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(1)

Medicaid Expansion in South Carolina:

Why Access to Health Care Matters

Katherine Record, JD, MPH, MA Senior Fellow

Center for Health Law and Policy Innovation of Harvard Law School March 2013

(2)

Part 1: From Status Quo to the

Affordable Care Act

Part 2: Medicaid Expansion: South

Carolina Implementation Challenges

and Opportunities

Part 3: Massachusetts Case Study: a

Preview of the ACA’s Impact

(3)

Part 1:

From Status Quo to

the Affordable Care Act

(4)

Where We Are:

Status Quo = Access to Care Crisis

20% uninsured in South Carolina Group Private health insurance is largely through employment and doesn’t work for the

unemployed or many part-time or

low wage workers

Individual Private health insurance is

too expensive for most and often excludes those with

pre-existing conditions Medicaid/ Medicare are lifelines to care, but disability standard means

they are very limited Discretionary programs don’t keep pace with growth in demand

(5)

Rising Rates of Uninsured

See: http://www.gallup.com/poll/156851/uninsured-rate-stable-across-states-far-2012.aspx?version=print

(6)

South Carolina: One of the Highest Rates of Uninsured in the Country

(7)

• Cannot be denied insurance because of pre-existing health condition, even if you don’t currently have coverage (2014)

• Health plans cannot drop people from coverage

when they get sick (in effect)

No lifetime limits on coverage (in effect)

• No annual limits on coverage (2014)

Affordable Care Act:

Private Insurance Reforms

(8)

• Consumer-friendly Exchanges to purchase private insurance

South Carolina will have a federally run Exchange • Federal subsidies for people with income between

100-400% FPL

(Up to ~$44K for an individual/~$92K for family of four)

• Plans cannot charge higher premiums based on gender or health

• Plans must include Essential Health Benefits

ACA Promotes Access to Subsidized Private

Insurance through Exchanges in 2014

(9)

ACA Essential Health Benefits For All Newly Eligible

Medicaid Beneficiaries

For Most New Individual and

Small Group Private Insurance

Beneficiaries

ACA Includes a Comprehensive

Essential Health Benefits Package

• Ambulatory services

• Emergency services

• Hospitalization

• Maternity/newborn care

• Mental health and substance use

disorder services

• Prescription drugs

• Rehabilitative and habilitative services

• Laboratory services

• Preventive and wellness services and

chronic disease management

(10)

South Carolina: Federal Exchange

South Carolina did not create a state exchange or opt to control part of a federally facilitated exchange

Federal government will be responsible for plan management and consumer assistance

- Plan Management includes: responsibility for all qualified health plan certification, management, oversight, monitoring and

marketing

- Consumer Assistance includes: overseeing the Navigator program, and providing other in–person assistance to consumers

Federal government is responsible for exchange web site and consumer hotline

(11)

Increased Medicare Drug Coverage &

Free Preventive Services

• Part D “donut hole” phased-out by 2020

• 50% discount on all brand-name prescription

drugs

• Free preventive services

– E.g., mammograms, colonoscopies, other cancer screenings; diabetes screenings; tobacco cessation counseling; pre-natal care; alcohol abuse screening & treatment; depression and obesity screening &

(12)

Expanded & Improved Medicaid

Income based eligibility - up to 138% FPL

(~$15K for an individual; ~$32K for family

of four)

– No longer need to be disabled before getting care – Every low-income U.S. citizen and legal immigrant

(after 5 years in U.S.) automatically eligible in Expansion states

Expansion = optional, but fully federally

funded for first 3 years; 90% federally

funded thereafter

(13)

• Increased reimbursement for primary care providers (up to Medicare reimbursement rate) for 2013 and 2014

• State option to provide cost-effective, coordinated and enhanced

care and services to people living with chronic medical conditions through Medicaid Health Home Program (90% federally funded for all Medicaid beneficiaries for 2 years)

• State option to provide free preventive services (increased federal

funding)

– E.g., mammograms, colonoscopies, other cancer screenings; diabetes

screenings; tobacco cessation counseling; pre-natal care; alcohol abuse

screening & treatment; depression and obesity screening & counseling; STI testing; vaccinations

– Children - pediatric visits, vision and hearing screening, developmental

assessments, immunizations and obesity screenings

Improved Medicaid: Primary Care Providers,

Health Homes, Free Preventive Services

(14)

