The Perfect Storm - Putting America’s Health Care in Peril

American Health Care Act + President’s Budget

May 24, 2017 CBO AHCA AnalysisDaniel Derksen, M.D., Director

University of Arizona Center for Rural Health

Arizona Center for Rural HealthMission: to improve the health & wellness of rural &

underserved populations. AzCRH houses the:

1. State Office of Rural Health2. Rural Hospital Flexibility Program3. Small Hospital Improvement Program4. Western Region Public Health Training Center5. AzCRH Navigator Consortium

http://crh.arizona.edu

Dan Derksen, MD

American Health Care Act

Dan Derksen MD

1. American Health Care Act Accessed 05/24/2017 at: https://housegop.leadpages.co/healthcare/2. CBO-JCT Cost and Coverage Estimates of the American Health Care Act, 05/24/2017: https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/hr1628aspassed.pdf

CBO: AHCA over 10 years would: • Cut $1.5 Trillion in federal funding • Cut $830 Billion Medicaid funding to States• Cut $665 B in fed subsidies for individuals• Increase uninsured Americans by 23 million

Dan Derksen MD

1. Accessed 05/24/2017 at: https://www.hhs.gov/sites/default/files/fy2018-budget-in-brief.pdf 2. NYT Accessed 05/24/2017: https://www.nytimes.com/interactive/2017/05/23/us/politics/trump-budget-

details.html?q=medicaid

Over 10 years would cut $2 trillion:$610 billion in federal Medicaid funding $193 billion SNAP (food stamps)$72 billion SSI disability support$87 billion NIH funding$18 billion CDC funding

American Health Care Act

Dan Derksen MD

•Eliminates fed. min. 50% of total Medicaid costs•Shifts FMAP to per capita amt. or block grant•Bases cap/grant on 2016 state’s total expenses •Adjusts annually based on CPI-M•Cuts $830B over 10 yrs Medicaid funding to states1. CBO-JCT Cost and Coverage Estimates of the American Health Care Act, 05/24/2017: https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/hr1628aspassed.pdf2. American Health Care Act Accessed 05/24/2017 at: https://housegop.leadpages.co/healthcare/

Rural, Elderly, & Disabled at RiskNurse, Physician, Hospital, Clinic - Charity Care Taxes

“You don’t save money throwing

people off coverage –that just shifts costs to individuals, families, & health providers -and it worsens health

outcomes” Dan Derksen, MD

Dan Derksen MD

Physician& Clinic

20%Rx

26%

DentalNursing

Home

33% Private Insurance

Medicare 20%

Medicaid 17%

Other 10%Out of Pocket 11%

2015 U.S. Health Spending$3.2 Trillion

Dan Derksen, MD

Accessed 03/10/2017 at: http://content.healthaffairs.org/content/36/1/166.full.pdf+html

Medicaid Cuts in AHCA:

Accessed 05/23/17: 1. http://content.healthaffairs.org/content/36/1/166.full.pdf+html2. https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/hr1628aspassed.pdf

Dan Derksen, MD

Medicaid Spending in 2015 was1: $545 billion = $200 state + 345 fed Federal Medicaid cuts2 2017-26: $830B (>$150B/yr by 2026)Medicaid Enrollment2: -14M

Medicaid, CHIP, Medicare: One in $3 U.S. Health Spending in 2015

Accessed 03/10/17 at: Martin: Health Affairs Jan 2017: http://content.healthaffairs.org/content/36/1/166.full.pdf+html

Dan Derksen, MD

Medicaid: $545 billion Medicare: $646 billion Total US: $3.2 trillion

2016 Publicly Sponsored Insurance Medicaid + CHIP + Medicare

Dan Derksen, MD

38% US pop (123M/323M)75 Million=Medicaid 70M + CHIP 5M

57 Million on Medicare9 M dual on both Medicaid + Medicare

CHIP = Children’s Health Insurance Program

Accessed 05/24/17 at: http://content.healthaffairs.org/content/36/1/166.full.pdf+htmlhttps://aspe.hhs.gov/system/files/pdf/255516/medicaidexpansion.pdfhttps://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-data/report-highlights/index.html

Marketplace3

+10.4 MillionEffectuated Enrollment

(paid premiums)

