Medicaid Restructuring and the Impact on HIVAIDS Care Recent Waiver and State Plan Changes

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Medicaid Restructuring and the Impact on HIV/AIDS
CareRecent Waiver and State Plan Changes
RWCA Training and Technical Assistance Grantee
Meeting 2006 Wardman Park Marriott,
Washington, DC August 28, 2006

• Jeffrey S. Crowley, M.P.H.
• Senior Research Scholar
• Health Policy Institute, Georgetown University
• jsc26_at_georgetown.edu / [phone]

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Framing the Policy Challenges

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Medicaid as the Bogeyman

• Medicaids detractors and critics have
  selectively used facts to make claims that
  justify radical change
• Medicaid is broken
• Medicaid spending is out of control
• Medicaid is crowding out other state
  prioritiessuch as education
• Medicaid, in its current form, is unsustainable

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Medicaid is a Success

• We need to counter distortions by publicly
  framing the issue
• Medicaid works for people with HIV/AIDS
• Medicaid supports national health policy goals
• Medicaid allows other parts of the health system
  to function
• Medicaid is a good deal for states
• Even in tight fiscal times, Medicaid is a good
  investment

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Most Current Challenges areBigger than Medicaid

• The major financing issues facing Medicaid
  programs stem from problems that are bigger than
  Medicaid and call for broader national solutions.
  Unresolved issues include
• Controlling health costs (across all payers) that
  consistently rise faster than inflation
• Financing access to new medical technology
• Establishing a national system for financing
  long-term services (to take pressure off
  Medicaid)
• Adapting to demographic changes

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A Tense Federal-State Partnership

• Ongoing Tension Federal oversight versus state
  flexibility
• Largest Source of Federal Financing States
  receive more federal dollars for Medicaid than
  for any other purpose
• Increasing Federal Responsibility Over time,
  federal government has assumed greater
  responsibility for costs that were previously
  seen as a state responsibility
• Overwhelming Burden of Medicare Medicares
  benefits package is inadequate and Medicaid
  supplements coverage for low-income Medicare
  beneficiaries42 of Medicaid spending is for
  services for Medicare beneficiaries
• Tax Cuts Create Fiscal Pressure Late 90s
  federal and state tax cuts have been major
  factors in recent budget crises

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Tax Cuts and Defense Largely Responsible for the
Federal Budget Crisis
Cost in 2005 of legislation enacted since January
2001
Source Center on Budget and Policy Priorities
calculations from Congressional Budget Office
data. Reflects costs above an adjusted CBO
current services baseline. Last revised February
3, 2005.
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Increasing Revenues Should bePart of the Policy
Debate
Federal Revenues as a Share of the Economy A
Historical Comparison (2004)
Source Center on Budget and Policy Priorities
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Two Approaches to State Medicaid Policy Change

• State Plan Amendments (SPAs) and Waivers

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What is a state plan?

• State Plan State Medicaid programs must operate
  according to federal law and rules a fundamental
  requirement is for the state to have a written
  plan that describes how the program will operate
  the state plan also specifies which optional
  eligibility categories and what optional services
  a state will cover
• Changes to the state plan are called state plan
  amendments (SPAs)

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What is a waiver?

• Waiver Federal permission for a state to operate
  its program without complying with specific
  requirements of the Medicaid Act Congress must
  authorize the Secretary to waive provisions of
  Medicaid Secretary has full discretion to deny
  waiver applications
• Section 1115 of the Social Security Act gives the
  Secretary the broadest authority to waive
  provisions of Medicaid to operate demonstration
  programs that promote the objectives of the
  Medicaid Act has been used by states to
  establish comprehensive statewide Medicaid
  initiatives such as the Arizona health care cost
  containment system and the Oregon health plan
• Other types of waiver authority exist (i.e.
  1915(c) waivers)

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SPAs and Waivers Compared

• SPA Features
• Federal Review In the past, a pro forma
  reviewIn new environment, feds have more
  discretion and SPAs should receive more careful
  review
• Public Input Weak process protections to
  guarantee public input, but in some states,
  strong advocacy has been able to give the public
  a meaningful role
• Role of Congress Given that Congress has
  already authorized SPA changes, has been harder
  to get Congressional delegation to weigh in with
  feds
• Cost SPAs can increase (or decrease) federal
  costs

• Waiver Features
• Federal Review Administration has broad
  discretion to approve or deny waiver requests
• Public Input Feds require public notice and
  opportunity for comment at state level public
  process generally does not involve critical
  financing issues no formal process for input at
  federal level
• Role of Congress Often difficult to engage
  Congress. In some cases, however, public
  pressure has led to active involvement of
  Congressional delegations in shaping state
  efforts and the federal response
• Cost Waivers are not supposed to increase
  federal costs

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Quick Look at the Past
Source Slide courtesy of Georgetown University
Center on Children and Families.
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Current Policy Questions

• Will new state Medicaid changes rely on SPAs or
  waivers?
• Does this matter?
• What can done to safeguard access to high quality
  HIV/AIDS care?

