Healthcare Payment Systems & Policy: Medicaid & CHIP

1
Healthcare Payment Systems PolicyMedicaid
CHIP

• Kimberly Davis
• Policy Advisor for Policy Development
• Medicaid/CHIP Division

2
Overview

• Medicaid CHIP Background
• Benefits
• Eligibility Enrollment
• Costs Financing
• Delivery Models
• Texas Specifics
• Current HHSC Initiatives

3
Medicaid CHIP Overview
4
Medicaid What is it?

• Provides medical coverage to eligible individuals
  primarily
• Low-income families
• Non-disabled children
• Related caretakers of dependent children
• Pregnant women
• People age 65 and older
• People with disabilities
• Entitlement program no enrollment limitation

5
Medicaid What is it?

• Federal / State Program
• Funded jointly by state and federal governments
• Administered by states
• Subject to federal law and regulation
• Requires coverage of certain populations and
  services
• Allows states to cover additional populations and
  services

6
Medicaid Who runs it?

• Federal level
• Centers for Medicare Medicaid Services (CMS)
• Within the U.S. Department of Health and Human
  Services
• Kathleen Sebelius Secretary of Health and Human
  Services
• Cindy Mann Director, Center for Medicaid and
  State Operations
• Texas level
• Administered by single state agency HHSC
• Billy Millwee Texas State Medicaid Director
• Single point of contact with federal government
• Establishes Medicaid Policy
• Administers state plan or agreement with the
  federal government
• Administers Medical Care Advisory Committee
  (MCAC) mandated by federal Medicaid law

7
Medicaid in the Federal Budget, Federal Fiscal
Year 2009
8
Medicaid State Plans State Federal Program

• State Plans agreements with federal government
  on
• Eligibility
• Services
• Program administration
• Financial administration
• Other program requirements
• State Plan Amendments (SPA) requests to CMS to
  change
• Optional services provided, or
• Manner benefits are offered.

9
Medicaid Waivers State Federal Program

• Waivers state request to CMS for permission to
  deviate from certain requirements, often to
• Provide services beyond those in state plan.
• Limit geographical areas.
• Limit free choice of providers.
• Implement innovative new service delivery and
  management models.
• Common Types of Medicaid Waivers
• 1115 Waiver Research and Demonstration Test
  policy innovations likely to further Medicaid
  program objectives.
• 1915(b) Waiver Freedom of Choice Allow states
  to implement managed care delivery systems or
  otherwise limit individuals' choice of provider
  under Medicaid (i.e. STARPLUS).
• 1915(c) Waiver Home and Community-Based
  Services Waive Medicaid provisions to deliver
  long-term care services and supports in community
  settings as an alternative to institutional
  settings.

10
CHIP What is It?

• Childrens Health Insurance Program (CHIP)
• Medical coverage for uninsured children up to age
  19.
• Joint state-federal program, either
• Extension of state Medicaid program
• Separate program
• Federal funding
• Limited to block grant amounts allocated to each
  state.
• Not entitlement program, so states can
• Determine age and income eligibility.
• Cap enrollment.
• Limit service benefits (as approved by HHS).

11
Medicaid Benefits Acute and Long-Term Care

• Acute Care
• Physician, inpatient, outpatient, pharmacy,
  behavioral health, lab, X-ray services
• Health care for children and pregnant women for
  episodic health care needs.
• Long-Term Services and Supports
• Chronic health conditions requiring ongoing
  medical care often social support.
• Includes care
• In facilities, e.g. nursing homes
• For behavioral health conditions
• Distinction based on
• Cognitive and medical condition
• Need for assistance with activities of daily
  living
• Degree to which a disability is chronic
• Nature of services provided
• Setting in which services are provided

12
Medicaid Benefits Mandatory vs. Optional

• Mandatory
• Inpatient hospital services
• Outpatient hospital services
• Early and Periodic Screening, Diagnostic, and
  Treatment (EPSDT) services
• Nursing facility services
• Home health services
• Physician services
• Rural health clinic services
• Federally qualified health center services
• Laboratory and X-ray services

• Family planning services
• Nurse midwife services
• Certified pediatric and family nurse practitioner
  services
• Freestanding birth center services (when licensed
  or otherwise recognized by the state)
• Transportation to medical care
• Smoking cessation for pregnant women

