The State Fiscal Crisis - Impact on Medicaid and the Uninsured

1
The State Fiscal Crisis - Impact on Medicaid and
the Uninsured

• Governors Health Care Summit - Montana
• Joan Henneberry, NGA
• September 25, 2003

2
Whats Happening in States?

• Medicaid bigger than Medicare
• Medicaid 20 of spending health care 27
• ME growth 9.3 in 03 was 12.8 in 02
• 78.4 billion deficit in 42 states
• 37 states with 5 gaps 19 with 10 gaps
• 32 states expecting Medicaid shortfall
• 50 states enacting cost containment plans

3
Major Reasons for ME Growth

• Fiscal crisis due more to fall in tax revenue
• Increase in caseloads
• Expensive caseloads
• Downturn in economy and higher unemployment
• Increase in Rx and medical technology
• Nursing homes and LTC

4
Cost Containment Approaches

• Enhancing Fraud and Abuse Efforts
• Increase cost-sharing
• Decrease reimbursements
• Change Benefits
• Change Eligibility
• Disease Management
• Rx Benefit

5
Prescription Drug Benefit

• Mandatory generic substitution
• Limit of Rx per month
• Preferred Drug Lists
• Prior Authorization
• Dispensing Fees and Payments
• Multi-agency purchasing
• Multi-state purchasing

6
Whats next?

• Increase in healthcare costs
• Revenue shortfalls
• Temporary fiscal relief
• Waivers to restructure
• Cuts to benefits and eligibility
• Cuts to other health programs