Building a Roadmap for Financing Long-Term Services & Supports

Refined MassHealth Expansions and Layering of our Proposals

Long-Term Care Financing Advisory Committee

January 13, 2010

Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

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Overview of presentation

1. Public input sessions

2. Review and preview of analytic work

3. Refined Medicaid expansion proposals

4. Layering of the Roadmap

5. Committee business

Section 1

Public Input Sessions

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Goals and format

Goals: Inform the public about both the challenges the Commonwealth faces in

financing LTS and the work of the Advisory Committee Collect feedback on the financing options currently being considered by

the Advisory Committee

Basic Format: Legislative briefing (60 minutes) - one week prior to public events Public input sessions -

45-minute presentation of current state of LTS financing and Advisory Committee’s work over the last year, including options for reform

75-minute small-group discussions of questions related to financing options

Possible use of “first responders” and/or large group discussion of personal involvement with LTS financing

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Accessibility and input opportunities

All materials and language used shall be accessible to the general public, and will not include jargon or references to specific knowledge base

Additional input opportunities: Post presentation on website with PowerPoint and transcript Website at which people can view topics/questions and submit

responses/comments Use press release and social networking site(s) to direct traffic to site

Create registration site to facilitate tracking anticipated number of participants

Distribute topics/questions in advance (at time of invitation) Ask organizations to do outreach to constituencies and perhaps collect info

on pre-distributed questions prior to session(s) – challenge of context?

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Participants

Participants: Advisory Committee: 2-3 members (including at least one convener)

1-2 members to be “first responders” to presentation? Public: three populations

Current consumers of LTS: younger people with disabilities, elders, and caregivers

Future consumer of LTS: people planning (or not) for their future LTS needs Professionals: providers, trade organizations, etc.

Challenges: Targeting specific groups could require different strategies Different levels of knowledge of LTS system Discussions in small groups highly dependent on participant mix

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Content

Presentation (45 minutes)

Introductions of Advisory Committee members Status update on work and scope of Committee Description of current LTS financing system and its

challenges Options for reforming LTS financing

LTC Insurance Partnership model Public contribution program MassHealth expansion/improvements

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Content (2)

Small group discussions (75 minutes)

Problem statement providing context for each option Discussion questions

Focus on fostering conversation, not eliciting technical information

Requesting assistance in considering the financing options, not presenting them as a plan

~25 minutes for each topic LTC Insurance Partnership model Public contribution program MassHealth expansion/improvements

Report back to large group – key themes and comments that raise new issues

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Draft discussion questions

“The Commonwealth needs multiple solutions to the LTS financing challenges it faces. These solutions need to be focused on all levels of the financing system, both public and private. We would like your assistance in thinking about the best way to craft these solutions.”

Each financing option will be prefaced with a brief description of how the financing option might impact an individual/family in terms of cost, coverage and access - i.e., cost of premiums, change of eligibility, and/or benefit level. An example: “As currently structured, the federal contribution program

would require individuals to pay an average of $125/month in premiums for at least five years in order to qualify, and then would provide a LTS benefit of $50-100/day depending on the level of need.”

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Draft discussion questions (2) Possible discussion questions:

LTC Insurance Partnership model: Would the LTC insurance products available under a Partnership model,

with the protections and benefits described, provide a sufficient incentive for you to purchase LTC insurance? What would make LTC Insurance more attractive to you?

Public contribution program: Would a contribution program like the federal program previously

described be attractive to you (what would make you want to participate)? What information would you want to have in order to feel comfortable participating? If you had to pay, would this feel worth it? How do you think this program would address the issues that the current system faces?

MassHealth expansion/improvements: As we strive to ensure there are options for financing LTS for all people in

MA, would you support improvements/small expansions to the Medicaid program, such as those described previously, to provide LTS to low-income seniors and people with disabilities?

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Schedule

Legislative briefing – January 26th from 12-1 PM

Three events in early February:

Downtown Boston – Transportation Building

Tentatively scheduled for February 2nd – afternoon

Worcester area

Tentatively scheduled for February 8th – late afternoon/evening

Western Massachusetts – Northampton Council on Aging

TBD

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Advisory Committee input

Outstanding questions: Outreach:

What organizations can help? Do different populations need to have different marketing materials?