13
Medicaid Benefits Mandatory vs. Optional

• Optional
• Prescription drugs
• Clinic services
• Physical therapy
• Occupational therapy
• Speech, hearing and language disorder services
• Respiratory care services
• Other diagnostic, screening, preventive and
  rehabilitative services
• Podiatry services

• Optometry services
• Dental services
• Dentures
• Prosthetics
• Eyeglasses
• Chiropractic services
• Other practitioner services
• Private duty nursing services
• Other services approved by HHS Secretary

14
CHIP Benefits

• Inpatient hospital services
• Outpatient hospital ambulatory services
• Lab X-ray
• Surgical medical physician / physician extender
  services (including immunizations well-baby /
  well-child exams)
• Emergency services
• Prescription drugs
• Behavioral health substance abuse benefits

• Physical / speech / occupational therapy
• Home health
• Transplants
• Durable medical equipment
• Dental services
• Hospice care services
• Skilled nursing facilities
• Vision (eye exams / eyeglasses)
• Chiropractic services
• Tobacco cessation

15
CHIP Benefits

• Perinatal benefits limited, basic prenatal care
  including
• Prenatal postpartum visits
• First 28 weeks of pregnancy 1 visit every 4
  weeks
• 28 to 36 weeks of pregnancy 1 visit every 2-3
  weeks
• 36 weeks to delivery 1 visit per week
• Delivery
• Hospital facility charges
• Professional services charges
• Other
• Pharmacy (based on CHIP formulary)
• Prenatal vitamins
• Limited laboratory testing
• No cost-sharing requirements

• 2 postpartum visits
• Additional visits if medically necessary

Assessments Planning services Education
and counseling
16
Income and Federal Poverty Levels

• Federal Poverty Level (FPL)
• Compared to familys income level.
• Basis for Medicaid financial eligibility.
• Intended to identify the minimum amount of income
  a family would need to meet certain, very basic,
  family needs.
• Indicate annual income levels by family size and
  are updated each year by the U.S. Department of
  Health and Human Services.

17
Federal Poverty Income Levels, 2011
U.S. Department of Health and Human Services
poverty guidelines based on annual income
Family Size 100 FPL 1 10,890 2
14,710 3 18,530 4 22,350 5
26,170 6 29,990 7 33,810 8 37,630
At 100 of poverty, for families larger than 8,
add 3,820 for each additional person.
SOURCE  Federal Register, Vol. 76, No. 13,
January 20, 2011, pp. 3637-3638
18
Medicare and Medicaid Eligibility

• Medicaid
• Jointly funded by federal and state government
• Administered by state
• Eligibility
• Low-income individuals
• Pays for most long-term care services
  supports

• Medicare
• Federally funded
• Federally administered
• Eligibility
• People age 65
• People with disabilities
• People with end stage renal disease

19
Medicaid Medicare Dual Eligibles

• Dual eligibles
• Individuals who are aged or disabled (Medicare
  eligible) AND
• Limited income (eligible for some Medicaid
  coverage)
• Full Dual Eligibles
• Entitled to Medicaid benefits that Medicare does
  not cover.
• Include low-income individuals who are aged or
  disabled in community, waiver programs, nursing
  homes, and state schools.
• Other Dual Eligibles
• Eligible only for Medicaid payments for Medicare
  premiums, deductibles, and coinsurance for
  Medicare services.
• Not entitled to Medicaid services.
• Include several categories of eligibility
  incomes generally up to 135 of FPL.

20
CHIP Eligibility

• CHIP covers children in families who
• Have too much income or too many assets to
  qualify for Medicaid.
• Cannot afford to buy private insurance.
• Generally are below 200 of the FPL.
• States can design their CHIP program as
• Medicaid expansion (7 states, D.C. and 5
  territories)
• Separate from Medicaid (17 states)
• Combination of the two approaches (26 states)

21
Medicaid CHIP Texas Specifics
22
Texas Medicaid Organization
23
Texas Medicaid Optional Benefits

• The state may choose to provide some, all, or no
  optional services specified under federal law.
• Optional services provided in Texas include
• Prescription drugs
• Physical therapy
• Occupational therapy
• Targeted case management
• Some rehabilitation services
• Certified Registered Nurse Anesthesiologists
• Eyeglasses/contact lenses
• Hearing aids
• Services provided by podiatrists
• Certain mental health provider types

