Legislature(2019 - 2020)SENATE FINANCE 532
02/18/2020 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Medicaid Enrollment and Spending, Long-term Forecast | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
February 18, 2020
9:01 a.m.
9:01:32 AM
CALL TO ORDER
Co-Chair von Imhof called the Senate Finance Committee
meeting to order at 9:01 a.m.
MEMBERS PRESENT
Senator Natasha von Imhof, Co-Chair
Senator Click Bishop
Senator Lyman Hoffman
Senator Donny Olson
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
Senator Bert Stedman, Co-Chair
ALSO PRESENT
Adam Crum, Commissioner, Department of Health and Social
Services; Ted Helvoigt, Economist, Evergreen Economics;
Senator Cathy Giessel.
SUMMARY
^MEDICAID ENROLLMENT and SPENDING, LONG-TERM FORECAST
9:03:24 AM
Co-Chair von Imhof discussed the subject of the day's
meeting:
Continuing out theme of examining cost drivers, today
we will hear from the Department of Health and Social
Services (DHSS) on their latest long-term projection
for Medicaid enrollment and spending.
I believe it is critical that we examine these costs -
not only in the short term, as in the next budget year
- but over the next decade. As a committee we are
considering weighty fiscal topics, including a
spending cap, and we must understand how our largest
cost pressures are trending.
We have a lot to cover today and a short time to do
so, so I ask that members keep their questions focused
to the long-term forecast and trends. We could fill up
weeks of meeting on the topic of Medicaid, and if it
is the will of the committee we will hold further
hearings on issues such as benefits and eligibility.
9:03:30 AM
ADAM CRUM, COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES, introduced himself. He also introduced Mr.
Helvoigt.
9:05:47 AM
TED HELVOIGT, ECONOMIST, EVERGREEN ECONOMICS, discussed,
"MESA FY 2020 - FY 2040; Long-Term Forecast of Medicaid
Enrollment and Spending in Alaska" (copy on file). He
looked at slide 2, "MESA: Medicaid Enrollment and Spending
in Alaska":
1. Background
2. Modeling approach
3. Recent historical trends
4. FY2020-FY2040 projection
5. Chronic conditions and Medicaid
Mr. Helvoigt highlighted slide 3, "MESA: Background":
?First forecast developed in 2005
?20-year projection updated annually
?Assumes current Medicaid structure remains in place
?Provides benchmark for future initiatives
?Provides insight into how individual factors affect
spending
o Population growth and demographic change
o Changes in the rate of Medicaid enrollment
o Changes in the rate of utilization of Medicaid
services
o Changes in the intensity of use of Medicaid
services
o Growth in healthcare price inflation
Mr. Helvoigt pointed to slide 4, "Key Terms Used in Long-
Term Forecast":
?Recipient: A Medicaid enrollee who receives one or
more Medicaid services during a fiscal year.
?Utilization: Annual unduplicated count of Medicaid
recipients who received a specific type of Medicaid
service during a fiscal year.
?Intensity of Use: Amount of the Medicaid service a
recipient receives during a fiscal year.
?Healthcare price inflation: Measure of annual growth
in the costs for healthcare services.
?Date of Service: Forecast is based on the date in
which services were received.
Mr. Helvoigt looked at slide 5, "MESA Modeling Approach":
MESA relies on published data and statistical modeling
to "build" the forecast in consecutive steps.
5. Spending on Medicaid
4. Intensity of Medicaid Use
3. Utilization of Medicaid Services
2. Enrollment in the Medicaid Program
1. Long-term Population Projections
Co-Chair von Imhof wondered whether there was data
available from the Department of Health and Social Services
(DHSS) Medicaid program.
Mr. Helvoigt replied in the affirmative.
Co-Chair von Imhof surmised that it was not public
information, but made into compliance with individual
characteristics.
Mr. Helvoigt replied in the affirmative.
9:10:34 AM
Mr. Helvoigt addressed slide 6, "MESA: Medicaid Enrollment
and Spending in Alaska":
Recent historical trends
Mr. Helvoigt pointed to slide 7, "Substantial Growth
Beginning in FY2016":
Between FY2015 and FY2019?
?Medicaid Enrollment grew by 51 percent (Recipients
grew by 49 percent)
?Federal spending grew by 93 percent
?GF spending grew by 6 percent.
Mr. Helvoigt discussed slide 8, "Per-Enrollee/Recipient
Spending Is Flat":
Over this same period, per-capita healthcare spending
in Alaska experienced rapid growth.
Mr. Helvoigt highlighted slide 9, "Healthcare's Share of
Economy Has Grown":
Medicaid expansion coinciding with Alaska's recession
has increased the relative importance of the
healthcare sector
Co-Chair von Imhof requested information about the reason
for the increase in Medicaid enrollment.
