COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID SERVICES

Kentucky Chamber of CommercePatient Protection and Affordable Care Act Seminar

“Impact on Kentucky Medicaid”

Elizabeth A. Johnson, Esq.Commissioner

Department for Medicaid ServiceCabinet for Health and Family Services

COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID 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

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Source: Kaiser Family Foundation – The Role of Medicaid in State Economies: A look at the Research (January 2009)

COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID SERVICES

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.”

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COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID SERVICES

Flow of Medicaid Dollars Through a State Economy

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State Medicaid Dollars

Health Care Services

Vendors(ex. Medical Supply firm)

Employee Income

Consumer Goods and Services

Taxes

Federal Medicaid Matching Dollars – Injection of New Money Direct

Effects

Indirect Effects

InducedEffects

JOBS

Source: Kaiser Family Foundation – The Role of Medicaid in State Economies: A look at the Research (January 2009)

COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID SERVICES

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)

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COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID SERVICES 6

KY Medicaid Statistics• 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

COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID SERVICES

Expenditures

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For every dollar received, DMS spends approximately 2.2% for administrative cost (salaries, supplies, etc).

Medicaid Benefits Administrative Cost

COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID SERVICES

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)

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COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID SERVICES

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

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COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID SERVICES 10

Bluegrass$743.1 million

Barren River$322.8 million

Pennyrile$234.7 million

Lincoln Trail$311.5 million

Lake Cumberland$368.2 million

Green River$273.8 million

Purchase$212.1 million

Kentucky River$302.3 million

Big Sandy$306.8 million

Gateway$120.3 million

Cumberland Valley$528.7 million

KIPDA$1,180.7 million

FIVCO$212.5 million

Buffalo Trace$72.9 million

Northern Kentucky$352.6 million

Medicaid PaymentsBy 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.

COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID SERVICES

Medicaid Expenditures FY 09

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Hospitals, 1,197,681,695

Nursing Facilities, 879,879,656

Passport, 740,023,831

Alternative Community Care

342,436,108 Physician & Clinics 539,015,345

Transportation 82,417,049

ICF/MRs, 92,895,956

Dental, 85,346,640

Pharmacy, 567,997,644

All Other, 1,015,446,487

COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID SERVICES

Healthcare Reform

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*Mandatory**Optional*** Federal Change

COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID SERVICES

Healthcare Reform

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*Mandatory**Optional*** Federal Change

COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID SERVICES

Healthcare Reform

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*Mandatory**Optional*** Federal Change

COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID SERVICES

Healthcare Reform

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*Mandatory**Optional*** Federal Change

COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID SERVICES

Healthcare Reform

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*Mandatory**Optional*** Federal Change