24
Texas Medicaid Pharmacy Benefits

• HHSC Vendor Drug Program performs most pharmacy
  services functions, including policy and program
  oversight, formulary management, and pharmacy
  customer services.
• Texas contracts with private companies for
• Pharmacy claims processing
• Prior authorization services
• Administration of drug rebate program
• Texas contracts with pharmacies to provide
  Medicaid clients with pharmacy benefits.
• Over 4,200 licensed Texas pharmacies are under
  contract.
• Beginning March 2012, managed care organizations
  (MCOs) will be responsible for providing pharmacy
  benefits to their members

25
Texas Medicaid Womens Health Program (WHP)
Benefits

• Certain screenings related to family planning
• Pregnancy test
• Rubella antibody test
• Routine urinalysis
• Urine culture
• Complete blood count (CBC)
• Hemoglobin and hematocrit tests
• Blood typing
• Blood glucose screening
• Lipid panel
• Thyroid stimulating hormone test

• Annual family planning exam Pap smear
• Follow-up visit, if related to contraceptive
  method
• Counseling on specific methods use of
  contraception
• Female sterilization
• Follow-up visits related to sterilization
• Sexually Transmitted Infection (STI) Screenings

26
Texas Medicaid Womens Health Program (WHP)
Benefits

• Services not covered through WHP
• Mammography - screens for breast cancer are
  limited to a clinical breast exam.
• Treatment for any conditions diagnosed during a
  WHP visit.
• Visit for pregnancy test only.
• Visit for STI test or treatment only.
• Follow-up after an abnormal Pap test.
• Counseling on and provision of emergency
  contraceptives.
• Referrals made for medical problems to providers
  that perform elective abortions.
• Other visits that cannot be appropriately billed
  with one of WHP- allowable diagnosis codes.

27
Texas CHIP Benefits

• Inpatient general acute rehabilitation hospital
  services
• Surgical services
• Transplants
• Skilled nursing facilities
• Outpatient hospital, comprehensive outpatient
  rehabilitation hospital, clinic ambulatory
  health care center services
• Physician/physician extender professional
  services (including well-child exams preventive
  health services)
• Laboratory radiological services
• Durable medical equipment, prosthetic devices,
  disposable medical supplies
• Home community-based health services
• Nursing care services

• Inpatient mental health services
• Tobacco cessation
• Outpatient mental health services
• Inpatient residential substance use treatment
• Outpatient substance use treatment
• Rehabilitation and habilitation services
• Hospice care services
• Emergency services
• Emergency medical transportation
• Care coordination
• Case management
• Prescription drugs
• Dental services
• Vision
• Chiropractic services

28
Texas CHIP Perinatal Program

• Provides prenatal post-partum care to pregnant
  women ineligible for Medicaid due to
• income (whose income 186-200 FPL), or
• immigration status (with income below 200 FPL).
• Upon delivery, CHIP Perinatal newborns in
  families
• With incomes at or below 185 FPL
• are deemed to Medicaid
• receive 12 months of continuous Medicaid coverage
• With incomes above 185 FPL up to 200 FPL
• remain in CHIP Perinatal Program
• receive CHIP benefits for the remainder of the
  12-month coverage period
• Members receiving CHIP Perinatal benefits are
  exempt from
• 90-day waiting period, asset test all
  cost-sharing, including enrollment fees co-pays

29
Medicaid Benefits Compared to Private
Employer-Sponsored Coverage
30
Texas Medicaid Eligibility

• Medicaid serves
• Low-income families
• Non-disabled children
• Related caretakers of dependent children
• Pregnant women
• People age 65 and older
• People with disabilities
• Texas Medicaid does not currently serve
• Non-disabled, childless adults

31
Texas Medicaid Eligibility Percent of FPL June
2010
32
Texas Medicaid Womens Health Program (WHP)
Eligibility

• WHP Eligibility Criteria
• Ages 18 44.
• U.S. citizens qualified immigrants.
• Reside in Texas.
• Not eligible for full Medicaid benefits, CHIP, or
  Medicare.
• Not pregnant.
• Not sterilized, infertile, or unable to get
  pregnant due to medical reasons.
• No private health insurance coverage covering
  family planning services.
• Exception if filing a claim would cause physical,
  emotional, or other harm from a spouse, parent,
  or other person.
• Countable household income at or below 185 FPL.