Mr. Helvoigt replied that there were various drivers for
both traditional and expanded Medicaid.
Co-Chair von Imhof wondered whether that data was in the
presentation.
Mr. Helvoigt replied that it was not included in the
presentation.
Co-Chair von Imhof felt that the data could be provided to
the committee at a later date. She wanted to know the
drivers behind the increase, and how much was due to the
expansion and the recession.
Mr. Helvoigt agreed to provide that information.
9:14:52 AM
Mr. Helvoigt pointed to slide 10, "Healthcare Costs Have
Risen Fast":
?Healthcare price inflation is rising faster in Alaska
than in U.S. as a whole
?General price inflation is rising at roughly the same
rate
Senator Bishop felt that the slide should be "handicapped"
for Alaska's population.
Mr. Helvoigt stated that it was an increase in prices.
Senator Bishop felt that there was a direct correlation
between prices and the number of patients.
Mr. Helvoigt replied that it was a change in index that
began at the same point, so it was independent of
demographic or population change.
Co-Chair von Imhof asked for an explanation of why the
Alaska prices were so high.
Senator Wielechowski queried the percentage of working
people on Medicaid.
Mr. Helvoigt replied that the data might be available
through public assistance.
Co-Chair von Imhof requested that information through the
Department of Health and Social Services (DHSS)
Senator Wielechowski queried the impact on Medicaid with a
$15 per hour minimum wage.
Co-Chair von Imhof queried the reason for the increase in
health care costs.
Mr. Helvoigt replied that it was due to a combination of
Anchorage being a smaller and spatially isolated market
with increased consolidation of health care providers. He
stated that it was an environment where providers had
power, so they were dictating prices without insurance
pushing back on those prices.
9:20:46 AM
Co-Chair von Imhof asked for any comment on the 80th
percentile regulation.
Mr. Helvoigt replied that he understood the intent of an 80
percent. He also saw the incentives set up for providers
with respect to billing. He felt that it might have
unintended consequences.
Co-Chair von Imhof remarked that some states had tried to
solve that with balanced billing legislation.
Mr. Helvoigt addressed slide 11, "MESA: Medicaid Enrollment
and Spending in Alaska":
FY 2020 - FY 2040 Projection
Mr. Helvoigt looked at slide 12, "Population: Past,
Present, Future":
The rate of growth in Alaska's population has slowed
considerably in recent decades, and slower growth is
expected to continue.
Mr. Helvoigt discussed slide 13, "Alaska's Population Is
Aging":
Even while overall population growth will remain slow,
the senior population will experience strong growth
through the 20-year projection period.
Mr. Helvoigt pointed to slide 14, "ACA No longer Impacting
Enrollment Growth":
?Growth in enrollment will slow over the projection
period.
?Enrollment of seniors will outpace children and
younger adults.
?Nevertheless, seniors will remain less than 10
percent of enrollees
?Medicaid now covers more adults than children
?In FY2000, median age of Medicaid enrollee was 14
?Today it is 23
?By FY2040, it will be 25
9:25:30 AM
Co-Chair von Imhof noted that the median age of an enrollee
was 23-years-old. He felt that it illustrated the
importance of state's creating job opportunities with a
focus on infrastructure with good paying jobs in
construction services to allow adults the opportunity to
earn out of Medicaid and gain insurance through an
employer.
Mr. Helvoigt displayed slide 15, "Medicaid Enrollment the
Long View":
?In 1999, there were fewer than 100,000 enrollees.
?Today, there are about 250,000.
?By 2040, there will be more than 300,000.
Mr. Helvoigt looked at slide 16, "Spending to Slow, But
Keep Growing":
Between FY2020 and FY2040, we project spending on
Medicaid services will increase on average by 4.6
percent per year.
Co-Chair von Imhof wondered whether it was full spending
for both state and federal funds.
Mr. Helvoigt replied in the affirmative.
Co-Chair von Imhof stressed that there was a hope that
federal funds would increase, because if state funds had to
make up half of the price there must be new revenue or
"crowd out" other spending.
Mr. Helvoigt agreed and stated that goal was to be wrong on
the assumptions.
Co-Chair von Imhof wanted to know how to bend the curve
downward.
9:30:50 AM
Mr. Helvoigt pointed to slide 17, "Healthcare Spending
Increases with Age":
On a per-enrollee basis, spending on Medicaid services
for children will continue to be much lower than for
adults.
Mr. Helvoigt addressed slide 18, "Growth in Medicaid
Spending Will Slow":
?Federal and GF spending will grow at about the same
rate.
?Savings from rebasing offset by decrease in expansion
FMAP+
?Assumes no future changes to FMAPs
Co-Chair von Imhof pointed out that the annual growth rate
of 4.6 percent. She remarked that the committee was
currently considering a spending cap with a significantly
lower growth rate. She reiterating that health care costs
could "crowd out" other spending.
