Expanding Access to Health Care in Texas: Turning Affordable Care Act Challenges into Opportunities

Robert Greenwald Clinical Professor of Law

Director, Center for Health Law and Policy Innovation of Harvard Law SchoolJune 2014

Texas

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The Patchwork of Health Care Systems Allows Many Texans to Fall Through the Cracks

2

Employer-Based Private Health Insurance System Leaves Many Without Insurance Coverage

3

Insurance through employment doesn’t work for the unemployed, or many part-time, low wage or small business workers

“Small Businesses Hit Hard by Economy Consider Dropping Health Coverage,” New York Times, Feb 3, 2009

Source: Health Texas, Report on Senate Bill 10, Section 25, 80th Legislature Regular Session, Healthy Texas Phase II Report (http://www.tdi.texas.gov/reports/life/documents/hlthytxph2rpt09.pdf)

Low-Wage Workers and Small Business Owners in Texas are Increasingly Uninsured and Would be Eligible for Medicaid

4

For Texans Being Uninsured is Not a Short-Term Problem

Source: Families USA, Report 2009 (http://familiesusa2.org/assets/pdfs/americans-at-risk/texas.pdf) 5

High Rates of Uninsured is a Viscous Cycle Forcing More Texans to Drop Coverage

Source: Texas State Comptroller’s office.6

Current Medicaid Eligibility Rules in Texas Exclude Coverage of Most Childless Adults & Low-Income Families

Source: Texas Health and Human Service Commission 7

________

Discretionary Programs Do Not Keep Pace with Growth in Demand

8Source: National Association of State Mental Health Program Directors, 2012

Texas: The Largest Access to Care Crisis In the Nation

9

State Initiatives 2009-2012• Child Obesity Pilot Project : Obesity prevention program for

children enrolled in Medicaid/CHIP• Tailored Benefits: enrollment of children with disabilities into

managed care to improve their acute care services• Smoking Cessation: Pilot program that provides incentives to

Medicaid beneficiaries to lead healthy lives• Long-term Care Partnership: State and private insurers

partnership to encourage people to plan for their future long-term needs with purchase of high quality long term care plan

• Quality-Based Payment: Developing initiatives & options for increased quality based payment in Medicaid and CHIP to improve quality and efficiently provide care

• Section 115 Waiver: Provides incentive payments for health care improvements and directs more funding to some providers

Texas Has ImplementedSeveral Ground Breaking State Health Initiatives

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• Private health plans cannot drop people from coverage when they get sick

• No annual limits on coverage

• No lifetime limits on coverage

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

The ACA in Texas: Reformed Insurance and Reduced Discriminatory

Insurance Practices

The ACA in Texas: Reformed Insurance and Reduced Discriminatory

Insurance Practices

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• Texas’ federal run Marketplace provides access to private insurance plans that meet requirements related to transparency, coverage and cost, allowing consumers to compare plans as to coverage and cost

• Plans cannot charge higher premiums based on gender or health status

• Plans must include Essential Community Providers and Essential Health Benefits

• All plans sold in the Marketplace must provide federal subsidies for people with income between 100-400% FPL

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

ACA Promotes Access to Subsidized Private Health Insurance

ACA Promotes Access to Subsidized Private Health Insurance

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ACA Essential Health Benefits For All Newly Eligible Medicaid

Beneficiaries

For Most New Individual and Small Group

Private InsuranceBeneficiaries

All Marketplace Plans must Provide 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 • Pediatric services

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% Uninsured Texans

Sept. 2013 March 2014

24.8% 23.5%

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http://bakerinstitute.org/research/early-effects-affordable-care-act-health-insurance-coverage-texas-2014/

# Enrolled in Marketplace # Uninsured Enrolled in Marketplace

746,000 225,000

Texas Has Seen a Drop in Rate of Uninsured Through ACA Insurance

Texas Has Seen a Drop in Rate of Uninsured Through ACA Insurance

Change in States’ Uninsured Rates 2013-2014% uninsured

2013% uninsured

2014 Net change

Medicaid Expansion &

Partnership or State-based Marketplace

16.1% 13.6% -2.5%

No Expansion and/or Federal

Marketplace18.7% 17.9% -0.8%

15http://www.gallup.com/poll/168539/uninsured-rates-drop-states-embracing-health-law.aspx

The Failure to Fully Embrace the ACA has Reduced the Positive Impact on Increased Insurance Coverage

The Failure to Fully Embrace the ACA has Reduced the Positive Impact on Increased Insurance Coverage