33
Texas CHIP Eligibility

• General eligibility
• Uninsured children under age 19.
• CHIP Perinatal serves unborn children meeting
  eligibility requirements.
• Gross income up to 200 FPL.
• U.S. citizens or legal permanent residents.
• Not eligible for Medicaid.
• Families with net incomes above 150 FPL must
  meet assets criteria
• Assets below 10,000.
• One vehicle is exempt up to 18,000 additional
  vehicles are exempt up to 7,500.
• Eligibility is determined for a 12-month period
  income verification at 6th month for families at
  185 FPL and above
• CHIP Perinatal eligibility is determined for a
  12-month period

34
Texas Medicaid Enrollment

• The Texas Medicaid program has grown considerably
  in recent years.
• Texas Medicaid now serves over 3.4 million people
  out of a total population of about 25 million (as
  compared to 2.8 million in 2006).
• Persons who are aged, blind or disabled
  represent
• 25 of Texas Medicaid recipients.
• 58 of Texas Medicaid costs.
• They often have complex medical conditions,
  needing both
• Acute care (e.g. hospitalization, outpatient
  services, and laboratory), and
• Long term services and supports (LTSS) provided
  in the home or community (e.g. assistance with
  daily living, skilled nursing, and therapy
  services).

35
Texas Medicaid Historical Enrollment
History of Medicaid Eligibility Caseload
September 1977- August 2010
36
Texas Medicaid Enrollment by Age, State Fiscal
Year 2009
37
Texas Medicaid Enrollment Spending

• June 2011, 3.3 million people received Medicaid.
• Over 2.3 million are children.
• Over 700,000 are individuals who are aged, blind,
  or disabled.
• Texas Medicaid beneficiaries expenditures,
  state fiscal year 2009

38
Texas Medicaid State Budget

• Medicaid spending
• FY 2010-2011
• 44.9 billion from all fund sources
• 18.8 billion from General Revenue (GR),
  GR-Dedicated, and Tobacco Settlement Receipts
• 75 of all appropriations for HHS

39
Texas Medicaid Historical Spending
16.1 B
Federal Spending
8.6B
State Spending
40
Texas CHIP Enrollment Spending

• How many children in Texas are enrolled CHIP?
• Caseload for June 2011 539,137 children
• How much is spent on CHIP?
• Total state fiscal year 2010 budgeted for CHIP
• 815.6 million from all fund sources
• 270.2 million from GR
• Based on FY 2010 Operating Budget.  Includes
  all traditional CHIP costs client service costs
  for federally funded children, legal immigrants,
  school employee children, and vendor drugs
  administrative and operating expenses.

41
Texas CHIP Average Monthly Enrollment, State
Fiscal Year 2000-2010
42
Texas CHIP Enrollment by Age, State Fiscal Year
2010
43
Texas CHIP Perinatal Program Enrollment, State
Fiscal Year 2007-2010
44
Texas Medicaid FMAP

• Federal Medical Assistance Percentages (FMAP)
• Portion of total Medicaid costs paid by the
  federal government.
• Texas FMAP for federal fiscal year 2012 58.42
• Of each dollar spent on Medicaid services in
  Texas, the federal government pays approximately
  58 cents.
• Based on average state per capita income compared
  to the U.S. average.
• Small changes in the FMAP could result in
  significant loss or gain of federal funds.

