Elizabeth A. Johnson, Esq. Commissioner Department for Medicaid Services

Kentucky Chamber of CommercePatientProtection and Affordable Care Act Seminar“Impact on Kentucky Medicaid” Elizabeth A. Johnson, Esq. Commissioner Department for Medicaid Services Cabinet for Health and Family Services Elizabeth A. Johnson, Esq. Commissioner Department for Medicaid Service Cabinet for Health and Family Services

National Perspective on Medicaid • Medicaid: • is the nation’s major public health program for low-income Americans • finances health and long-term care services for more than 50 million people • supports tens of thousands of health care providers throughout the country • Medicaid spending enable the program to make significant contributions to state economies in terms of jobs, income and overall economic activity Source: Kaiser Family Foundation – The Role of Medicaid in State Economies: A look at the Research (January 2009)

Kaiser Family Foundation • “As state policymakers grapple with closing budget shortfalls, many look to Medicaid for savings, as it is a major component of state budgets. However, it is argued that cutting Medicaid not only adversely affects the beneficiaries and providers, but also may have an impact on the larger state economy.”

Flow of Medicaid Dollars Through a State Economy Federal Medicaid Matching Dollars – Injection of New Money State Medicaid Dollars Health Care Services Vendors (ex. Medical Supply firm) Employee Income Direct Effects JOBS Indirect Effects Induced Effects Consumer Goods and Services Taxes Source: Kaiser Family Foundation – The Role of Medicaid in State Economies: A look at the Research (January 2009)

Key Findings (KFF Study) • “If the Medicaid program were shut down and the funds returned to taxpayers who saved/spent the funds according to typical consumer expenditure patterns, employment in North Carolina would fall by an estimated 67,400 jobs and labor income would decline by $2.83 billion, due to the labor-intensive nature of Medicaid expenditure.” SOURCE: North Carolina Journal of Medicine, 2008 • “The administration of the Oklahoma Medicaid program creates an economic impact on the economy of Oklahoma. In FY 2006, total business spending generated from the Medicaid program was $8.0 billion. Additionally, 99,036 jobs were created, income increased by $2.8 billion and tax revenue increased by $315.0 million.” SOURCE: Oklahoma Health Care Authority • “In 2004, federal matching funds to the state of Missouri generated $5.82 billion in economic activity, support 79,892 jobs in the state and increased wages and other income earned by Missourians by $2.8 billion, which generated $211 million in tax revenue.” SOURCE: Missouri Foundation for Health, 2005)

Medicaid: Provides coverage to over 789,000 of Kentucky’s most vulnerable citizens Provides coverage to over 58,600 children who are enrolled in the Kentucky Children’s Health Insurance Program (KCHIP) Covered 21,236 births in Kentucky or approximately 37% of all Kentucky births KY Medicaid Statistics

Expenditures Administrative Cost Medicaid Benefits For every dollar received, DMS spends approximately 2.2% for administrative cost (salaries, supplies, etc).

Economy • Unprecedented growth in the number of new enrollees • During the current biennium Medicaid has added, on average, 3,400 (900 adults and 2,500 children) new recipients each month compared to just 930 per month in prior biennium • 264% increased eligibility growth over the last 17 months (June 2008 – November 2009)

Economic Impact for KY • Medicaid is the largest payer for long-term care • Medicaid has 40,733 enrolled providers (as of 1/2010) • Medicaid is the primary payer of healthcare in Kentucky

Medicaid Payments By Member’s Area Development District State Fiscal Year 2009 ($5,543.1 million) Payments by date of payment and by member’s residence. Figures reflect prorated distribution of “below the line” payments such as DSH payments and Medicare premiums. Source: Department for Medicaid Services Decision Support System.

Medicaid Expenditures FY 09

Healthcare Reform *Mandatory **Optional *** Federal Change

Elizabeth A. Johnson, Esq. Commissioner Department for Medicaid Services