CHIP Perinatal• Medicaid Buy-In (workers with disabilities)• CHIP remiums assistance and 3-Share Waiver• 5 approved and 3 proposed UPL programs• Hospital Reimbursement Studies• Implementing MANDATORY DRA provisions: Long Term Care

Asset restrictions (will yield some savings); US Citizenship Documentation


13HHSC/Texas Medicaid:A VERY Full Plate

Many programs are underway which are likely to yield real efficiencies and savings,

But MOST have not yet had sufficient time to reach their full potential.

No “pig in a poke”: Independent Monitoring and Evaluation of all reforms should be required before new programs are continued and/or expanded statewide.

Beware the “Weekend Chore List” Syndrome:

Just because I ask my husband to re-paint all the trim on our house over the Columbus Day weekend does NOT mean he can really accomplish it in that short time.

Overloading the agency with too many simultaneous assignments for change risks undermining the promise and ultimate success of policies enacted in last 5 years.

Rx for near term: Slow Down, Fix, Perfect, Study what we are already doing. Be very selective & cautious in adding to the list we just read.


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Texas’ Limited DRA Options

Cost Sharing options (very limited)Non-Preferred Rx: • DOCTORS, not patients, prescribe non-preferred

drugs. Make sure Dr.s Know when they prescribe something that will require a co-pay, and ask if family can afford.

• Monthly out-of pocket limits are needed to protect sick children, elders, persons with disabilities.

• Denial of Rx to those who cannot pay is OPTION, not mandate. Prescriber should be notified if patient cannot afford co-pay.

Numbers for whom other cost share allowed so small that not cost-effective to implement.


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Texas’ Limited DRA OptionsBenchmark Benefits• Great majority of kids in Texas Medicaid already

in HMO care, which already uses a benchmark package, and state “wraps around” to provide comprehensive EPSDT services.

• Unclear what, if any additional advantage this DRA option offers Texas.

• Children on Texas Medicaid not getting enough preventive care or care management (Frew Lawsuit).

• Could entail significant administrative costs to change from this existing model without strong argument for doing so.


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Great Opportunities to Better Serve Texans with Disabilities, the Elderly

• Medicaid Buy-In for Children with Disabilities• Money Follows Person Grants• LTC Partnerships (may only reach limited group,

but still would yield savings if so)• HCBS for mental health care


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Health Opportunity Accounts: Caveats!

• Remember, HOAs were a COST, NOT savings to DRA

• MUST fully fund Account • A real pilot: limited area, STUDY results, and make

changes • RIGOROUS oversight of complete information for

clients about what can and cant be counted toward deductible, paid from account is CRITICAL.

• MUST be voluntary.


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Advocates Concerns: DRA, plus other Options under 1115 Waivers

Beware comparing “Perfect Fantasy” to Imperfect Reality. – In 1993, we thought HMOs would solve

all our Medicaid cost problems.– Good ideas can be tough to implement:

IE&E sounded GREAT on paper!– MOST waivers and DRA options have

NOT been implemented yet: still fall in the Perfect Fantasy category.


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Advocates Concerns: DRA, plus other Options under 1115 Waivers • WV:

– Children should not be punished for parents’ shortcomings (e.g., parent, not child chooses ER; child should not lose benefits for parental actions).

– Must doctors be “Enforcers”?• KY:

– Too many different ESI products could be impossible for state to monitor and guarantee kids get FULL EPSDT benefits

– Concerns about being assigned to “wrong” benefits package, and ease/speed of transition to “right” one

– Speed of transition back to standard package if ESI benefits are too limited

• Concerns about Florida Waiver are similar; again, these initiatives have no real track record yet: Perfect fantasy….


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