Affordable Care Act:

Tremendous Potential to Reduce Costs & Improve Outcomes; Requires Successful Implementation

Medicaid:

Expands eligibility (state option); provides essential health benefits

(EHB) (federal and state regulations); improves reimbursement for

PCPs (only 2013-14); health home (state option); free preventive

services (state option for Medicaid)

Private Insurance Exchanges:

Subsidies if living b/w 100% - 400% FPL (federal and state

regulation); eliminates premiums based on health/gender;

guaranteed EHB (federal and state regulation); outreach, patient

(15)

Part 2:

Medicaid Expansion:

South Carolina ACA Implementation

Challenges and Opportunities

(16)

Medicaid Expansion Would Provide Early Access to Health Care to Low-income Individuals & Families

South Carolina DHHS, Medical Affairs Committee Affordable Care Act PowerPoint ,11/28/12

Red = Uninsured Low-income Adults; Covered by Medicaid Expansion at Nearly Entirely Federal Expense

(17)

Challenge: Social Determinants of Health, Not Access to Care, Drive Disparities in SC

(18)

Social Determinants of Health are the Biggest Cause of Health Disparities

Social Determinants of Health:

Jobs, education, nutritious food, safe housing, transportation, clean environment, access to culturally appropriate HC providers

Differential Access to Social Determinants Create Health Disparities:

Different health outcomes based on race, ethnicity, income, gender, sexual identity and orientation, disability status, geographic location (rural and urban)

But determinants of health are intertwined with access to care … Would you give up your insurance?

(19)

Keck: “[W]e are working to increase value by increasing efficacy and reducing cost per person through three

major strategies: payment reform, clinical integration and targeting hotspots and disparities.”

“Rather than indiscriminately expanding coverage

based on income, it is our intent to layer Medicaid on top of other state and local government agency and private resources to address geographic, population and disease hotspots to improve health where it is needed most.”

Anthony Keck, South Carolina’s View: the Affordable Care Act’s Medicaid Expansion is the Wrong Approach, HealthAffairs Blog (Sept. 6, 2012)

(20)

SC’s Disease“Hot Spots” are the

Areas with Highest Uninsured

Keck’s “Disease Hot Spots” Distressed Tax Zones Distressed & Highly

(Lowest Average Household Income)

Anthony Keck, South Carolinas View: the Affordable Care Acts Medicaid Expansion is the Wrong Approach, HealthAffairs Blog (Sept. 6, 2012)

Haynsworth Sinkler Boyd PA, 2012, available at http://www.hsblawfirm.com/news/32/new-market-tax-credits

(21)

South Carolina Public Health Institute, A Report on the Uninsured and Underinsured in

South Carolina, August 2009

(22)

Early Access to Comprehensive Health Care Matters

• Improves overall physical, social and mental health status • Prevents disease and disability

• Leads to detection and treatment of health conditions • Improves quality of life

• Reduces preventable death • Increases life expectancy

Uninsured people are less likely to receive

medical care, more likely to have poor health status, and more likely to die early

(23)

Continuous Access to Healthcare

Reduces Disparities and Costs

• People with a usual source of care have better health outcomes (reducing health disparities!) and at lower cost

• Having a regular primary care provider increases the likelihood that a patient will receive appropriate care • Access to evidence-based preventive services

prevents illness by detecting early warning signs or symptoms before they develop into a disease and detects disease at an earlier, and often more

treatable, stage

(24)

Early Intervention is Cost-Effective & Improves Individual and Public Health Outcomes

• interventions to prevent/control diabetes are cost-effective and evidence-based*

• Early intervention for mental illness is highly cost-effective when compared with standard care**

• pharmacological treatment of risk factors can prevent

heart attacks and strokes***

• increased screening and increased access to treatment could avert 300,000 HIV infections (17% - 24%) over 2 decades****

* Li Rui, et. al., Cost-Effectiveness of Interventions to Prevent and Control Diabetes Mellitus: A Systematic Review, 2010; ** Paul McCrone, Cost-effectiveness of an early intervention service for people with psychosis, 2010; *** William Weintraub, Value of Promordial and Primary Prevention for Cardiovascular Disease, 2011; **** E Long, et. al., The