Texas Rates of Uninsured Far Outpace the Nation

Source: http://www.gallup.com/poll/168821/uninsured-rate-drops.aspx; http://bakerinstitute.org/research/early-effects-affordable-care-act-health-insurance-coverage-texas-2014

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Direction of our Nation:Based On the Number of Uninsured Americans Pre-ACA

Direction of our Nation:Based On the Number of Uninsured Americans Pre-ACA

Sources: Center on Budget Policies and Priorities, The Number of Uninsured Americans is at an All-Time High (2006), Kaiser Family Foundation, The Uninsured: A Primer (2010); Kaiser Health News, Census: Uninsured Numbers Decline as More Young Adults Gain Coverage

0

10

20

30

40

50

60

2001 2005 2009 2012

41.2 Million46.6 Million 50.9 Million 48.6 Million

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Part 2Closing the Health Coverage Gap:

Using Medicaid Expansion Resources Is An Ongoing Opportunity for Texas

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Optional ACA Reforms to Close the Coverage Gap

• ACA allows states to expand eligibility to Medicaid by eliminating the disability requirement for those with income up to 138% FPL – Federal funds will pay 100% of costs until 2016, slowly

reduced to 90% in 2020 and beyond– States can op out at any time– Includes all low-income US citizens and legal immigrants

(after 5 years in US)

• However, based on Supreme Court decision federal government can’t withhold all federal Medicaid funds if a state refuses to implement Medicaid expansion

Medicaid expansion is optional and will be decided state-by-state 19

ACA Will Dramatically Decrease Uninsured Rates By Requiring Everyone to Have Health Insurance

Grey = Current Texas Medicaid Eligibility Red = Medicaid expansion onlyGreen = Medicaid expansion or subsidized private health insuranceBlue = Subsidized insurance only

Source: Texas Health and Human Service Commission20

ACA Implementation with Medicaid Expansion = Income-Based Early and Comprehensive Health Care Coverage

ACA Implementation

Source: Texas HHSC, Pink Book 2013

Medicaid expansion would provide health care to 2.6 million of the 5.5 million uninsured people in Texas. Many of these people are still uninsured and will be until Texas expands

Medicaid. The longer it waits, the higher cost on the state!

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Rice University research estimates that up to 4.4 million out of 5.5 million currently uninsured Texans will obtain insurance, with Texas seeing the largest gain in insurance coverage in the country

with only 5.8% of Texans remaining uninsured.

Challenge: Some See the Medicaid Expansion as Investing in a Low Value Program

“Medicaid is a broken system.”Kyle Janek, Texas Health and Human Services Executive Commissioner

12/18/12, Texas Medical Association

Medicaid Expansion is a new Medicaid program.The Medicaid Expansion isn’t a disability program. It is a prevention-

based early access to affordable health care program.

As Chief Justice Roberts stated in the ACA decision:

“Congress’s decision to so title it is irrelevant… The Medicaid expansion, accomplishes a shift in kind, not merely degree.“

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“Broken” Medicaid Program = Disability (Not a Health Care) Program for Low-income Uninsured

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00%

Prescription Drugs

Outpatient

Other Acute

Inpatient

Long Term Care

Source: Kaiser Family Foundation. Analysis of 2007 MSIS data provided by the Urban Institute (http://www.kff.org/hivaids/upload/8218.pdf)

% of Medicaid Expenditures by Type of Service

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Waiting for People to be Disabled Before Providing Access to Care is Unsustainable (The “Broken System” Argument)

Source: Texas Health and Human Services Commission, “Texas Medicaid and CHIP in Perspective: Seventh Edition”, 2009

ABD = aged, blind, disabled

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Most Insured Adults Worry About Health Care Costs: Poll,” Forbes.com, March 9, 2009.

Being Uninsured Results In Delayed Medical Treatment

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Early Access to Comprehensive Health Care Matters

• People with a usual source of care have better health outcomes and lower health care costs

• Having a usual primary care provider increases the likelihood that patients will receive appropriate and cost-effective health care

• Access to early preventive services prevents illness and detects disease at an earlier, often more treatable and less costly stage

See: http://www.healthypeople.gov/2020/default.aspx 26

Early Intervention Is Cost-Effective and Improves Both Individual and Public Health Outcomes

• Many interventions intended to prevent/control diabetes are cost saving or very cost-effective and supported by strong evidence.*

• Early intervention treatment for mental illness does not increase costs and is highly cost-effective when compared with standard care.**

• Clinical trial evidence has shown convincingly that pharmacological treatment of risk factors can prevent heart attacks and strokes.***

