The Economic Stimulus and Health Chairs · – Hold harmless (no state would see a drop in FMAP)...

The Economic Stimulus and Health Chairs

Friday, April 17, 2009, 2:00 pm EDT

A partnership between the Kaiser Family Foundation and the NCSL Health Chairs Project

2

Moderators:• Donna Folkemer, Group Director, National

Conference of State Legislatures• Jennifer Tolbert, Principal Policy Analyst, Kaiser

Commission on Medicaid and the Uninsured, Kaiser Family Foundation

Speakers:• Robin Rudowitz, Principal Policy Analyst, Kaiser

Commission on Medicaid and the Uninsured, Kaiser Family Foundation

• Joy Johnson Wilson, Federal Affairs Counsel, Health Policy Director, National Conference of State Legislatures

K A I S E R C O M M I S S I O N O NMedicaid and the Uninsured

Figure 3

Health Care Provisions in the American Recovery and

Reinvestment Act (ARRA)Presented by

Robin Rudowitz Principal Policy Analyst

Kaiser Commission on Medicaid and the Uninsured Kaiser Family Foundation

NCSL Health Chairs WebinarApril 17, 2009


Figure 4

Economic Situation is Severe

• Unemployment rising– 8.5% unemployment in March 2009 (up from 4.9%

at the start of the recession in Dec. 2007)– 5.1 million jobs have been lost since Dec. 2007

• 47 states facing budget shortfalls of $350 to $370 billion for the rest of 2009 through 2011

• Growing uninsured and increasing Medicaid and CHIP enrollment


Figure 5

States with Unemployment Rates at Various Levels, February 2009

AZ AR

MS

LA

WA

MN

ND

WY

ID

UTCO

OR

NV

CA

MT

IA

WI MI

NE

SD

ME

MOKS

OHIN

NY

IL

KY

TNNC

NH

MA

VT

PA

VAWV

CTNJ

DE

MD

RI

HI

DC

AK

SCNM

OK

GA

SOURCE: State and territory figures from the Table 3, Regional and State Employment and Unemployment: December 2008, Bureau of Labor Statistics.

TX

IL

FL

AL

5.5% - 6.9% (10 states)

9.0% - 12.0% (15 states including DC)

7.0% - 8.9% FPL (17 states)

3.4% - 5.4% (9 states)


Figure 6

Families Affected by the Economic Downturn

• Individuals with secure jobs laid off and unable to find new jobs

• Families struggling to pay bills including health care• Individuals lost jobs and ESI – could not afford COBRA

or other coverage • Many not getting needed care• Many turning to Medicaid for the 1st time – unfamiliar

with public assistance• Medicaid has been critical for access to care,

particularly for children• Better outreach, easier application processes and

broader coverage options for adults could better help families in need


Figure 7

SOURCE: Medicaid, SCHIP and Economic Downturn: Policy Challenges and Responses, Kaiser Commission on Medicaid and the Uninsured, April 2008

1%

Increase in National Unemployment Rate

=1.0 1.1

Increase in Medicaid and

SCHIP Enrollment

(million)

Increase in Uninsured(million)

&

Effect of a 1% Point Increase in Unemployment

3-4%

Decrease in State Revenues


Figure 8

Medicaid is an Economic Engine in State Economies

State Medicaid DollarsFederal Medicaid Matching Dollars

—Injection of New Money—

Health Care Services

Vendors (ex. Medical Supply Firm)

Direct Effects

Employee Income

Indirect Effects

Consumer Goods and Services

Taxes

Induced Effects

JOBS


Figure 9

Temporary Medicaid Fiscal Relief Made a Difference in the Last Economic Downturn

42

27

SOURCE: KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, January 2004.

Helped Resolve a Medicaid Budget Shortfall

Helped Avoid, Minimize or Postpone Additional Medicaid Cuts or Freezes


Figure 10

Distribution of Health Funding in the American Recovery and Reinvestment Act (ARRA)

Total Health Spending = $149.2 billion

FMAP Increase , $86.6, 57%HIT, $19.2,

13%

COBRA, $24.7 17%

Other Medicaid, $3.2

2%

Other , $5.5, 4%

NIH, $10.0, 7%

Billions of Dollars

SOURCE: Detailed Summary of ARRA from the Appropriations Committee and Senate Finance and Ways and Means Committees. http://www.speaker.gov/blog/?p=1694 and White House Summary.


