Federal Affairs Update
-
Upload
kelsey-douglas -
Category
Documents
-
view
47 -
download
0
description
Transcript of Federal Affairs Update
Federal Affairs UpdateMolina Policy & Government Advocacy Summit
Ken PreedeDirector, Federal Affairs
2
Joint Select Committee on Deficit Reduction• 12 Member “Super Committee”• Equal Representation from each political party and branch of
Congress– Democratic Co-Chair: Senator Patty Murray (D-WA)– Republican Co-Chair: Representative Jeb Hensarling (R-TX)
• Required to trim at least $1.2 trillion from federal budget • Committee Required to report legislation by November 23, 2011• Bill required to pass both House and Senate by December 23, 2011 • Bill given special status in House and Senate
– No Amendments– Filibuster-proof simple majority vote in Senate
3
Democratic Members
Senator Patty Murray
(WA)
Senator Max Baucus
(MT)
Senator John Kerry (MA)
RepresentativeChris Van Hollen
(MD)
RepresentativeXavier Becerra
(CA)
RepresentativeJames Clyburn
(SC)
4
Republican Members
Senator Jon Kyl (AZ)
Senator Rob Portman
(OH)
Senator Pat Toomey (PA)
RepresentativeJeb Hensarling
(TX)
RepresentativeDave Camp (MI)
RepresentativeFred Upton (MI)
5
Timeline of action under the Budget Control Act of 2011
Deadline for House and Senate Committees to submit recommendations to the Super Committee
October 14, 2011
Deadline for Super Committee to vote on a report and legislative recommendations
November 23, 2011
Deadline for Super Committee report/legislative language to be submitted to WH and Congressional Leaders
December 2, 2011
Bill must be introduced in House and Senate December 3, 2011
Deadline for any committee to which the Super Committee bill is referred to report it out without change
December 9, 2011
Deadline for vote on Super Committee in House & Senate December 23, 2011
Date by which bill must be enacted in order to avoid trigger of sequestration January 15, 2012
Termination of Super Committee January 31, 2012
Date on which sequestration for FY2013 would occur January 2, 2013
6
Joint Select Committee on Deficit Reduction• If no Committee consensus or bill fails to pass either House or Senate,
a series of automatic cuts (called sequestration) to Defense, discretionary and Medicare spending would go into effect by 2013.– For Parts A and B, the applicable cut determined by OMB would apply to
each individual service ordered during the applicable year– For Parts C and D, the applicable cut determined by OMB would apply to
each monthly contractual payment during the applicable year– Maximum cut to Medicare spending is 2%
• No Automatic Cut to Medicaid funding• Approval of a balanced budget amendment to the U.S. Constitution
would allow the debt limit to be increased without enactment of a second round of budget savings.
Three Scenarios• Scenario One: Gridlock
– No plan developed by the Super Committee or plan fails to pass BOTH the House and the Senate or the plan passes both the House and Senate but is VETOED by the President
– Outcome: Sequestration for $1.2 Trillion with Medicaid OFF THE TABLE
Three Scenarios• Scenario Two: Full Plan to cut at least $1.2 Trillion
– Super Committee develops plan and it passes both Houses of Congress and is signed by the President
– Medicaid and Medicare ON THE TABLE and likely included in the plan
Three Scenarios• Scenario Three: Partial Plan
– Super Committee develops plan and it passes both Houses of Congress and is signed by the President – but doesn’t reach $1.2 Trillion target
– Medicaid and Medicare ON THE TABLE and likely included in the plan
– Sequestration to make up the difference (Medicaid OFF THE TABLE)
What’s at stake?
• Medicaid Funding – FMAP “blended rates”– Block grants– Maintenance of Effort – Dual-eligible integration
• Mandatory Medicaid HMO enrollment? Opt out?
What’s at stake?
• Medicare Funding– Fee-for-service provider cuts (hospitals, nursing
homes, home health care)– Medicare Advantage cuts– Change in age eligibility?– Cost-sharing?
What’s at stake?
