Impact of Expansion on Coverage

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Improved Patient Outcomes

Enhanced Individual Financial Status

Increased Health System Viability

Enhanced State Financial Position

In Kentucky, after expansion (2014-2016) there was an increase in early stage (1 & 2) breast cancer diagnoses compared to the pre-expansion baseline(2011-2013).

Medicaid expansion was associated with 3.4% increase in all cancer diagnoses and a 6.4% increase in early–stage diagnoses in 611 US counties studied.

In 2014 there was a 13% increase in diabetes diagnoses in the 26 expansion states compared to a 0.4% increase in the non-expansion states.

From 2010 – 2016 Infant Mortality (IM) declined 11% in non-expansion states compared to 15.2% in expansion states.

From 2014-2016 IM increased from 6.4 to 6.5/1000 births in non-expansion states compared to a decline of 5.9 to 5.6/1000 births in expansion states.

The decline in IM from 2010-2015 was most pronounced in African –American infants in expansion states(14.5%) compared to 6.6% in non-expansion states.

10Opioid and other Substance Use Disorders*

• Adults in the expansion population have the highest rate of opioid use disorders among all Americans, and expansion dramatically increases insurance coverage for those with opioid use and other substance use disorders, providing a funding stream for and access to SUD treatment

• Expansion increases access to physical and behavioral treatment for substance use disorders (SUD). For example, adults with opioid addiction and Medicaid coverage are more than twice as likely as those with private insurance or no insurance to have received treatment.

Expansion state residents have greater access to treatment for substance use dependency,

and better treatment outcomes

Since Kentucky expanded its Medicaid program in 2014, Medicaid services for SUDincreased by 700%.

From 2013-2015, there was a 79% decrease in opioid-related hospitalizations for uninsured patients in expansion states.

Expansion increased prescriptions for Medication Assisted Treatment methods for opioid addiction by more than 200% nationwide

*Citations follow on slide 28

Individuals 18-64 y.o. in expansion states have:◦ Higher credit scores

◦ Reduced balances past due as a percent of total debt

◦ Reduced probability of a medical collection balance of $1000

◦ Less likelihood of medical bill going to collections in previous 6 months

◦ Reduction in the probability of a new bankruptcy filing

Hospitals in expansion states saw a decline in uncompensated care cost ,an increase in Medicaid revenue compared to hospitals in non-expansion states ,and an increase in operating and total margins.

Hospitals in expansion states were 84% less likely to close than those in non-expansion states

Expansion of Medicaid for childless adults up to 100% FPL made a hospital 2.5 times less likely to close than those in a non-expansion state.

The higher the uninsurance rate in a county, the greater the impact of Medicaid expansion on preventing rural hospital closure.

The financial benefits due to Medicaid expansion seen in improved total margins, operating margins, and decreased uncompensated care were greatest in areas with previous high uninsurance rates and in rural areas

The best explanation appears to be that childless adults previously seen as uninsured are now Medicaid clients due to expansion.

All Hospitals◦ Median operating margins – 6.5%◦ Median total margins – 0.1%◦ 52% of all hospitals had negative total margins and 75% had

negative operating margins Rural Hospitals◦ Median operating margins – 12.2%◦ Median total margins – 3.5%◦ 88% negative operating margins

State savings from enhanced federal matching rate◦ Pregnant women Maryland $8.2m West Virginia $3.8m Washington $31.5m Arkansas $15.2m

◦ Disability avoidance Kentucky $7.9m Arkansas $17.1m

State savings from replacing general funds with Medicaid funds

◦ Savings from Behavioral Health Michigan $190m Kentucky $21m

◦ Savings from enrolling Inmates Michigan $19m Colorado $5m

State Revenue Gains◦ Increased assessments on insurers and providers California $985m New Mexico $30m Maryland $26.6m Michigan $26m

Increased Employment◦ Louisiana – 1000 new jobs & $4b in new revenues for

providers in FY17◦ In 2014 expansion states had job growth of 2.4% compared

to 1.8% in non-expansion states Example of Financial impact of Expansion◦ LA saved $199m in FY17 and projects >$350m in FY18

18Corrections and Recidivism*

• Prisoners have high rates of mental health problems (56% of State prisoners), substance use addiction (67% of prisoners), and communicable and chronic diseases

• With expansion, most prisoners are Medicaid eligible upon release and can be connected to coverage and care, including for treatment of behavioral health conditions

• Linking prisoners to coverage prior to or upon release improves access to needed care and reduces recidivism

Expansion provides new opportunities to connect prisoners to health care following

release, reducing recidivism

New York and Colorado have estimated that 80 and 90% of their prison populations, respectively, were eligible for Medicaid.

In Ohio, Governor Kasich noted a 10% recidivism rate among prisoners who received addiction treatment after Medicaid expansion.

In Washington, a study done prior to expansion showed enrollment of prisoners in Medicaid resulted in 16% fewer detentions in the year after release.