Cost-Effectiveness and Population Outcomes of Expanded HIV Screening and Antiretroviral Treatment in the United States, 2010

(25)

Challenge: Medicaid Expansion Merely Inflates a Broken Healthcare system

“[E]xpansion will hurt the poor, hurt South

Carolina, and hurt the country by doubling down on a system that already delivers some of the

lowest value in the world” - Keck, Director, DHHS “The primary cost-driver is the size of the Medicaid population.” – Senator Tom Davis

Anthony Keck, South Carolina’s View: the Affordable Care Act’s Medicaid

Expansion is the Wrong Approach, HealthAffairs Blog (Sept. 6, 2012) Columbia, We Have a Problem, FitsNews (Oct. 25, 2012)

(26)

Medicaid Expansion is a New Program

We are creating a whole new Medicaid

program, while maintaining the existing

disability program.

Expansion is not disability program. It is a

prevention-based early access to

(27)

Current Medicaid Program = Disability Program

(Not a Health Care Program for Low-income Uninsured)

Kaiser Family Foundation. Analysis of 2007 MSIS data provided by the Urban Institute

(28)

Expansion is Not Just for the Unemployed / Disabled:

SC Workers and Small Business Owners are Increasingly Uninsured & Will be Eligible

South Carolina Public Health Institute, A Report on the Uninsured and Underinsured in

(29)

South Carolina Public Health Institute, A Report on the Uninsured and Underinsured in South Carolina, August 2009

(30)

There is Time to Give Expansion a Trial Run

House Democrats proposed

expansion with a mandatory

reauthorization before 2017, when

the 100% federal match rate ends

Would allow for cost efficacy analysis

Kirk Brown, SC House Republicans Reject Democrats’ Effort to Expand Medicaid Program, IndependentMail (March 12, 2013)

(31)

“If more money and more government produced healthier citizens, Americans should be the

healthiest population on the planet – but we’re not.”

– SC House Speaker Bobby Harrell

“There is sufficient money currently in the health care system -- we need to do the hard work to

shift it from non-productive to productive uses.”

-DHHS Director Tony Keck

Adam Beam, SC House Rejects Medicaid Expansion, Island Packet (March 12, 2013)

Anthony Keck, South Carolina’s View: the Affordable Care Act’s Medicaid Expansion is the Wrong Approach, HealthAffairs Blog (Sept. 6, 2012)

Challenge: We Need to Shift Resources, Not Spend More

(32)

The US Spends More than Other High-Income Countries, with Far Worse Outcomes

In all other industrialized democratic countries, costs are lower & outcomes are better because every citizen is guaranteed access to health care

Average per capita health spending

(33)

SC Plan is to Continue Down the Path That’s Not Working: Medicaid Expansion June 2010-11

Percent Change in Medicaid Enrollment

The Kaiser Family Foundation, statehealthfacts.org. Data Source: Kaiser Commission on Medicaid and the Uninsured. “CHIP Enrollment: June 2011 Data Snapshot, Medicaid Enrollment: June 2011 Data Snapshot”

(34)

This Path is Hurting the State

2010-2011 - South Carolina moved from 41st to

46th in United Health Foundation’s “America’s

Health Ranking” survey Past Decade:

•The uninsured population grew from 15.4% in

1994 to 21.3% in 2012*

•The % of obese adults jumped from 22% to 32%

•The number of people with diabetes rose from

7.1% to 10.7 %

•Increase in rates of uninsured vary by survey but all show a significant rise in un-insurance in SC from 1995 to 2012. Data shown based on US Census Data (1995) and Gallup Poll Data 2012. See:

(35)

Challenge: United States in Debt

We Cannot Afford Expansion

• Federal government has $16.6 trillion debt

• If federal matching rate drops below 90%, SC will

assume higher cost of expansion than estimated

Many states share this concern, and are

expanding with explicit “opt out” provision

South Carolina can expand without

committing to ever fund more than 10% of

the expansion

(36)

FY2013 Alternative to Expansion Would Drive State Further into Deficit

Gov. Haley & House Republicans propose spending $83 million to avoid expansion … would go to

hospitals as incentive to divert ER patients into free clinics

“They are going to spend $80 million and insure no one. We are going to spend zero dollars and insure half a million people.”

