Jennifer Vermeer

1
Implementing the Affordable Care Act in Iowa
Iowa Medicaid Perspectives

• Jennifer Vermeer
• Iowa Medicaid Director
• Iowa Department of Human Services
• November 11, 2010

2
Key Impacts for Iowa Medicaid

• Eligibility
• Expansion to 133 of the Federal Poverty Level
• 14,400 for family of 1 person or 19,400 for
  family of 2
• New income standard Modified Adjusted Gross
  Income
• Integration of Medicaid within the Benefits
  Exchange / Eligibility Gateway / seamlessness
• Benchmark benefit plan for new eligibles
• Other opportunities

3
Medicaid in Iowa today

• In FY 2010, Medicaid covered 549,093 Iowans
  (approximately 18 of Iowans).
• Total Expenditures (all funds) were 3.0 billion,
  State share 719 million.
• Paid over 23 million claims in an average of 6.6
  days.
• Contracts with over 38,000 health providers.
• Administrative cost of less than 5.
• Per person cost growth flat

4
Iowa Profile

• Recent expansions for children
• Expansion to 300 FPL in Medicaid and CHIP
  (hawk-i)
• Expansion to 300 FPL for pregnant women
• Efforts to streamline express lane,
  presumptive eligibility.
• Significant growth in Medicaid over past 2 years
  due to recession (approx. 60,000)
• 70-80 of growth is in number of children
• Coverage of adults limited to parents (less than
  28 FPL) and disabled (less than 75 FPL), some
  other small categories.

5
Medicaid Expansion 1/1/2014

• The ACA removes the categorical restriction in
  Federal law and mandates Medicaid coverage for
  ALL individuals up to 133 FPL.
• Financing Newly eligible enrollees
• 2014 to 2016 -100 federal funds
• 2017 to 2020 rate decreases on a schedule to
  90
• Expansion will increase Iowa Medicaid enrollment
  by estimated 80,000 to 100,000 adults (25)
• Parents (currently covered at 28 FPL)
• Some disabled (SSI group is at 75 FPL)
• Iowa covers 40,000 non-disabled single adults,
  childless couples up to 200 FPL under an 1115
  waiver called IowaCare. IowaCare is very limited
  coverage.

6
Eligibility Policy Options/Opportunities

• Current Medicaid coverage goes above 133 FPL for
  some groups
• Do we continue those groups?
• Enact option to create a Basic Health Plan
  between 133 FPL to 200 FPL?
• Move to the Exchange?
• Move some, not all?
• Wraparound?
• IowaCare planned phase-out
• Policy decisions for lawmakers

7
Eligibility Policy Options/Opportunities
8
ACA significantly restructures how Medicaid
eligibility will be done

• Dramatically different way of counting income
  Modified Adjusted Gross Income (MAGI)
• Iowa Today gross household income from which
  various deductions and disregards are applied
• MAGI is based on income tax guidelines (it is
  very different)
• New requirements for streamlining eligibility
  procedures
• No asset/resource tests for newly eligible and
  current adult and children groups

9
Coordination of Enrollment

• Eligibility Gateway ACA requires integration of
  eligibility and enrollment for Medicaid and the
  Exchange
• Common web-based application for Medicaid, CHIP,
  tax credits
• Exchange must screen applicants for Medicaid and
  CHIP and Medicaid/CHIP must accept referral
  without further review
• Medicaid must ensure referral to exchange for
  those found ineligible for Medicaid and CHIP
• Exchange may contract with Medicaid to determine
  eligibility for tax credit subsidies
• Potential for large duplication of effort,
  financial disputes between Medicaid eligibility
  processes and Exchange without an integrated
  approach

10
Operational Challenge Transforming the
Eligibility Process

• Current mainframe eligibility system is 30 year
  old system that has hardening of the arteries
  and uses a dead language
• Paper applications
• Labor-intensive reviews and work flow
• Off-system calculations and work-arounds
• Very inflexible, expensive to maintain and
  operate

Thanks to Andy Allison, KHPA Executive Director
11
Operational Challenge Transforming the
Eligibility Process
12
Operational Challenge Time

• Building eligibility systems and re-engineering
  processing across the state to wholly new methods
  and structures is very complex and takes a lot of
  time 3 years is not a lot of time
• DHS is beginning to research system and redesign
  options and planning
• Plan to provide options, budget estimates for the
  Governor and Legislature for FY 12 budget
  consideration
• Appears significant federal financing will be
  available for IT

13
Medicaid Expansion Benchmark Plan

• ACA mandates that new eligibles (those added
  under the expansion to 133 FPL) have at least a
  Benchmark Benefit Plan
• 100 Federal funds 2014-2016, phases down to 90
  match
• States have flexibility to design the plan
• What will we cover?
• Mental Health benefits? Opportunity to leverage
  higher Medicaid match rate to save on services
  currently 100 state and county funded, and
  impact MH populations in prisons and jails

14
Other Impacts

• Challenge of size managing the size and
  complexity of implementation and ensuring
  collaboration with other agencies, at a time of
  state budget shortages.
• Challenge of unknowns designing programs and
  processes at the same time the federal
  rules/guidance not available or are still being
  developed.
• IME operations
• Workload volume claims, medical review,
  member/provider assistance
• Prospect for new claims processing IT system at
  the same time
• Medicaid provider network capacity will there
  be enough providers?
• Primary care workforce
• Cost containment

15
Fiscal Impact

• Many unknowns remain much yet to be determined
• Potential for increased costs to state
• Mandatory Medicaid expansion
• Costs associated with developing and operating
  the Exchanges
• Changes to eligibility systems interoperability
  with Exchanges
• Restructuring of drug rebate programs
• Reduction in Disproportionate Share Hospitals
  (DSH) payments
• Potential for decreased costs to state
• Enhanced FFP
• Shifting current Medicaid populations in part or
  in whole to the Exchange
• Long Term Care options at enhanced federal match
• New Medicaid coverage at enhanced federal match,
  possibly replacing state-only or county-only
  funded programs

16
Opportunities

• The ACA includes provisions that are not
  mandatory, but include those that could assist
  states to implement improvements or re-balancing,
  such as
• New State Plan options
• Improvements in health care programs
• Mental Health
• Long Term Care
• Early Childhood Programs
• Demonstration grants
• Payment reform initiatives
• Integration of Other Transformation Initiatives
• Medical Home
• Health Information Technology (HIT)
• ICD-10 conversion

17
Questions?