Tag: Finance

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Medicaid costs, enrollment spiral in pandemic

 
 

 
 

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Florida Medicaid will cost 19% more this year- but the state will have a $342M surplus because of the increased 6.2% FMAP increase for COVID. Then next year the state will have a $1.25B shortfall if the FMAP increase is not continued. No pressure.

 
 

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

 
 

 
 

Clipped from: https://www.news4jax.com/news/florida/2020/12/16/medicaid-costs-enrollment-spiral-in-pandemic/

 
 

 

TALLAHASSEE, Fla. – A new forecast for Medicaid shows state economists and health officials continue to predict a jump in the number of people enrolling in the coming year — bringing a dramatic surge in the amount of money needed for the safety-net program.

In a report posted online Monday, economists projected that Medicaid costs in the current fiscal year, which started July 1, will total $31.6 billion, which is about 19 percent higher than during the 2019-2020 fiscal year. The COVID-19 pandemic, which has played a major role in increased enrollment, hit the state several months into the 2019-2020 fiscal year.

Despite the tremendous increase in enrollment and costs, the economists say Medicaid will have a $342.8 million surplus in general revenue funds this fiscal year. The projected surplus is a result of Congress’ decision to increase the federal government’s share of money this year for Medicaid, which is jointly funded by states and Washington.

Congress this spring approved a 6.2 percentage-point increase in what is known as the Federal Medical Assistance Percentage, or FMAP, a move that effectively drives up the amount of federal money going into the program and eases the burden on states.

But the $342 million current-year surplus, state economists agreed, will turn into a nearly $1.25 billion shortfall in the 2021-2022 fiscal year, “primarily caused by the end of the supplementary federal funding,” according to an executive summary of the report. That projected deficit will confront state lawmakers when they begin the annual legislative session in March and work on a budget for the 2021-2022 year.

The increased costs are driven primarily by a surge in enrollment as the COVID-19 pandemic has caused widespread job losses and new demands on the health-care system.

Florida’s Medicaid enrollment was around 3.9 million people before the pandemic. Economists, who meet as the state’s Social Services Estimating Conference, predicted enrollment of more than 4.44 million people this fiscal year, before the ranks swell to 4.588 million in 2021-2022 and then begin to subside in later years.

“As a result of the uncertainty arising from the future course of the COVID-19 pandemic and its differential effects on the economy, the conference increased total caseload in FY 2020-21 to 4,442,013 — well above the prior peak of 4,017,726 seen in FY 2016-17,” the report’s executive summary said. “Caseload then remains higher than the old peak throughout the forecast, despite its expected decline in the outer years as the unemployment rate improves.”

With Medicaid providing health coverage to poor, elderly and disabled people, enrollment is countercyclical, increasing in tough economic times and decreasing when the economy is thriving. Because Medicaid enrollment increases come during recessions when there is less tax revenue to pay for the program, it puts strains on state budgets.

With the pandemic cutting deeply into state tax collections, legislative leaders already are warning they will have to make budget cuts. The state’s Revenue Estimating Conference is scheduled to meet Friday to update overall general-revenue projections, which will be used in making budget decisions.

 
 

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A year in, Idaho is paying more for new Medicaid enrollees with expensive conditions… | Eye on Boise | idahopress.com

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Idaho Medicaid expansion will cost the state 50% more than projected this year and 100% more than next year, compared to the cost estimates used to decide on expanding.

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

Clipped from: https://www.idahopress.com/eyeonboise/a-year-in-idaho-is-paying-more-for-new-medicaid-enrollees-with-expensive-conditions/article_c52fafa6-0618-54df-8366-308de850dff6.html

The struggle of delayed care leading to costlier and worse conditions rings true for many of roughly 94,000 Idahoans, many of them working poor, who are now covered by Medicaid expansion, write Post Register reporters Nathan Brown and Kyle Pfannenstiel. The cost of Medicaid expansion, which is paid 90% by the federal government and 10% by the state, is coming in higher than expected.

This will create a headache for lawmakers who must decide next year how to pay for a program that will cost the state tens of millions more than they originally thought, and has provided some vindication to conservatives such as Rep. Barbara Ehardt, R-Idaho Falls, who warned before expansion that it would cost more than projected, pointing to the experience of other states.

Ehardt said lawmakers need to control costs moving forward and earmark a revenue stream for Medicaid expansion so they don’t have to scramble for funding every year.

“I definitely feel that it needs to be a dedicated source,” she said.

Higher per-patient spending appears to be driving costs. There were 94,000 people enrolled in expanded Medicaid in November, just a few percent higher than the 91,000 the actuarial firm Milliman Inc. projected in 2018. But many of those people were uninsured for a long time and are now finally accessing care for conditions that have worsened due to lack of affordable preventive care.

“I think there has always been a kind of acknowledgment that the Medicaid expansion population might have pent-up demand,” said Alex Adams, head of the state’s Division of Financial Management.