Figure 11

Medicaid FMAP Provisions• Timing and amount of Medicaid FMAP relief

– $87 billion – Relief for 10/1/08 – 12/31/2010

• 3 components: – Hold harmless (no state would see a drop in FMAP)– Base increase of 6.2%– Additional assistance based on unemployment

• State requirements to receive the funds:– Cannot have more restrictive eligibility levels or standards

than 7/1/2008 (or come into compliance by July 1, 2009)– Cannot deposit funds in a reserve or rainy day fund– Cannot require counties to contribute a greater portion of the

non-federal share for Medicaid– Additional FMAP must be for eligible expenditures– Must comply with prompt pay standards


Figure 12

Other Medicaid and COBRA Provisions

• Other Medicaid Provisions ($3.2 billion)– Temporary increase in DSH allotments - 2.5% in 2009-2010– Extension of moratoria on Medicaid regulations – Extension of TMA and QI1 programs– Indian Health - Medicaid and CHIP amendments

• Premium Subsidies for COBRA ($25 billion)– 65% subsidy for COBRA premiums for 9 months for workers

involuntarily terminated between 9/1/2008 and 12/31/2009• Trade Adjustment Assistance - Health Coverage Tax Credit

– Increases tax credit from 65% to 80% of qualified health insurance premiums between 4/1/2009 and 12/31/2010


Figure 13

Health Infrastructure & Investment Provisions

• Health Information Technology ($19.2 billion)– Fiscal incentives for Medicare / Medicaid to adopt EHR

• National Institutes of Health ($10 billion)

• Comparative Effectiveness ($1.1 billion)

• Investment in Health Centers ($2 billion)

• Development of Primary Care Workforce ($500 million)

• Indian Health Service ($500 million)


Figure 14

Looking Ahead• Although the economic recovery package provides

significant funds for state fiscal relief, states will still face budget gaps

• The enhanced FMAP and the COBRA subsidies are designed to help support coverage during the economic downturn, but many will not be eligible for these programs leaving significant coverage gaps for recently unemployed workers

• The stimulus funds were intended to provide temporary assistance to help boost the economy and to put investments in place for broader health reform and coverage expansions

Health Care Provisions in the American Recovery and

Reinvestment Act (ARRA)

Joy Johnson-WilsonFederal Affairs Counsel and Health Policy Director

National Conference of State Legislatures

ARRA is Different

2003• Medicaid ($10

billion)– Few restrictions

• Block Grant ($10 billion) – General

government purpose

ARRA• Medicaid ($87

billion)– More restrictions– More reporting– 2 pots of money

• Supplemental Appropriations

• New Programs

Medicaid - State Requirements

• Maintenance of Effort (Floor & Ceiling) and Extended Definition

• Use of Reserve or Rainy Day Funds• Local Government Contributions• Prompt Pay (Practitioners, Nursing

Facilities and Hospitals• Reporting and Transparency• Eligible Expenditures/Cash Management

Improvement Act (CMIA)

Discretionary Health Program Requirements

• Supplemental Appropriations–Rules related to the underlying program

not specifically addressed by the ARRA apply (Example: Immunization Funds)

–Some of the funds are subject to the discretion of the Secretary (Example: Hospital Acquired Infection Grants)

Health IT

State Grants• Grants to Promote

Health Information Technology

• Competitive Grants to States and Indian Tribes to Develop Loan Programs to Facilitate the Adoption of Certified EHR Technology

Medicaid • Incentives for

providers to adopt EHR technology

• Providers includes: practitioners, hospitals, rural health clinics and FQHCs

• $40 million for each of FY 2009 through FY 2015

COBRA - Includes Certain Employers

• Private, non-governmental employers with 20 or more employees;

• Federal, state and local government employers; and

• State Mini-COBRA laws that apply to small employers and other employers not covered by federal law where the state law requires the employer to offer comparable continuation coverage.

Complicated COBRA Administration

• Three federal departments are developing the guidelines:–Department of Labor (DOL) –Centers for Medicare and Medicaid

Services (CMS), U.S. Department of Health and Human Services

– Internal Revenue Service (IRS), Department of the Treasury

Any Questions?

• Among the Panelists?

• From the audience?–Use Q and A option

• After the call–[email protected]

• NCSL resources webpage on the 2009 Economic Stimulus: http://www.ncsl.org/statefed/2009economicstimulus.htm

• Kaiser Family Foundation's Resources on Health Coverage During an Economic Downturn: http://www.kff.org/uninsured/kcmu110508pkg.cfm

• Administration's webpage on the ARRA: http://www.recovery.gov/

• Feel free to contact us for more information [email protected]

• This program was recorded and will be made available on line.

Additional Resources

The Economic Stimulus and Health Chairs · – Hold harmless (no state would see a drop in FMAP)...

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