Senator Wilson wondered whether it was a compounded
interest for the spend.
Mr. Helvoigt replied in the affirmative.
Senator Wilson felt it was large.
Mr. Helvoigt agreed, and stated that it was more than
double over the period of time.
9:34:20 AM
Mr. Helvoigt displayed slide 19, "Inflation Will Drive
Spending Growth":
Population, enrollment, utilization, and intensity of
use will have a relatively low impact on spending
growth.
Co-Chair von Imhof queried any recommendations on how to
address the pink line.
Mr. Helvoigt replied that he felt the issue was not a
uniquely Alaska issue solely related to Medicaid. He noted
that there were options of health care reform that could
affect Medicaid, but were not strictly focused on Medicaid
in their implementation.
Co-Chair von Imhof stressed that the data was based on
rational assumptions, and she liked to utilize data to
create policy. She hoped that there could be a way to
address the growth with something like price transparency
or an all payer claims database.
9:40:32 AM
Mr. Helvoigt highlighted slide 20, "Bending the Cost
Curve":
?Cost containment efforts have worked.
?Actual spending on Medicaid has been much lower than
was projected in 2006.
Mr. Helvoigt pointed to slide 21, "Many More Alaskans
Receiving Medicaid Services":
More recipients than expected in 2006 due to features
of the ACA, most notably Medicaid expansion, and the
Alaska recession.
Mr. Helvoigt addressed slide 22, "More Recipients and Lower
Spending Means?":
?Spending per recipient is about $9,000 lower today
than projected in 2006.
?Cost containment initiative by DHSS will likely
continue to suppress growth in spending.
Senator Wielechowski heard that health care costs in the
United States were much higher than anywhere else in the
world, but the outcomes were similar if not worse than
other places in the world. He wondered how other countries
kept their health care costs lower with similar outcomes.
Mr. Helvoigt replied that it was not his area of expertise.
He stated that he could argue both sides, so he could not
opine on the question.
Mr. Helvoigt looked at slide 23, "MESA: Medicaid Enrollment
and Spending in Alaska":
Chronic conditions and Medicaid
9:45:54 AM
Mr. Helvoigt addressed slide 24, "Chronic Conditions and
Age, FY2018:
Most Medicaid recipients do not have a diagnosed
chronic condition
Mr. Helvoigt highlighted slide 25, "Impact of Age on
Chronic Conditions":
? Prevalence of chronic condition is positively
related to age
? Many Medicaid recipients have multiple chronic
conditions
Co-Chair von Imhof wondered whether there were chronic
conditions that could have been prevented with preventative
care. She stressed that it was a rhetorical question.
Senator Wielechowski wondered whether there was a list of
the prevalence of each chronic condition.
Mr. Helvoigt replied in the affirmative. He agreed to
provide that information.
Co-Chair von Imhof stated that she might examine the issue
in the DHSS subcommittee.
Mr. Helvoigt noted the diagnosed chronic conditions versus
the other chronic conditions.
Mr. Helvoigt looked at slide 26, "Chronic Conditions Drive
Spending, FY2018." He explained the different age groups
and chronic conditions.
Co-Chair von Imhof compared slide 24 and slide 26, so she
inferred that 20 percent of the population was driving 80
percent of the cost.
Mr. Helvoigt agreed.
Senator Bishop felt that there was a possibility for a
pilot project by encouraging people to live a healthy
lifestyle.
Mr. Helvoigt discussed slide 27, "Incremental Cost of
Chronic Conditions, FY2018." He explained the columns, as
related to the previous slide.
9:55:40 AM
Mr. Helvoigt highlighted slide 28, "Cost Impact of Chronic
Conditions Will Grow":
Today 73 percent of Medicaid spending is on
beneficiaries diagnosed with one or more chronic
conditions; This will grow to 78 percent by 2040
Co-Chair von Imhof queried the percentage or number of
people out of the total Medicaid population had a chronic
condition.
Mr. Helvoigt replied that it was 61,000 out of 210,000, so
approximately 30 percent.
Co-Chair von Imhof appreciated the presentation. She hoped
that the committee would consider the information from the
presentation.
Mr. Helvoigt thanked the committee for their time.
Co-Chair von Imhof wondered how much longer he would be in
Juneau.
Mr. Helvoigt replied that he would be leaving Juneau the
upcoming Saturday.
Co-Chair von Imhof discussed the following day's agenda.
ADJOURNMENT
10:00:04 AM
The meeting was adjourned at 10:00 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 021820 Ted Helvoigt MESA FY2020-40.pdf |
SFIN 2/18/2020 9:00:00 AM |
Medicaid |