45
Texas Medicaid DSH Payment

• Medicaid Disproportionate Share Hospital (DSH)
  Program
• Source of reimbursement to state-operated and
  non-state (local) Texas hospitals that treat
  indigent patients.
• Federal law requires that state Medicaid programs
  make special payments to hospitals that serve a
  disproportionately large number of Medicaid and
  low-income patients.
• Not tied to specific services for
  Medicaid-eligible patients, unlike other Medicaid
  payments.
• Total funds to all DSH hospitals in state fiscal
  year 2009 1.615 billion
• State DSH Hospitals 339 million
• Non-state DSH Hospitals 1.276 billion

46
Texas Medicaid UPL Payment

• Upper Payment Limit (UPL)
• Financing mechanism used by states to provide
  supplemental payments to hospitals or other
  providers.
• Federal regulations allow states to pay providers
  up to what Medicare would have paid, or the
  amount the hospital charges for services.
• States may use local funds transferred to the
  state to fund the supplemental payments.
• HHSC currently makes UPL payments to
• 4 state-owned hospitals
• 11 non-state large urban public hospitals
• 100 non-state owned rural public hospitals
• 7 childrens hospitals
• 11 state university physician group practices
• unknown number of privately-owned hospitals in
  Private Hospital UPL program

47
Texas CHIP EFMAP

• Enhanced Federal Medical Assistance Percentages
  (EFMAP)
• Portion of total CHIP costs paid by the federal
  government.
• Generally higher than Medicaid
• In 2012, the federal government pays 70.89 of
  CHIP medical care expenditures
• Compared to 58.42 of Medicaid medical care
  expenditures.

48
Texas CHIP Historical Spending, State Fiscal
Year 2000-2010
49
Texas CHIP Cost Sharing

• CHIP annual enrollment fee
• 0 for families with net income less than 150
  FPL
• 35 for families between 151-185 FPL
• 50 for families between 186-200 FPL
• Families are required to pay the enrollment fee
  upon enrollment or renewal of CHIP.

50
Texas CHIP Cost Sharing

• Families enrolled in CHIP are responsible for
• co-payments for certain plan benefits.

51
Texas Medicaid Womens Health Program (WHP)
Savings

• In 2008, WHP saved
• 63 million (all funds) due to reduction in
  expected births.
• 42.4 million (all funds) after paying program
  costs.
• State share of reduced Medicaid costs totaled
• approximately 23.5 million (GR)
• net state share of savings after paying WHP
  expenditures totaled approximately 21.4 million
  (GR)

52
Medicaid Delivery ModelsManaged Care vs. FFS

• Managed Care Programs in Texas
• STAR provides acute care services to children,
  pregnant women, and families.
• STARPLUS provides acute and long-term services
  and supports to individuals with disabilities and
  elderly people.
• NorthSTAR provides behavioral health services
  to individuals in a multi-county area in and
  around Dallas.
• STAR Health provides a comprehensive managed
  care program for children in foster care.
• Fee-for-Service (FFS)/Traditional Medicaid
• A few eligibility categories remain in FFS.
• Individuals in FFS can choose any provider.
• FFS does not offer the management or utilization
  controls that managed care provides.

53
Provider Reimbursement Managed Care vs. FFS

• Payment and processes vary by delivery model
• Managed Care
• HHSC pays MCOs a capitated rate.
• MCOs pay providers reimbursement rates
  established by contracts with the providers.
• Providers send claims (bills for services) to the
  MCO for payment.
• FFS
• HHSC establishes FFS methodologies to pay
  providers.
• Claims are sent to state for payment.

54
Texas CHIP Delivery Systems

• CHIP Service Delivery Models include
• MCO A type of health care plan that arranges
  for or provides benefits to covered clients
• The state pays the CHIP MCOs on a capitation
  basis a set dollar amount PMPM to cover the
  health care costs of clients.
• Client selects an MCO and a Primary Care Provider
  (PCP)
• PCP authorizes services within the network
• Providers are paid reimbursement rates
  established by the MCO
• Exclusive Provider Organization A health plan
  that arranges for or provides benefits to covered
  persons through a network of exclusive providers
• Limited to services provided to client in
  network, except for emergencies.
• Dental Maintenance Organization for dental
  services

55
Medicaid CHIP New Initiatives
56
Budget-Related Outcomes of the 82nd Texas
Legislature

• Summary of Medicaid Funding for FY 2012-13
• 40.6 billion in All Funds (17.1 billion in GR).
• Assumes expansion of managed care, anticipated to
  result in a net savings of 385.7 million GR and
  increases in insurance premium tax revenue
  collections.
• Funding levels continue provider rate reductions
  implemented during the 2010-2011 biennium,
  including an 8 hospital rate reduction.
• Cost containment initiatives totaling 1.8
  billion in GR funds, including 450 million
  assumed in Rider 61.

