The Patient Protection and Affordable Care

Act(P.L. 111-148)

PPACA

• Title I – Quality, Affordable Health Care for All Americans

• Title II – Role of Public Programs• Title III – Improving the Quality and

Efficiency of Health Care• Title IV – Prevention of Chronic Disease

and Improving Public Health • Title V – Health Care Workforce

PPACA

• Title VI – Transparency and Program Integrity

• Title VII – Improving Access to Innovative Medical Therapies

• Title VIII – CLASS Act

• Title IX – Revenue Provisions

• Title X – Strengthening Quality, Affordable Health Care for All Americans

Coverage

• Market reforms– Children on parents’ plan to age 26

– Temporary high risk pools

– Early retirees reinsurance

– Eliminating pre-existing conditions

• Individual & employer responsibility

• Insurance exchanges

Public Health:Disease Prevention & Health

Promotion

• National Prevention, Health Promotion and Public Health Council – Strategy & Reports to Congress

• Prevention and Public Health Fund: “… to provide for expanded and sustained national investment in prevention and public health programs to improve health and help restrain the rate of growth in private and public sector health care costs”

Public Health:Disease Prevention & Health

PromotionPrevention and Public Health Fund• 2010 $500M• 2011 $750M• 2012 $1B• 2013 $1.25B• 2014 $1.5B• 2015 and each year thereafter $2B

Public Health:Disease Prevention & Health

Promotion

• Clinical and Community Preventive Services Task Forces

• Education and Outreach Campaigns

• Preventive services in Medicaid and Medicare

• Community Transformation Grants

Medicaid & the Safety Net

• Medicaid coverage for all up to 133% FPL

• 100% FMAP in 2014, 90% FMAP in 2019

• Pass through for counties required to contribute to the non-federal share

• $14.1 Billion cuts to DSH from 2014 to 2019

• New requirements for private non-profit hospitals

Delivery Systems & Access

• $11B for Community Health Centers

• $1.5B National Health Service Corps

• Medicaid = Medicare rate for primary care docs 2013 and 2014

• Medicare & Medicaid payment reforms

• Collaborative Care Network Program

Health Workforce

• National Health Care Workforce Commission

• Graduate Medical Education

• Training programs, scholarships and loan repayment

Long Term Care

• Community Living Assistance Services and Supports (CLASS) Act

• Medicaid Money Follows the Person Rebalancing Demo through September 2016

• Community First Choice Option in Medicaid

Jail Health

• Persons in custody pending disposition of charges retain eligibility for coverage under plans on the exchanges

Thank you

NACo

May 14, 2010

Andrea MarescaLegislative Director for Health Policy

NGA

Health Reform: A View from the Governors

2

Ongoing state fiscal challenges • Declines in…

– State spending (2009 and 2010)

– State revenue (five consecutive quarters)

– State government employment

• Growth in Medicaid enrollment

– 5.4 percent in FY2009

– 6.6 percent projected in FY2010

• Growth in Medicaid spending: average 7.9 percent in FY2009

• Bottom line: Ongoing budget gaps in most states

3

Continuing need to close gaps

• States closed budget gaps of over $72 billion in FY 2009 and nearly $90 billion in FY 2010

• $136 billion in remaining gaps over 2010-2012

– $18.9 billion remaining for FY 2010

– $55 billion for 2011

– $61 billion for 2012

4

Managing the budget crisis

• Managing through the recession has been a top priority for governors

• Recovery Act’s enhanced FMAP staved off more drastic cuts and tax increases

• FMAP extension may be equally critical

– State flexibility to manage Medicaid budget is restricted by the health reform law’s extension of the eligibility MOE

5

The buck stops with states

• National structure for financing health insurance for low-income Americans

• National rules that eliminate various rating and underwriting practices

• BUT… Governors and states must implement much of it

• State policies may largely determine whether the federal law translates into meaningful, affordable coverage and access to services

6

Health reform: What are governors doing now?

• Asking questions

• Analyzing the statute

– Requirements

– Options

– Opportunities

– Timeline/sequencing

– Costs/savings

7

Governors organizing for health reform

• Identifying leadership for health reform efforts:

– Appointing a “health care lead”

– Forming a task force

– Establishing a cabinet

– Other means

• Identifying state agencies involved

• Determining how to best structure existing governmental entities and/or create new ones

8

Key issues and decisions: Insurance rate & market reforms

• Decisions regarding immediate reforms

– High risk pool program

– Early retiree reinsurance

– Defining medical loss ratio

– Conducting rate reviews

– Etc.

• Compare existing market rules to longer-term mandatory insurance rate reforms

• Expand enforcement role to encompass new rules

• Lay the foundation for transitioning to new federal rules

9

Key issues and decisions: Medicaid

• Medicaid expansion to 133% FPL, plus 5% income disregard

– State option to expand prior to 2014

– Today, Medicaid represents 22% of state budget spending

– Expansion adds an additional 16 million people, presenting new budgetary and systems challenges

• Eligibility systems upgrades needed

– Can states and HHS/CMS leverage common needs?

– What is the cost and who will pay?

10

Key issues and decisions:Medicaid (cont.)

• Additional Medicaid requirements

– Long term impacts for states from primary care provider reimbursement rate increase

– New service requirements

• Options and opportunities

– Home and community-based services

– Medicaid demonstration programs

– Center for Medicare and Medicaid Innovation

11

More questions than answers

• Who will enroll and when?

• What are the impacts of reductions in the DSH program?

• What is the cost for states from changes to the Medicaid drug rebate program?

• What initiatives will the Office of Duals and the Center for Medicare and Medicaid Innovation undertake and when?

12

Key issues and decisions: Health care exchanges

• State option to establish a health insurance exchange by 2014

• Many open questions:

– To establish or not to establish?

– Who will run the exchange?

– Will it have authority and roles beyond those required by federal statute?

– When will states receive planning funding?

– Is funding sustainable over the long-term?

13

• States may leverage the exchange to drive system reforms

• Improve coordination between Medicaid and other populations

• Improvements in quality

• Increased transparency

• Reduce the rate of cost growth

Health care exchanges: Opportunities

14

• Guidance needed early on

• Limited models and best practices

• Building and integrating systems and programs

• Managing expectations

• Ensuring coordination between federal agencies and states

Health care exchanges: Challenges

15

Laying the groundwork

• November 2010 elections

– 37 governors races

– 24 new governors guaranteed

• Intrastate agency coordination

• Key relationships – legislators, local governments

• Stakeholder partnerships

• Coordination with federal agencies

16

NGA resources

• NGA convened consortium and meeting with other key partners at the national level

• www.nga.org/healthreform