• Revenue– Tax Reform?– Rate Reduction
coupled with closing loopholes and eliminating deductions
– Molina tax issue
13
Projected Savings from Sequester$1.2 Trillion in Total Savings
PPACA HEALTH PLAN EXCISE TAX
14
PPACA Health Plan Excise Tax• Takes effect in 2014 with $8 billion in collected
excise taxes – 2015 and 2016: $11.3 billion– 2017: $13.9 billion– 2018 and beyond: $14.3+ billion
• Based on market-share of total U.S. eligible premiums collected
• Self-insured plans and certain non-profit plans exempted from the excise tax
PPACA Health Plan Excise Tax
• Marwood Group Study• Commissioned by Molina and Amerigroup in
Summer of 2011• Independent analysis of impact of tax on Federal
and State Medicaid expenditures• Advocacy tool for future lobbying efforts to repeal
the tax
Marwood Study
Key Finding
• Total excise tax of $10.5 billion on Medicaid health plan premium revenue– State Medicaid expenditures between 2014 and 2019
up to $4.1 billion– Federal Medicaid expenditures between 2014 and
2019 up to $6.4 billion
Marwood Study
Likely Flow of Medicaid Managed Care Tax$100
AssessmentActuarial
Soundness FMAP
$61$100 (?)$100
Federal Treasury will spend $61 out of $100 in tax revenue collected from Medicaid Managed Care Organizations - with
states paying the additional $39.
Marwood Study
ActuarialSoundness
$100 (?)
Key Step: The link between increased cost and state’s ability to pay a truly actuarially sound rate beginning in 2014
Marwood Study
Marwood Estimate of Financial Impact of Health Industry Excise Tax
YearMedicaid
MCO Spending
Total Health
Premiums
Medicaid % of Total
ACA Tax
Medicaid MCO Tax $
State FMAP (Avg.)
Total State
Share $
Federal Share $
2014 $88.3 Billion $643 Billion 13.73% $8
Billion $1.1 Billion 39% $428 Million
$670 Million
2015 $103.4 Billion $730 Billion 14.16% $11.3
Billion $1.6 Billion 39% $624 Million
$976 Million
The expected 2014 growth in Medicaid exacerbates the problem for both State and Federal spending (16+ Million newly eligible beneficiaries)
Marwood Study
Be careful what you wish for…
• Currently ABD expenditures account for 75-80% of all Medicaid spending with very little penetration in Medicaid managed care
• Medicaid’s share of premiums would likely increase due to more lives and the potential for higher premium rates associated with the ABD population
Marwood Study
Year Medicaid Managed Care Enrollment Growth
Commercial Insurance Enrollment Growth
2014 14% 11%
2015 5-6% 3.6%
2016 5-6% 7%
2017+ 1-2% 0%
59% of the growth in private, commercial health insurance enrollment could be through self-insured plans – EXEMPT from the tax
Just when you thought it couldn’t get any worse…
Marwood Study
Solution
• Maintain the size of the tax assessment but exempt Medicaid revenue as taxable
• Federal net savings: $6.4 billion• State net savings: $4.1 billion
Marwood Study
Pros • Levels the playing field for Medicaid MCOs
regardless of tax status• Provides savings for Federal budget in a deficit-
conscious environment• Provides savings for State Medicaid budgets
Marwood Study
Cons• Levels the playing field for Medicaid MCOs
regardless of tax status• Shifts more tax burden to other insurers not
exempt from the tax (i.e. commercial) – resulting in an increase in premiums for consumers
• Alerts federal and state lawmakers that Medicaid MCOs are not responsible for the tax which may result in future legislative/regulatory action
26
Don’t tax you
Don’t tax me
Tax that man behind the tree
U.S. Senator Russell B. Long
Medicaid and CHIP Payment and Access Commission (MACPAC)
• Established under CHIPRA of 2009• Tasked with reviewing state and federal Medicaid
and CHIP access and payment policies • Make recommendations on issues affecting Medicaid
and CHIP populations
Medicaid and CHIP Payment and Access Commission (MACPAC)
• 7 public meetings held• In June, released report: “The Evolution of Managed
Care in Medicaid” but it contained no recommendations• We anticipate additional reports and policy
recommendations in the upcoming year.
www.macpac.gov