57
Budget-Related Outcomes of the 82nd Texas
Legislature

• Statewide Standard Dollar Amount (SDA)
• Converted hospital reimbursement from a
  hospital-specific, cost-based reimbursement to a
  statewide base SDA effective September 1, 2011.
• HHSC worked closely with hospital industry to
  develop the statewide SDA.
• Add-on adjustments for hospital wages, medication
  education, and trauma centers to recognize
  high-cost services and geographic variations.
• Hold Harmless
• HHSC authorized to use up to 20 million in
  GR(48.1 million all funds) to mitigate losses
  to hospitals that are disproportionately
  impacted.
• Funding available up to September 1, 2012.

58
Budget-Related Outcomes of the 82nd Texas
Legislature

• Medicare Equalization
• Past Texas Medicare-Medicaid Policy
• Part A - State limits Medicare coinsurance and
  deductible payments to no more than the Medicaid
  rate for the same service.
• Part B - State makes Medicare coinsurance and
  deductible payments. Total payment for service
  may exceed Medicaid rate.
• As of January 2012
• The 2012-13 General Appropriations Act directs
  HHSC to align payment policies for Medicare Part
  A and B cost sharing.

59
Initiatives from the82nd Texas Legislature

• Managed Care Expansion
• September 1, 2011
• Expanded existing STAR and STARPLUS service
  areas to contiguous counties.
• March 1, 2012
• Expand STAR to new service areas.
• Expand STARPLUS to new service areas.
• Replace TX Primary Care Case Management Program
  (PCCM) with a capitated MCO program.
• Carve the pharmacy benefit into the services
  delivered by the Medicaid and CHIP MCOs.
• Develop statewide Medicaid dental MCOs.

60
Initiatives from the82nd Texas Legislature

• Reduce inappropriate utilization of Emergency
  Departments (ED) by Medicaid recipients
• ED hospital rates
• As of September 1, 2011, HHSC applied a 40
  reduction to facility charges for non-emergent
  services delivered in an ED setting to recipients
  of Medicaid FFS
• Medicaid cost-sharing
• Encourage personal accountability and appropriate
  use of health care services.
• Cost-sharing includes non-emergency services
  through a hospital ED.
• HHSC is researching options for implementation.
• Target implementation date is December 2012.
• Develop incentives though MCOs for providers to
• Offer evening and weekend hours, and
• Educate recipients about appropriate Emergency
  Department utilization.

61
Initiatives from the82nd Texas Legislature

• Quality Initiatives
• Shift to paying for outcomes and quality instead
  of volume.
• Quality-based payments for hospitals and managed
  care.
• Policy changes
• Example Ending Medicaid payments for elective
  deliveries prior to 39 weeks.
• S.B. 7 established
• Quality-Based Payment Advisory Committee
• Texas Institute of Health Care Quality and
  Efficiency

62
Healthcare Transformation 1115 Waiver

• Texas Health Care Transformation and Quality
  Improvement Program 1115 Waiver includes
• Managed care expansion
• Expands Medicaid managed care services statewide.
• Includes legislatively mandated pharmacy carve-in
  and dental managed care.
• Hospital financing component
• Preserves hospital funding under a new
  methodology.
• Creates Regional Healthcare Partnerships (RHPs).

63
Healthcare Transformation 1115 Waiver

• Under the waiver, trended historic UPL funds and
  additional new funds are distributed to hospitals
  through two pools
• Uncompensated Care Pool
• Costs of care provided to individuals who have no
  third party coverage for the services provided by
  hospitals or other providers (beginning in first
  year).
• Delivery System Reform Incentive Payments
• Support coordinated care and quality improvements
  through RHPs to transform care delivery systems
  (beginning in later waiver years).

64
Healthcare Transformation 1115 Waiver Pool
65
Healthcare Transformation 1115 Waiver

• RHPs
• Will form around hospitals currently receiving
  UPL payments.
• Will develop plans to address local delivery
  system concerns with a focus on improved access,
  quality, cost-effectiveness, and coordination.
• Must provide opportunities for public input in
  plan development and review.
• Should encourage broad engagement of local
  stakeholders in RHPs.

