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
•
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
Part 1:
From Status Quo to
the Affordable Care Act
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
Rising Rates of Uninsured
See: http://www.gallup.com/poll/156851/uninsured-rate-stable-across-states-far-2012.aspx?version=print
South Carolina: One of the Highest Rates of Uninsured in the Country
• 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
• 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
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
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
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 &
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
• 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
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
Part 2:
Medicaid Expansion:
South Carolina ACA Implementation
Challenges and Opportunities
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
Challenge: Social Determinants of Health, Not Access to Care, Drive Disparities in SC
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?
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)
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 Carolina’s View: the Affordable Care Act’s 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
South Carolina Public Health Institute, A Report on the Uninsured and Underinsured in
South Carolina, August 2009
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
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
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
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)
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
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
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
South Carolina Public Health Institute, A Report on the Uninsured and Underinsured in South Carolina, August 2009
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)
“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
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
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”
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:
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
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).
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
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
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
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)
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
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,
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,
“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
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
If South Carolina
doesn’t expand
Medicaid, South
Carolinians’ federal
tax dollars will go to
“
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)
“
[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).
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)
Part 3:
Massachusetts: A Preview of the
Impact of the Affordable Care Act
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
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.
-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
Expansion Reduces Costs
Source: MA Office of Medicaid, data request
reforms reduced HIV health care expenditures by ~$1.5 billion in past 10 years
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)