– Rep. Rutherford (D)

Kirk Brown, SC House Republicans Reject Democrats Effort to Expand Medicaid Program, INDEPENDENT MAIL

(March 12, 2013).

(37)

South Carolina v. Federal Medicaid Expansion Spending

Based upon best estimate participation. Source: Milliman ACA Impact Analysis 12/3/12

Medicaid Expansion Brings Significant Federal Funding to South Carolina

(38)

With or Without Medicaid Expansion, Federal

Reimbursement for Uncompensated Care Will Decline

~$14 billion decline over 5 years

Rising cost of uncompensated care in non-expansion states

will be detrimental to the economy.” - Republican Gov. Brewer, AZ

(39)

Lack of Insurance Leads to Uncompensated Care in Hospitals and Free Clinics

South Carolina Public Health Institute, A Report on the Uninsured and Underinsured in South

(40)

Without Expansion, Premiums

Will Rise for all South Carolinians

If SC doesn’t expand Medicaid, SC costs will increase … hospitals will have to pass cost of uncompensated care on to privately insured patients

“If you’ve got a private insurance card in your

pocket, look for your premiums to go up.” – Rep. Harry Ott

Adam Beam, Exclusive: SC Democrats Push 3-Year Test of Medicaid Expansion, THE STATE (March 9, 2013)

(41)

Without Expansion, Employers Will Face Higher

Tax Penalty for Failure to Offer Coverage

Tax penalty: If large employer (50+ full time employees) doesn’t offer affordable minimum essential coverage (employee share < 9.2% of

income; plan covers at least 60% cost of HC services) • Tax = $2,000 / employee who gets federal subsidy to

buy individual coverage on exchange if no coverage offered; $3,000 if inadequate coverage offered

Without Expansion: workers earning 100-138% FPL

are eligible for exchange subsidy; if on Medicaid, employer would not be taxed

(42)

Expansion is the Fiscally Conservative Option

“We have an obligation to provide an

adequate level of basic health care services

for those most in need in our state.

However, we also have an obligation to

ensure our state’s financial security.”

-New Mexico Gov. Martinez (R)

New Mexico Medicaid Expansion Will Move Forward, Republican Gov. Susana Martinez Announces,

(43)

Many newly eligibles are working FULL TIME, or senior citizens (currently choosing between paying utilities or

filling prescriptions)

Gov. Haley – visiting her mother in the hospital as the House debated Expansion– tweeting her gratitude that

House Republicans were “fighting to protect South Carolina from the looming public policy nightmare and fiscal disaster that is ObamaCare’s Medicaid expansion”

54% of Seniors in South Carolina support Expansion

Adam Beam, Exclusive: SC Democrats Push 3-Year Test of Medicaid Expansion, THE STATE (March 9, 2013)

Kirk Brown, SC House Republicans Reject Democrats’ Effort to Expand Medicaid Program, Independent Mail (March 12, 2013)

Challenge: If Economy is Improving,

(44)

“Growth in health care sector employment

should not be a goal of health reform.” - Keck

Over $14 Billion in federal dollars will flow into South Carolina through the Medicaid expansion.

It will result in significant increases in new business activity and job creation

(40,000 new jobs)

Adam Beam, Exclusive: SC Democrats Push 3-Year Test of Medicaid Expansion, THE STATE (March 9, 2013)

Anthony Keck, South Carolina’s View: the Affordable Care Act’s Medicaid Expansion is the Wrong

Approach, HealthAffairs Blog (Sept. 6, 2012)

Challenge: Economic Benefits of

Expansion are Not Important

(45)

Federal Money has a Multiplier

Effect on State Economies

• Every $1 billion federal Medicaid investment

generates up to $4.7 billion in new business

activity and nearly 47,000 new jobs in SC

• Most conservative estimate of effect: state’s $1.5

billion cost estimate from 2014-20 and only a 2:1 multiplier effect:

$29B in new “federally funded” business activity Hundreds of thousands of new jobs

* Klein, et al, Medicaid: Good Medicine for State Economies, May 2004, using Milliman ACA Impact Analysis Data, December 2012

(46)

If South Carolina

doesn’t expand

Medicaid, South

Carolinians’ federal

tax dollars will go to

(47)

We try to leave the politics out in the

hallway when we make these decisions.