Attendance: How much would time and location affect participation? Do we need to

have daytime and evening sessions? Can at least 2-3 Advisory Committee members attend each session?

Do all the sessions have the same format, with the same target audience?

Do the draft discussion questions elicit information that will be helpful in the consideration of the financing options?

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Section 2

Review and Preview of Analytic Work

Recap of last month

Assessed potential Medicaid cost avoidance from CLASS, mandatory state contribution program (our model) and LTC Partnership program (our model)

Key points: Take-up rates from voluntary programs (CLASS, Partnership):

Make small impact on Medicaid cost avoidance Leave many without financing options (except to spend-down) Could be increased with targeting, group LTCI coverage with conversion

requirement, financial incentives (didn’t seem to be appetite for subsidies) Mandatory state contribution program makes bigger splash, but need to:

Carefully design the program (eligibility, benefits, premiums, etc.) Thoughtfully propose and explore impact of a new mandate Exempt or subsidize those for whom it is unaffordable

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Recap of last month (2)

Medicaid expansions can help address unmet need among lower-income and minimize likelihood of spend-down

Various options for expanding Medicaid with a broad range of costs Cost estimates depend on population selected, benefits selected,

utilization

Our Medicaid expansions focus on 2 key gaps in coverage: Disparities in financial eligibility for Medicaid for seniors

Ineligible for Medicaid coverage because income/assets higher than current limits

Disparities in access to HCBS once in Medicaid for younger people with disabilities

Ineligible for HCBS waivers because not at institutional level of care or do not meet disability eligibility criteria (not “right” type of disability)

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Today’s presentation

Refined Medicaid expansion proposals from last month: Focused policy parameters on most critical gaps in coverage Targeted only to those with self-care needs Included asset information

Financial eligibility expansions to seniors with self-care needs (new enrollees eligible for existing LTS) Up to 200% FPL with increase in asset limit Up to 300% FPL with increase in asset limit

Service expansions to younger people with disabilities with self-care needs (new LTS to existing enrollees) Limited v. comprehensive benefit package Targeted v. broad population

Layering and sequencing of public and private LTS financing mechanisms Begin discussion on how programs fit together over time

Take away points from today’s presentation

There are various options for achieving equity in Medicaid coverage for seniors and people with disabilities

We focused on 2 key coverage gaps

Targeted Medicaid expansions cost money, but do not “break the bank”

First cut on MassHealth expansion entails policy options and cost estimates for possible expansions

Ultimately, must also address administrative infrastructure, financing (new or redistributed?), care delivery mechanisms, incremental implementation, etc.

Need to finalize public and private financing options to be able to layer and sequence proposals

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Section 3

Refined MassHealth Expansion Proposals

Goal: Equity in MedicaidEnsure that similarly situated seniors and people with disabilities have access to the same services

Coverage gap #1: Medicaid financial eligibility rules create access inequities

People with disabilities at any income or asset level can access MassHealth state plan services (Standard or CommonHealth) Sliding scale premiums apply at higher income levels One-time spend-down for non-working disabled adults in CommonHealth

Only Seniors below 100% FPL and with assets below $2,000 can access MassHealth state plan services (Standard) Seniors with income above 100% FPL can access MassHealth by

spending down their income to $522/month or 58% FPL

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Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

Visual of current financial eligibility disparities

Income Assets

$0

$2,000

$4,000

$6,000

$8,000

$10,000

Ass

et L

imit

$109,560

Community spouse of nursing home resident

CommonHealth

Elderly couple, not N.F. level of care

Single

0%

50%

100%

150%

200%

250%

300%

350%

Perc

enta

ge o

f Fe

dera

l Pov

erty

Lev

el

maximum

minimum

MassHealth income standard for deductible Elderly eligibility, MassHealth Standard Non-elderly disabled eligibility, MassHealth Standard Community spouse of nursing home resident CommonHealth

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Projected cost to expand Medicaid financial eligibility to seniors (age 65+) with self-care needs

Expand Eligibility for Seniors (age 65+), Community-based with Self-care Needs (ADLs)

# of new Members

who would receive existing services

Covered months of

Care

 PMPY – Base

(for full year)