• A combination of increased screening and increased access to treatment could avert 300,000 HIV infections in the United States over 20 years or approximately 17% to 24% of new infections.****

Medicaid expansion is cost-effective early intervention with a focus on prevention

* 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 27

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MA Reform Demonstrates Successful ImplementationReduces New Infections and AIDS Mortality

MA reforms reduced HIV health care expenditures by ~$1.5 billion

Summary of Benefits of Closing the Coverage Gap in Texas

• If Texas closed the coverage gap both individual and public health benefits of preventive, early intervention health care will be realized– If Texas doesn’t expand access, costs will increase, as

disability-based care, and preventable high-cost interventions and hospitalizations will continue

• If Texas expands access uncompensated care costs will be dramatically reduced– If Texas doesn’t expand access uncompensated care costs

will continue to increase, with costs passed on to the insured and taxpayers

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Medicaid Expansion Is Increasingly Non-Partisan and Being Assessed on Its Merits

Twelve conservative Republican governors have now endorsed Medicaid expansion as cost saving and a great deal for their states

Nevada anticipates saving millions on mental health services and predicts the state would spend more money without expansion. Governor Sandoval, Nevada

Federal funds from Medicaid expansion boost state economies and will protect rural and safety net hospitals from being pushed to the brink.

Governor Brewer, Arizona

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.

Governor Dalrymple, North Dakota

Medicaid expansion will not only save money each year, we can expect revenue increases that will offset the cost of providing these services in the future.

Governor Martinez, New Mexico30

Several Governors are Saying No to the ACA Medicaid Expansion and Yes To Premium Assistance

• Several states have requested a waiver to use Medicaid funds as premium assistance to purchase coverage in Marketplace private insurance plans for some or all newly eligible beneficiaries

• CMS has said they will consider waivers as long as they meet the following requirements:• Must provide all benefit and cost-sharing protections guaranteed by

Medicaid coverage (beneficiaries cannot denied eligibility, enrollment in a plan or access to services for failure to pay copays or premiums)

• Total cost must be comparable to Medicaid expansion (with states paying all additional costs)

• Expansion population must have option to enroll in traditional Medicaid if medically frail (living with chronic illness or disability)

• Must be at least 2 QHPs to choose from

• Arkansas, Iowa, Michigan waivers approved; PA under review 31

Strategies for Promoting Expansion Through Premium Assistance Waivers

ARKANSAS•Premium assistance for private insurance for all (0-138%FPL) •Benefits must match Medicaid ABP (but Rx follows QHP formulary)IOWA•Medicaid managed care (0-100% FPL) & premium assistance (100-138% FPL)•Cost-sharing on enrollees > 100% FPL; plans to request > 50% FPL in 2015 •$10 copay for non-emergency ER use – limited to 5% of income•Benefits must match Medicaid ABP (but Rx follows QHP formulary)•No non-emergency transportation allowed even if in ABP (CMS review in 2015)MICHIGAN•Those 100-138% FPL contribute to health savings accounts (2% of income), with cost-sharing reduced through compliance with healthy behaviorsPENNSYLVANIA (not yet approved)•Proposes premium assistance for all, changes to benefits package and premiums similar to above, with an added voluntary work search program

Based on best estimate of participation. Source: Kaiser Family Foundation

In Terms of Funding: Medicaid Expansion Brings Significant Federal Funding to Texas

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Texas will receive the biggest share of federal expansion funds in the country = ~$120 billion in next decade

Healthcare Sector is an Economic Engine

What will $120 Billion in federal funds mean for Texas?

• According the Texas Hospital Association, every hospital dollar spent in Texas generates $2.3 in business activity

• Using this multiplier, over the first 10 years economic gains will include:

~ $276 Billion in general business activity~ 300,000 new jobs

Source: Fast Facts on Texas Hospitals, THA, 2012-2013 (http://www.tha.org/HealthCareProviders/Advocacy/Hospital%20Facts.pdf) 34

With Premium Assistance: Texas says no to Obama care, but uses federal funds

(including Texans’ tax dollars) to close the coverage gap, dramatically reduce rates of uninsured,

promote individual and public health, and generate economic growth and jobs in Texas.

Without Premium Assistance: The status quo continues and Texans’ federal tax dollars go to fund health care in states that expand

access to Medicaid like NY and CA.

Final Challenge: Doing What is Right For Texans

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Resources

www.healthcare.gov

www.statereforum.org

Center for Budget and Policy Priorities - www.cbpp.org

Center for Health Law and Policy Innovation - www.chlpi.org

Families USA - www.familiesusa.org

National Health Law Program – www.nhelp.org