*Citations follow on slide 28

2020-2023

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Alabama Medicaid Expansion Would Provide Coverage for Parents and Other Low-Income Adults Up to 138% FPL

Alabama Adult Eligibility Levels (% of FPL)

Pregnant women

Aged 65 + or disabled

Parents

Most other adults*

Pre-Expansion Post-Expansion Varies based on long-term care and disability status

138%

141%

13% 138%

2018 Annual Income Corresponding with Selected Alabama Eligibility Limits, by Family Size

FPL 1 2 3 4

13% $1,578 $2,140 $2,701 $3,263

74% $8,984 $12,180 $15,377 $18,574

138% $16,753 $22,715 $28,676 $34,638

141% $17,117 $23,209 $29,300 $35,391

* Additional adults covered pre-expansion include those in need of family planning services (141% FPL); and women with breast/cervical cancer (200% FPL)

** SSI (Supplemental Security Income) level for aged, blind or disabled*** HCBS waiver eligibility level, eligibility for specific waivers depends on long-term care and disability status

74%** 231%***

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Alabama Medicaid Expansion Is a Unique Opportunity to Invest in the Health Care System

In the first year of expansion:• Alabama would receive almost $2 billion in new federal Medicaid funds,

which in turn would result in more economic activity, higher state and local tax revenues, and lower uncompensated care costs

• More than 326,000 would gain coverage• More than $58 million in current State spending could be replaced with

federal funds• State costs would be between $126 and $158 million, after accounting for

State savings from expansionAnd coverage, state budget savings and economic gains from expansion would all increase over time.

The State savings and other economic gains from expansion could be reinvested in the health care system in Alabama, including to support

expansion and other State priorities.

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Summary of Alabama Medicaid Expansion Estimated New Federal Funds and State Costs, SFYs 2020-2023

SFY 2020 SFY 2021 SFY 2022 SFY 2023Number of new enrollees

Lower Estimate 326,700 337,300 345,900 353,400

Upper Estimate 387,000 398,200 407,400 415,500

New federal Medicaid spending in Alabama

Lower Estimate $ 1,715,800,000 $ 1,813,000,000 $ 1,920,100,000 $ 2,027,100,000

Upper Estimate $ 2,013,400,000 $ 2,121,400,000 $ 2,242,400,000 $ 2,364,000,000

New State Medicaid spending in Alabama, prior to savings offsets

Lower Estimate $185,500,000 $212,100,000 $224,200,000 $236,400,000

Upper Estimate $216,600,000 $247,200,000 $260,900,000 $274,700,000

State savings from expansion

Savings from Medicaid and non-Medicaid programs ($58,900,000) ($82,500,000) ($86,800,000) ($87,600,000)

Remaining State costs if savings are re-invested in expansion

Lower Estimate $126,600,000 $129,500,000 $137,400,000 $148,700,000

Upper Estimate $157,700,000 $164,600,000 $174,100,000 $187,100,000

Note: Figures in tables may not sum to totals due to rounding

Figures above do not include higher state and local tax revenues from increased economic activity and lower uncompensated care costs for providers.

343,000* new Medicaid enrollees. 60,000 would be moving from a market place plan , resulting in 283,000 new enrollees bringing additional federal funds to the state.

93% FMAP in 4th quarter of calendar year 2019 and 90% in 2020 and beyond

Per Capita spend of $6120n in 2020. Administrative cost of expansion 1.55% of total yearly

benefit cost

* Becker report 01/2019

** Manatt estimates first year enrollment of 326,000 – 387,000. Manatt 02/2019

2020 2021 2022 2023 Total

Alabama Cost

$227 $251 $258 $265 $1,001

FederalInvestment

$1,969 $2,018 $2,080 $2,130 $8,197

Total Spend

$2,196 $2,269 $2,338 $2,394 $9,197

By forgoing expansion, Alabama is losing over $8 billion of direct economic benefit over the next four years.

Manatt estimates year one Alabama cost at $185 – 216m and federal investment at $1.7 – 2.0B

Savings by utilizing enhanced match rate◦ Pregnant women◦ Disability population◦ Breast & Cervical Cancer treatment program

Using Federal Medicaid funds for activities currently paid with state resources◦ Behavioral health & Substance abuse◦ Prisoners

Enhanced State Revenue through increased tax payments◦ Direct Revenue to providers◦ Indirect revenue due to economic Multiplier

State Savings from Accessing Enhanced Federal Matching Funds

Pregnant women: $13.0 million

SSI blind or disabled: $11.5 million

HCBS waiver enrollees: $0.6 million

Breast & cervical cancer: $0.8 million

Family planning: $0.1 million in SFY 2020 only

Using Federal Medicaid Funds to pay for Activities Currently Paid with State Resources

Inpatient hospital care for prisoners: $12.2 million

Mental health and substance use programs: $33.1 million

Public health programs: $16.5 million

Enhanced State Revenue and Taxes

2020 2021 2022 2023 Total

Direct $1,623 $1,661 $1,712 $1,753 $6,749

Indirect* $1,114 $1,139 $1,173 $1,201 $4,628

Total Impact

$2,737 $2,800 $2,885 $2,954 $11,377

*assumes an economic multiplier of 0.65 -0.75

Federation of Tax Administrators estimate Alabama’s tax burden at 8.5% of income◦ 5.3% state tax rate◦ 3.2% local

FY20 - $2.737 billion @ 5.3% = $145 million in new revenue that will be available in FY21

FY21 - $2.800 billion @5.3% = $148million in new revenue that will be available in FY22

FY22 -$2.885billion @5.3% = $153 million in new revenue that will be available in FY23

FY23 - $2,954 billion @5.3% = $157 million in new revenue that will be available in FY24

2020 2021 2022 2023 TotalState Cost of Expansion

$227 $251 $258 $265 $1001

New Tax revenue

** $145 $148 $153 $446*

Savings from Expansion *

$59 $83 $87 $88 $316

Net $168 $ 23 $23 $24 $239

**$145m in tax revenue generated in FY20 available for use in FY21

*does not include $157m in tax revenue generated in FY 23 for use in FY24

Improves health outcomes for real people

It improves the financial status of our citizens

It helps keep health care in rural areas

It provides over $11billion in economic impact to Alabama over 4 years.

“There is a tide in the affairs of men, Which taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat. And we must take the current when it serves, or lose our ventures.”

BrutusJulius Caesar