Cost Estimates in Millions of Dollars

Low Case Base Case High Case

1. Increase income eligibility for seniors from 100% to 200% FPL, asset limit increased to $10,000

10,000 115,000 $14,000 $100 $130 $160

2. Increase income eligibility for seniors from 100% to 300% FPL, asset limit increased to $10,000

12,000 124,000 $14,000 $120 $150 $180

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Eligibility is based on when a senior would spend down their assets during the year Seniors with more assets would take longer to spend down their assets and be

eligible for fewer months of care

Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

Notes and assumptions on expanding financial eligibility

Assumes current benefit package The $14,000 PMPY is based on the assumption that 2/3 of new enrollees age

65+ with self-care needs utilize services at the same rate as community LTS users, exclusive of waiver enrollees, and 1/3 utilize services at the same rate as frail elder waiver enrollees.

Base case = 100% of projected cost; Low Case = 80% of Base Case costs. High Case = 120% of Base Case costs.

There are approximately 10,000 seniors with self-care needs under 200% FPL (ACS data) who are not currently enrolled in MassHealth. National asset data indicates that this population has few assets other than home equity (US Census). We assume that all 10,000 will spend-down to Medicaid eventually. The number of months required to spend-down to Medicaid eligibility is determined by the asset limitation.

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Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

Notes and assumptions on expanding financial eligibility (2)

Currently, seniors with income higher than the current Medicaid income limits can spend-down to Medicaid by spending a portion of their income on health care costs that would otherwise be paid by Medicaid. If the income eligibility level is increased, Medicaid would pick up more of these costs. The cost estimates for financial eligibility expansions include an estimated $20-$40 million in costs that Medicaid would assume for current members.

We assume that the federal government would pay 50% of any expansion costs, but that 50% is not deducted from these cost figures.

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Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

Notes and assumptions on expanding financial eligibility (3)

Assumes the following average assets per person (50%/50% blended rate of one- and two-person family assets) [Source: US Census]

100% – 199% FPL - $4,700 200% – 299% FPL - $26,000

Average time to spend down assets to required level (based on the above assets and monthly cost of care)

$2,000 of assets 100% – 199% FPL – 2.4 months

$10,000 of assets 100% – 199% FPL – 0.0 months 200% - 299% FPL – 14.1 months

Therefore, a member with $4,700 in assets would need to spend down their assets on care for approximately 2 months ($2,000 asset test); whereas, that person would be immediately covered at an asset test of $10,000

Assumes the assets per person follows a normal distribution where almost all people’s income levels would be included in 3 standard deviations

This assumption was made to calculate how many months of care people would receive For example, if the average 200%-299% FPL member would spend down in approximately 14 months

then 50% of members would spend down their assets in14 months or less Within this subset, each person would spend down their assets at various times throughout the year

For example, one person may have the assets to pay for 3 months of care prior to qualifying whereas a different individual may need to pay for their own care for 11 months prior to qualifying

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Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

Goal: Equity in MedicaidEnsure that similarly situated seniors and people with disabilities have access to the same services

Coverage gap #2: Once eligible for MassHealth, coverage rules create access inequities to key HCBS

Seniors can access medically necessary Medicaid state plan services… And a broader range of non-medical HCBS through SCO, Frail

Elder waiver and state-funded home care program

People with disabilities can access medically necessary Medicaid state plan services… But must have a specific disability - developmental disability,

traumatic brain injury, acquired brain injury (soon) or autism (for kids only) - and be at an institutional level of care to access a broad range of non-medical HCBS through a waiver

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Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

Projected cost to expand access to HCBS for current Medicaid members with disabilities (age 19-64) with self-care needs

Expand Access to HCBS to Current Members with Disabilities (age 19-64) with Self-care Needs (ADLs)

# Current Members who would receive

additional services

Cost Estimates in Millions of Dollars

PMPY - Base Low Case Base Case High Case

1. Provide Limited HCBS package to targeted group of 10,000 members with disabilities

10,000 $15,000 $120 $150 $180

2. Provide Limited HCBS package to 30,000 MassHealth members with disabilities*

30,000 $15,000 $360 $450 $540

3. Provide Comprehensive HCBS package to targeted group of 10,000 members with disabilities

10,000 $27,000 $220 $270 $320

4. Provide Comprehensive HCBS package to 30,000 MassHealth members with disabilities*

30,000 $27,000 $650 $810 $970

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* ACS data identifies 40,000 people in MA between the ages 19 - 64 with disabilities under 200% FPL who self-identify as having self-care needs. Currently, 10,000 MassHealth members with disabilities receive HCBS through a waiver.

Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

Notes and assumptions on expanding access to HCBS

Case Management Family Support/Community Habilitation Individual Support/Community Habilitation Grocery Shopping/Delivery Home-delivered meals

Homemaker services Laundry services Respite care Supportive employment Peer counseling

Limited benefit package could include services such as:

Comprehensive benefit package includes limited benefit package plus services such as:

Companion services Assistive Technology Non-medical transportation Specialized medical equipment Expanded counseling Medical management Chore services Behavioral health services (for those who currently do not have access to BH services)

Skilled Nursing Environmental adaption Agency personal care Home Health Aide Home-based wandering service Supportive Home Care Aide Day services

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*These benefit packages do not include residential habilitation.

Notes and assumptions on expanding access to HCBS (2)

Base case = estimated PMPY x number of enrollees. Low Case = 80% of Base Case costs. High Case = 120% of Base Case costs.

We assume that the federal government would pay 50% of any expansion costs, but that 50% is not deducted from these cost figures.

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Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

Expansion options not included in this analysis

Although we chose 2 key coverage gaps to address, there are a number of eligibility/service expansion options that we could consider to address inequities in Medicaid

For example, others include: Expand access to PCA for MassHealth members with mental or

cognitive disabilities who not require hands-on assistance (who need assistance with cueing and monitoring)

Expand access to CommonHealth (and Medicaid state plan service) for non-working people with disabilities by easing the one-time deductible rules

Expand access to behavioral health services for seniors on MassHealth

Efforts in many of these areas are included in MA’s larger Olmstead plan activities

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Section 4

Layering of the Roadmap

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Layering and sequencing of LTS financing options

To develop recommendations we need to:

1. Finalize our mix of public and private financing options so we can start to layer and sequence

Difficult to try to intersect several different future scenarios

2. Layer the private and public options: Analyze how public and private options are likely to interact, e.g., net coverage

levels, cost exposures, and cost offsets Relationship between voluntary federal effort and state initiatives

3. Sequence the recommendations in time: Recommend when in the multi-year roadmap we should take actions (e.g.,

implement a state contribution program) When we should make expenditures (e.g., for a Medicaid expansion or to establish

a state contribution program) When cost offsets are likely to occur (e.g., estimate the time from taking an action

or making an expenditure until benefit from cost offset)

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Low High

FINANCIAL RESOURCES

High

LTSNEED

Low

Medicaid (Expanded)

Medicaid Spend-down

LTS financing system with our proposed changes

Contribution Program

Personal ResourcesConsumer ProtectionsInformal Caregiver Support

LTC InsuranceLTC Partnership

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With these changes, have we actualized a LTS system that achieves our key objectives?

1. Ensure a strong public safety net for the poor and most vulnerable.

2. Limit financial pressure on the state financing system so that state funds are preserved for those most in need.

3. Encourage personal responsibility for financing LTS to the maximum extent possible.

4. Enable middle-income people of all ages to access the LTS they need without becoming impoverished.

5. Ensure appropriate participation of and support for informal caregivers.

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Questions to consider/discuss (assumes CLASS passes):

Do our proposals expand financing options and maximize coverage levels to the greatest extent possible?

Is the Medicaid cost avoidance significant enough to justify promoting private interventions?

Do we want/need to adjust Medicaid more to complement private interventions?

To what extent should we talk about a mandatory (v. voluntary) state contribution program to supplement CLASS? With or without subsidies for those for whom it is unaffordable?

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Section 5

Committee Business

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Committee business

Legislative briefing and Public input sessions Legislative briefing: January 26th

Public input sessions: Boston: tentatively February 2nd

Worcester area: tentatively February 8th

Western MA: TBD

Next meeting Date: Thursday, February 25th, 2010 from 9:00 -11:30am Location: One Ashburton Place, 21st Floor

Future meetings?

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