In the end, it comes down to are you

going to allow your people to have

additional Medicaid money that comes

at no cost to us, or aren’t you? We’re

thinking, yes, we should.”

– New Mexico Gov. Dalrymple (R)

Jeffrey Young, North Dakota Medicaid Expansion Favored by Republican Governor, HUFFPOST BUSINESS (Jan. 15, 2013)

(48)

[W]e can bring our tax dollars back to

Missouri to strengthen Medicaid and reduce

costs for employers and families, or we can

send these dollars to other states and see

these costs skyrocket. … If we fail to act,

those jobs and those investments will go to

those other states:

they’ll get the benefit,

we’ll get the bill.”

- Missouri Gov. Nixon (R)

Press Release, During Visit to Warrensburg Chamber, Gov. Nixon Discusses Plan to Protect Taxpayers, Create Jobs by Strengthening Medicaid (March 15, 2013).

(49)

Moral Obligation to Support the Poor

It is our moral obligation, it is a duty that all of us are

bound, because we are Christians, we believe in God and God tell[s] us to treat the least of these as you would him. Denying them access to health care, denying them

insurance, is not how anyone should be treated.”

– SC House Minority Leader Todd Rutherford

I know it’s controversial. [But] we’re not ignoring the

weak … the Lord doesn’t want us to ignore them.”

– Ohio Gov. Kasich (R)

Adam Beam, SC House Rejects Medicaid Expansion, ISLAND PACKET (March 12, 2013) Joe Vardon, Kasich Implores GOP to Expand Medicaid, Columbus Dispatch (Feb. 20, 2013)

(50)

Part 3:

Massachusetts: A Preview of the

Impact of the Affordable Care Act

(51)

Massachusetts: A Post Health Care

Reform State in a Pre-Reform Country

Expanded Medicaid to individuals living

with HIV living at or below 200% FPL

(2001)

Heavily subsidized insurance for individuals

living at or below 300% FPL (2006)

Robust Medicaid benefits – just like ACA

(52)

Expansion Improve Health Outcomes

Notes: MA outcomes are based on Massachusetts and Southern New Hampshire HIV/AIDS Consumer Study Final Report, December 2011, JSI Research and Training, Inc.; National outcomes are based on Cohen, Stacy M., et. al., Vital Signs: HIV Prevention Through Care and Treatment — United States, CDC MMWR, 60(47);1618-1623 (December 2, 2011); For both MA and national outcomes, the percentages used are taken from a baseline of those infected, using the same estimated percentage diagnosed (82%) both nationally and for Massachusetts, based on the MMWR. The definition of “In Medical Care” may differ slightly between the MA data and the MMWR.

(53)

-25% -44% 2% -33% -50% -40% -30% -20% -10% 0% 10%

Percent Change in HIV Diagnosis Rate (2006-2009) Percent Change in HIV Death Rate (2002-2008)

MA U.S.

Percent Change in HIV Diagnoses and Death Rates (MA v. U.S.)

Sources: MA Dept of Public Health, Regional HIV/AIDS Epidemiologic Profile of Mass: 2011, Table 3; CDC, Diagnoses of HIV infection

and AIDS in the United States and Dependent Areas, 2010, HIV Surveillance Report, Vol. 22, Table 1A; CDC, Diagnoses of HIV infection and AIDS in the United States and Dependent Areas, 2008, HIV Surveillance Report, Vol. 20, Table 1A.

Expansion Reduces New Infections and AIDS Mortality

(54)

Expansion Reduces Costs

Source: MA Office of Medicaid, data request

reforms reduced HIV health care expenditures by ~$1.5 billion in past 10 years

(55)

Applying MA Experience to

South Carolina HIV Epidemic

16,378 South Carolinians living with HIV in

2010 (nearly 20,000 including undiagnosed)

38% of diagnosed received NO medical care in

2010

3,697 received prescription drugs through

ADAP in 2010 ($27,856,243)

1,428 (39%) will be newly eligible for Medicaid

1,091 (30%) will be eligible for subsidies on

exchange

HEALTH RESOURCESAND SERVICES ADMINISTRATION, US DEPT HEALTH & HUMAN SERVICES, South Carolina

SOUTH CAROLINA RYAN WHITE 2012 STATEWIDE COORDINATED STATEMENTOF NEED AND COMPREHENSIVE PLAN (June 2012)

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