Medicaid + Marketplace Gain Post-ACA Enrollment Gain from Sept 2013 thru 2016

UNITED STATESMedicaid+CHIP1

+16.8 Million

Dan Derksen, MD

Accessed 05/17/2017:1. Medicaid + CHIP Report thru Mar 2017: https://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-data/report-highlights/index.html2. Coverage gains 2010-2016 due to the ACA US DHHS: https://aspe.hhs.gov/sites/default/files/pdf/187551/ACA2010-2016.pdf3. Effectuated Marketplace Enrollment: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-10-19.html

91.4% Americans with health insurance 201620 Million Gained Coverage2 since 20108.6% or 27 Million Uninsured in 2016

https://www.cdc.gov/nchs/data/nhis/earlyrelease/insur201609.pdf

Age <26 Parents’ Plan2

+2.3 Million

é16.8M Medicaid/CHIP Enrollees 2013-16

31 States + DC Expanded Medicaid

Dan Derksen, MD

>Half (16) That Expanded Are in Republican Governor States:

AZ, AR, IL, IA, IN, KY, MD, MA, MI, ND, NH, NJ, NM, NV, OH, VT

https://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-data/report-highlights/index.html

Medicaid FMAP: Federal Medical Assistance Percentage:

Accessed 03/10/17:FMAP by state: kff.org/medicaid/state-indicator/federal-matching-rate-and-multiplier/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D

Congress Research Service Medicaid FMAP released 02/09/2016 at: https://fas.org/sgp/crs/misc/R43847.pdf

Dan Derksen, MD

FMAP is the federal share of Medicaid costs, based on a

state’s per capita income (PCI) compared to US PCI

Dan Derksen, MD

50% Statutory Minimum Federal Cost ShareFMAP Share Averages 57% in the 50 States

Example: Arizona 2018 FMAP = 69%

Medicaid FMAP

2018 FMAP by State: http://kff.org/medicaid/state-indicator/federal-matching-rate-and-multiplier/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D

Federal Per Capita Medicaid Enrollee Spending by State, 2017

0

2,000

4,000

6,000

8,000

10,000

12,000

DC NY

WV RI

CT

OR VT MOMSDE KY MN AR TN MT

OHND PA ME

MA ID LA MD IA IN US AK NC UT

NM KS SC AL WI

CA

WY

WA

OK TX MI

NJ

GA FL VA AZ NESD HI

CO NV IL NH

•Data: J. Holahan and M. Buettgens, Block Grants and Per Capita Caps: The Problem of Funding Disparities Among States, Urban Institute, Sept. 2016, available at http://www.urban.org/research/publication/block-grants-and-capita-caps.

Rosenbaum S Commonwealth Fund Mar 2017: http://www.commonwealthfund.org/publications/issue-briefs/2017/jan/medicaids-future-aca-repeal

Arizona #8 lowest

Arizona would be punished by the proposed AHCA and the President’s budget because Arizona expanded

AHCCCS coverage, and is cost efficient

“Weigh the evidence and do the math”

$2 billion per year20,000 jobs

250,000 uninsured covered

Governor Brewer – Medicaid Expansion

http://www.huffingtonpost.com/2013/01/14/arizona-medicaid-expansion_n_2474726.html

Governor Brewer restored Medicaid coverage to 100% FPL for childless

adults in 2014, and expanded it from 100% to 138% FPL as the ACA allows

Dan Derksen MD

Dan Derksen, MD

Adapted by Dan Derksen, MD

Payer Source # Arizonans %AZ PopEmployer Sponsored Insurance 3,300,000 50.7%

Medicaid (AHCCCS)/CHIP (KidsCare) 1,200,000 18.5%Medicare 800,000 12.3%

Uninsured 1,200,000 18.5%Total Pop. Arizona 6,500,000 100.0%

Pre-ACA 2012 AZ Health Coverage

AHCCCS – AZ Medicaid<138% FPL ($33,948 for a Family of 4)

July-Sep 2013 to Oct 2016 Net Gain

+600,000

AZ MARKETPLACE133-400% FPL ($33,948 - $98,400 Family of 4)