66
Chronic Conditions Waiver

• S.B. 1, 82nd Legislature, First Called Session,
  2011
• If feasible and cost-effective, HHSC may apply
  for a waiver to more efficiently leverage use of
  state and local funds.
• Would provide benefits to individuals eligible to
  receive services through the county for chronic
  health conditions.
• Requires broad-based input from interested
  persons.
• Must use intergovernmental transfers to maximize
  federal Medicaid matching funds.

67
Affordable Care ActMedicaid Expansion

• Medicaid eligibility expands to include
  individuals under age 65 with incomes up to 133
  FPL
• Includes income deduction of 5 percentage points,
  creating effective eligibility level of 138 FPL.
• In 2014, Texas will experience 1.8 million
  increase in caseload.
• New client populations in Texas include
• Parents and caretakers at 14 - 133 of FPL
• Childless adults up to 133 FPL
• Emergency Medicaid in expansion populations
• Children in foster care through age 25
• Federal government bears full cost of coverage
  for new eligibles for first 3 years of mandatory
  expansion.

68
Current Estimated Future Medicaid/CHIP
Eligibility Levels
Current Medicaid 225 FPL
CHIP 200 FPL
CHIP 200 FPL
CHIP 200 FPL
CHIP 200 FPL
Current Medicaid 185 FPL
Current Medicaid 185 FPL
Current Medicaid 185 FPL
NEW Medicaid (Currently CHIP) 133 FPL
NEW Medicaid 133 FPL
133
Current Medicaid 133 FPL
NEW Medicaid 133 FPL
Current Medicaid 100 FPL
Current Medicaid 74 FPL
14 FPL
69
Affordable Care Act Eligibility Changes

• State Health Benefit Exchange (HBE)
• The law requires each state to have a HBE.
• If a state chooses not to operate a HBE, the
  federal government will operate an HBE for the
  state.
• Texas has not yet decided whether or not it will
  operate an HBE.
• Medicaid, CHIP, and the HBE must interface.
• Applications through the HBE must be deemed to
  Medicaid and CHIP with no additional required
  action by the applicant.

70
Affordable Care ActMedicaid Benchmark Benefit

• Federal law allows for a Medicaid benchmark
  benefit that
• Will be provided to the new Medicaid adult
  expansion population in 2014,
• May be different from the regular Medicaid
  benefit package,
• Must include essential health benefits (EHB), as
  defined by federal Department of Health and Human
  Services (HHS).
• In December 2011, HHS released initial guidance
  on EHB.
• Additional guidance specific to Medicaid is
  forthcoming.
• HHSC is reviewing the guidance and researching
  options for Texas while awaiting additional
  guidance.
• Texas will seek stakeholder input while
  developing the benchmark benefit.

71
Texas Health Care Coverage Post ACA
Implementation
Estimated Insured but not Subsidized (In or Out
of Exchange) 15.5 million
of Federal Poverty Level
Estimated Insured Subsidized in Exchange 1.9
million
Estimated Medicaid/CHIP 5.6 million
Estimate of Ongoing Uninsured 2.3 million
72
Current State Challenges

• Redesign of existing programs
• Strengthening and transforming the health care
  infrastructure.
• Streamlining Medicaid and CHIP eligibility
  determinations and coordinating with the HBE.
• Effectively redesigning existing state and local
  programs currently serving the population.
• Building adequate workforce to serve newly
  insured populations.
• Uncertainties
• Pending federal guidance for many provisions,
  which complicates states ability to implement.
• Long term fiscal planning as federal
  participation levels decrease over time.
• Estimating the ongoing needs of the undocumented
  and remaining uninsured populations.

73
Additional Resources

• Medicaid Managed Care Initiatives
• www.hhsc.state.tx.us/medicaid/MMC.shtml
• Approved Healthcare Transformation 1115 waiver
  www.hhsc.state.tx.us/1115-waiver.shtml
• HHSC News Releases
• www.hhs.state.tx.us/news/release.shtml
• Texas Medicaid Pink Book
• www.hhsc.state.tx.us/medicaid/reports/PB8/PinkBoo
  kTOC.html