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Issues to Consider

• Policy Challenges vs. Ideological Agendas Will
  SPAs or waivers address the real issues facing
  Medicaid (i. e. enrollment growth, provider
  participation, adequate revenues,etc)?
• Federal-State Partnership What is the right
  balance between state flexibility and federal
  standards?
• Good Government Are changes (waiver and SPA
  changes) occurring with adequate evaluation,
  transparency, and accountability?
• Executive Discretion in Light of New Flexibility
  What is the appropriate role for waivers in
  light of the new flexibility granted by Congress

Source Slide courtesy of Georgetown University
Center on Children and Families.
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Examining Selected State Initiatives

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Arkansas Waiver

• An expansion (potentially) for adults (depends on
  employer)
• Limited Benefits/Inadequate for people with
  HIV/AIDS
• 6 outpatient visits, 2 outpatient 7 inpatient
  hospital days/year
• 2 prescription drugs/month
• Costs offset by changes for existing groups (e.g.
  cost- sharing or benefit changes)

Source Slide courtesy of Georgetown University
Center on Children and Families.
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Florida Waiver

• People (adults and children) receive a
  risk-adjusted premium amount to use to purchase
  private coverage among competing plans
• For adults, benefits will be what the plan is
  willing to provide for that premium amount,
  subject to limited state rules/oversight
• Defined (limited and pre-set) financial
  contribution
• Plans have unprecedented authority to set scope
  of services and control utilization in light of
  defined contribution
• No clear protections to account for higher costs
  or use of services for people with HIV/AIDS

Source Slide courtesy of Georgetown University
Center on Children and Families.
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Vermont Waiver

• Global commitment waiver caps federal funding for
  acute care services over 5-year waiver period
  (Generous cap other states unlikely to obtain
  such good terms from the feds
• State established itself as an MCO. It pays
  itself a premium (that it sets), and if it
  achieve savings, it can redirect excess revenue
  for other purposes
• Permits state to use federal funds for
  non-Medicaid programs
• Permits state to reduce benefits, increase
  cost-sharing, and limit enrollment or maintain
  waiting lists for most optional groups (although
  not for people with disabilities and elderly)
• Separate long-term care waiver

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Colorado Waiver

• Waiver proposal/ not yet approved
• Tiering benefits
• Simplifying eligibility
• Disease management
• Legislature became engaged
• Most of the positive/ less controversial
  initiatives could be done without a waiver
• Waiver financing downsides examined

Source Slide courtesy of Georgetown University
Center on Children and Families.
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West Virginias DRA SPA

• Aimed at promoting healthy behaviors
• 3 out of 4 people subject to new plan are
  children
• Health plans and providers must monitor and
  report
• Persons that do not meet healthy behaviors
  subject to limited benefits that excludes
  diabetes care, mental health services,
  prescription drugs (above cap)
• People with HIV/AIDS (in program as disabled)
  have a right to remain in regular Medicaid, but
  not publicized to beneficiaries, and could be
  subjected to new and higher cost-sharing

Source Slide courtesy of Georgetown University
Center on Children and Families.
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Kentuckys DRA SPA

• Higher cost sharing and new soft limits on use
  of services
• 4 different benefit packages tailored to
  various populations no recognition of needs of
  people with HIV/AIDS
• Enhanced benefits for people exhibiting healthy
  behaviors
• As with West Virginia, enhanced benefits include
  core health care benefits that should not be
  denied for failure to meet states behavior goals
  and people with HIV/AIDS (in program as
  disabled) have a right to remain in regular
  Medicaid, but could be subject to new, higher
  cost-sharing

Source Slide courtesy of Georgetown University
Center on Children and Families.
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Key Themes in DRA and Recent Waivers

• Personal Responsibility Consumer choice of
  plans increased premiums and/or cost sharing
  and behavior modification through incentives
• Tailored benefits Varied benefits by
  population
• Increased role of private marketplace Increased
  control to private for-profit plans to determine
  benefit packages
• Increasing spending predictability Defined
  contribution approaches aggregate caps on
  federal funding and increased ability to
  limit/reduce coverage
• More challenging advocacy environment Confusion
  about the rules of the game limited public
  information substantial controversy and loss of
  state legislative input

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An HIV/AIDS Response to this New Environment

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Ensuring a Good Deliberative Process for Making
Policy

• HIV community cannot focus on just federal or
  state levels both environments important
• State legislators are important potential allies
  go to them with questions and concerns encourage
  them to become engaged
• Insist on transparent process and real public
  input if a governor is pushing radical reform
  slow things down to allow time for people to
  analyze the policy choices
• HIV community leadership is important, but
  working in broad-based coalitions essential

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HIV Policy Goals in theContext of Reform

• Most recent reform efforts have not targeted
  HIV/AIDS, but have had major HIV/AIDS
  implications Therefore, major goal needs to be
  to educate policymakers about HIV impacts
• Emphasize HIV clinical practice standards as the
  standard of care that must be protected
• Use public health arguments to counter reforms
  that provide inadequate benefits to people with
  HIV/AIDS
• In particular, may be necessary to push for
  enhanced pharmaceutical coverage for people with
  HIV/AIDS
• Major goal needs to be to apply policy to real
  world for a person with HIV, what
  will this mean?