OE-3 Effectuated Enrollment* Mar 31, 2016

+180,000AZ <26 Parents’ Plan

+70,000

How Arizona Cut Its Uninsured 2013-16

*Effectuated enrollment are those enrolled and paying premiums.CHIP = Children’s Health Insurance Program, called KidsCare in Arizona

Accessed 04/26/17 at: 1. AZ KidsCare/CHIP: https://www.azahcccs.gov/Resources/Downloads/PopulationStatistics/2017/Mar/AHCCCS_Population_Highlights.pdf2. AHCCCS/Medicaid: https://www.azahcccs.gov/Resources/Reports/population.html 3. Effectuated Enrollment (pd premium): https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-06-30.html

Arizona Total: +850,000KidsCare/CHIP restored 09/2016: +15,000

Eligible Arizona Children Age <19 years with family incomes between 138-200% FPL

Dan Derksen, MD

YES from 2016-17 Premiums Doubled (ex. 25 y.o. Non-Smoker, Silver Plan AZ)

2017 AZ Marketplace Plan Rates: https://insurance.az.gov/sites/default/files/documents/files/2017%20Individual%20QHP%20Min%20Max%20Average%20Sample%20Rates.pdf

2016 AZ Marketplace Plan Rates: https://insurance.az.gov/sites/default/files/documents/files/INDIVIDUAL_PPO_HMO_Minimum_Maximum_Average_Premiums.pdf

Dan Derksen, MD

AZ County 2016 2017 Avg. Monthly Rate Increase

Average %Increase

Maricopa $206 $386 $180 87%Pima $190 $274 $84 44%

Gila, Pinal $219 $453 $234 107%Apache, Navajo,

Coconino, Mohave $275 $501 $226 82%Yavapai $294 $586 $292 99%

Yuma, La Paz $261 $593 $332 127%Santa Cruz $190 $395 $200 108%

Cochise, Graham, Greenlee $238 $486 $248 104%

Total # Selected Market Plans

Avg. TtlPrem/Mo (Insurer

Gets)

AvgAPTC

Mo (Fed Subsidy

Pays)

AvgPrem Mo

after APTC

(Enrollee Pays)

#Received APTC

Subsidies(% of TtlEnrollees)

#Received APTC +

CSR Subsidies

(% TtlEnrollees)

# Paid Full Premium(% Total Enrollees)

AZ 2016 203,066 $324/mo $204/mo $120/mo 150,269

(74%)94,463(47%)

52,797(26%)

AZ 2017 196,291 $611/mo $521/mo $104/mo 155,754

(79%)100,316(51%)

40,537(20%)

US 2016 11,081,330 $397/mo $291/mo $106/mo 9,389,609

(85%)6,400,000

(57%)1,691,721

(15%)US

2017 12,216,000 $476/mo $383/mo $106/mo 10,101,808(83%)

7,500,000 (61%)

2,114,192 (17%)

But low-income Arizonans were shielded from total premium increases because of the ACA subsidies!

APTC = Advance Premium Tax Credit SubsidyCSR = Cost Sharing Reduction Subsidy

Dan Derksen MD

4% enrollment increase 2016 to 2017 in those getting APTC 6% enrollment increase for those getting APTC + CSR

23% enrollment decrease for those not receiving subsidies

APTC = Advance Premium Tax Credit SubsidyCSR = Cost Sharing Reduction Subsidy

Dan Derksen MD

Low income Arizonans shielded from total premium increases because of the ACA subsidies

Sharply cutting subsidies for the poor, by $1.5 trillion over 10 years as per the AHCA, will increase the

uninsured, shift costs to individuals, families, & health providers, and worsen health outcomes

If the American Health Care Act were enacted as is, it would…

•End Medicaid/AHCCCS for 380,000 in AZ •Cut $2.5 billion in federal funding to Arizona•Shift $0.5 billion/yr federal costs to AZ to cover 300,000 childless adults (<100% FPL)•Force 80,000 off AHCCCS (100-138% FPL)• Increase Arizona uninsured to pre-ACA levels (to 1.2 million uninsured from 750,000)

05/24/2017 Bob Christie AP, Arizona Daily Star published 03/18/17: http://tucson.com/news/state-and-regional/analysis-arizonans-may-lose-medicaid/article_404d3ae0-0bef-11e7-bd41-5b4190aad6d3.html

Dan Derksen MD