New report analyzes financial impact of potential Medicaid expansion under Idaho ballot initiative – Link & FAQs

MillimanReportThe Department of Health and Welfare has released a new report titled “Financial Impacts from Medicaid Expansion in Idaho,” from Milliman Inc. The actuarial firm analyzed the cost impact of expanding Medicaid in the event a voter-initiated ballot measure passes.

The report indicates that Medicaid expansion in a single year (using the second-year costs because it represents the first year of full implementation) would cost the state about $45 million but will also generate about $40 million in state and local fund offsets. The single year net cost to the state will vary year over year, but the net total 10-year cost estimate from state fiscal year 2020-2030 in state funds is $105.1 million, once costs and savings are accounted for. 

The state match to cover medical claims from this new population under Medicaid expansion is 10 percent of the total claim cost. The federal government will cover 90 percent of the total cost of claims.

Read the full report here.

The following are Frequently Asked Questions related to the new report:

Why did previous Milliman reports on expanding Medicaid in Idaho assume the Catastrophic Health Care Fund (CAT Fund) and counties medically indigent funds would be eliminated?

Several things have changed since the last Milliman report was published. Currently, there is no financial penalty for not having health insurance. When the previous reports were developed, the individual mandate was enforced, so the assumption was that people would either be covered by insurance or Medicaid. Also, premium increases have made it less affordable for individuals who don’t qualify for assistance to afford to purchase coverage, increasing the number of uninsured individuals over 138 percent of the Federal Poverty Level (FPL). These changes have had an impact on the catastrophic fund, making the elimination of the program less predictable without legislative and county action to end the funding permanently.

Can the CAT Fund program or the Medically Indigent Funds program be eliminated?

An elimination of the CAT Fund and the Medically Indigent Funds would require a change to Idaho Code.

Why was the Idaho Department of Corrections (IDOC) recidivism reduction removed from the latest report — are the projected savings gone?

Medicaid expansion will provide substance use disorder treatment to a greater number of offenders in the community than what is currently appropriated to IDOC by state general funds. Research indicates that offenders who engage in treatment are less likely to recidivate, which would result in a future cost avoidance for the state because a percentage of those offenders would not return to prison. Because of a significant number of variables, such as total treatment funds available, optimum amount of treatment required per offender, and availability of community supervision resources, it is difficult to project and quantify this future cost avoidance.

Why are the per-member per-month cost assumptions different in this new report compared to earlier cost projection reports (Jan. 2016)?

The January 2016 Milliman report was based upon emerging cost data that was reflective of 2015, the second year of Medicaid expansion under the Affordable Care Act, with additional adjustments for the new treatments covered for Hepatitis C. At the time of the 2016 report, data was still being gathered on the durational effects of implementing expansion, while today there is more expansion data available upon which to base calculations. There was a Milliman report update on Nov. 18, 2016 that incorporated additional cost adjustments for durational effects of implementing expansion.

Even going back to the Dec. 3, 2014 Milliman report, data on the cost of various options for delivery of care reflected very early emerging experience for some states that expanded Medicaid in January 2014. At the time, there was insufficient data to determine the level of pent-up demand influence versus the steady state cost of care.

The new July 19, 2018 Milliman report incorporated additional cost adjustments for durational effects of implementing expansion and also reflects more informed cost assumptions from the 2017 calendar year of experience. Now that the emerging cost data from states that expanded Medicaid has matured, cost impacts relating to the duration of participation within the program can be modeled.

Last update: July 31, 2018.

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