Issues and Challenges in State Medicaid Programs

1. Issues and Challenges in State Medicaid Programs Ann Clemency Kohler, Director of Health Services National Association of State Medicaid Directors American Public Human Services Association Ann.Kohler@aphsa.org 202.682.0100

2. States - Laboratory For Health Care Reform ● Fifty states, Puerto Rico, and the territories are working on health care solutions ● The States are in a unique position to address a variety of health care reform ideas ● Through Medicaid waivers, states have tested various health care initiatives ● States have significant experience with long- term care and community-based models ● States are in the best position to implement innovative ideas and strategies

3. Federal - State Relationship ● CMS and states need to rebuild partnership ● Relationship needs to be more collaborative ● Partnership is critical with current economy, budget constraints, and plans for healthcare reform ● Interim head at CMSO committed to working with NASMD

4. Impact of Recession on State Budgets ● Economic downturn and massive job losses are contributing to significant shortfalls in state budgets and increases in Medicaid enrollment ● States must have balanced budgets ● Many states forced to cut funding to Medicaid and other crucial programs ● Every 1% increase in unemployment = 1 million additional Medicaid clients

5. The American Recovery and Reinvestment Act ● Provides temporary FMAP increase of 6.2 percentage points for 27 months ● Allows additional 5.5 percent, 8.5 percent, or 11.5 percent reduction in the State share of Medicaid costs – determined by unemployment rate ● Creates State Fiscal Stabilization Fund ● Extends Transitional Medical Assistance

6. The American Recovery and Reinvestment Act ● Increases Supplemental Nutrition Assistance Program funding by $20 billion; ● Places a moratorium on a regulation for outpatient hospital services; and ● Extends existing moratoria on selected Medicaid regulations, including targeted case management; provider taxes; and school based administration and transportation services

7. SCHIP Reauthorization ● Signed into law February 4, 2009 ● Expands coverage to additional 4 million children ● Requires states to offer dental care through SCHIP, and allows them to extend dental benefits to children who have private coverage that does not include dental coverage ● Requires Mental Health Parity ● Eliminates the five-year waiting period for documented immigrant children and pregnant women to become eligible

8. Ready for Reform ● Medicaid waivers and SCHIP programs show states can develop high quality affordable health care with low administrative costs ● They can be models to build upon for reform efforts

9. Dual Eligibles ● Any solution must address the dual eligibles ● Over 7 million duals, 5 million over the age of 65 years ● They represent 29% of Medicare spending and 40% of Medicaid spending ● Much of the Medicaid spending is for long-term care- too often institutional care