A state-commissioned 2018 report on the costs and savings of Medicaid expansion projected it would cost the state $41.9 million this year and $44.6 million next year. The new estimates are $67 million this year and the agency’s budget request for next year is $84 million, Adams said, numbers that would also increase the federal share by hundreds of millions from the report’s projections of $370.1 million and $394.9 million, respectively. Gov. Brad Little will unveil his Fiscal Year 2022 budget proposal next month when the legislative session starts on Jan. 11.

“It would be premature to say what the governor’s recommendation might be, but we’re certainly looking at all options,” Adams said.

One thing that could help is that due to the coronavirus pandemic, the federal government is paying 76% of the cost of traditional Medicaid rather than 70% as it had been before. Adams said this savings to the state could be used to cover some of the additional costs of expansion, although he said this isn’t a long-term solution.

Another is that Idaho, unlike many states, is collecting more revenue than expected and has a good deal of savings despite the coronavirus pandemic.

You can read Brown and Pfannenstiel’s full story here at postregister.com (it originally ran in the Post Register on Dec. 10), or pick up today’s Sunday/Monday edition of the Idaho Press; it’s on the front page.

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Nursing Home Providers Sue for Access to $153M in COVID-19 Medicaid Rate Boosts – Skilled Nursing News

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

 
 

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PA nursing homes argue that the provider taxes they pay (“assessments”) allowed the state to draw down $153M extra federal funds as part of COVID relief- but the nursing homes did not get any of the extra funds.

 
 

 
 

 
 

Clipped from: https://skillednursingnews.com/2020/12/nursing-home-providers-sue-for-access-to-153m-in-covid-19-medicaid-rate-boosts/

Three senior living and care organizations in Pennsylvania filed suit against the state over $153 million in additional Medicaid funds allocated in response to the COVID-19 pandemic, charging the Keystone State with treating the money “as its own piggybank and disregarding the substantial need of the Commonwealth’s most vulnerable citizens.”

The petition, filed on December 7 in the Commonwealth Court of Pennsylvania, argues that the state is failing to comply with a statutory obligation to distribute Medicaid funds received from the federal government to nursing facilities.

According to the provider associations — the Pennsylvania Health Care Association (PHCA), LeadingAge PA, and the Pennsylvania Coalition of Affiliated Healthcare & Living Communities (PACAH) — the assessments paid by their nursing facility members contributed to an increase in the Medicaid funds that Pennsylvania received.

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Medicaid is funded by both states and the federal government, with the federal government’s matching share varying by state depending on per capita income. In Pennsylvania, the state makes use of provider assessments, or taxes, that bolster the state share of Medicaid and in turn increase the amount of federal Medicaid dollars that the state can draw down.

In March, the Families First Coronavirus Response Act increased the federal government’s share of Medicaid expenses, or the Federal Medical Assistance Percentage (FMAP), by 6.2 percentage points.

The Pennsylvania providers argue that under Pennsylvania’s Assessment Law, the state Department of Human Services is required to establish “a restricted account in the General Fund for the receipt and deposit of moneys from the assessment [and] any Federal financial participation received by the Commonwealth as a direct result of the assessment.”

The funds that go into this restricted account should be put in some way toward assistance for nursing facility providers, the lawsuit argues. And because of the FMAP increase passed in March, the provider assessments contributed to more federal dollars being drawn down for Medicaid, the groups claimed in the petition.

Specifically, the increased FMAP from provider assessments will lead to “an additional $153 million in funds for Medicaid payments to nursing facilities for 2020 alone,” according to the petition.

The suit argues that the Assessment Law requires the Department of Human Services to distribute all funds from the federal government “as a result of the assessments to the nursing facilities,” but it has not agreed to use the Enhanced FMAP funds for supplemental payments to nursing facilities.

“Instead of using the Enhanced FMAP funds to provide additional payments to the notoriously underfunded nursing facilities caring for Medicaid recipients, the Department is playing a shell game — it is using the Enhanced FMAP funds in lieu of other payments that were already appropriated to the nursing facilities and using those funds to fill budget holes for other programs,” the petition reads.

PHCA president and CEO Zach Shamberg described the lawsuit as “our last resort,” telling Skilled Nursing News on Tuesday that providers have been negotiating with the Department of Human Services since spring on the destination of the enhanced FMAP funds.

“We’re on month eight of those negotiations, and still no dollars have been sent to long-term care providers,” he said. “So this was really our last resort, our last recourse, getting these dollars to where they needed to go.”

The Department of Human Services did not agree.

“This lawsuit seeks only more money for nursing facilities throughout the commonwealth that have already received more than $800 million in taxpayer stimulus,” it said in a statement sent to SNN. “The assertions made in the materials the associations distributed to the media are simply false. The money at issue is being used to support residents of our nursing facilities.”