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Medi-Cal Cost Sharing Model

Capitol Policy Briefing, Sacramento, CA January 27, 2005

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PrefaceThis presentation was prepared for a legislative briefing held in Sacramento on January 27, 2005. It contains minor edits to the original.

PricewaterhouseCoopers developed a Medi-Cal Cost Sharing Financial Model to estimate the change in aggregate program enrollment, utilization, and expenditures resulting from various cost sharing requirements and benefit plans for California’s Medicaid beneficiaries.

The model was developed based on benefit design and cost sharing options discussed by the Department of Health Services at a meeting of the Medi-Cal Redesign Benefits and Cost Sharing Workgroup held in the Spring of 2004. The final model, which was used to estimate the impact of the Governor's January 2005 proposal for Medi-Cal cost sharing, reflects extensive feedback from the Technical Advisory Group created for this project.

A more complete description of the model is available in the full report, “Medi-Cal Cost Sharing Model: Technical Report and User Guide,” which can be found on www.chcf.org.

This work was preformed from June through December 2004. Development was supported by joint funding from the California HealthCare Foundation and The California Endowment.

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Meeting Agenda

A. Introductions

B. Project Goals

C. Medicaid Redesign Nationally

D. The Pricing Model

E. Focused Literature Review

F. Review of the Governor’s Proposal

G. Pricing the Governor’s Proposal

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A. Introductions

Technical Development by PwC

Sponsored by the California HealthCare Foundation and The California Endowment

Technical Advisory Group

Held a series of meetings to review structure and assumptions

Conducted a focused literature review

End product considers this input, but is the responsibility of PwC

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B. Project Goals

Develop model to assess Medi-Cal program options

High level model estimates possible changes in benefits and/or cost sharing for a portion of the Medi-Cal population and changes to budget

Potential changes are expressed as % of physical health, acute, and long term care program costs

Results apply most directly to the FFS population

Changes in costs for managed care related to copaymentsrequire change in contracted rates

Basic structure of model and assumptions may be useful in other states

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B. Project Goals

PwC asked to model the impact of cost sharing changes proposed by Governor

PwC will also model leading proposals that emerge from the legislative debate

Requests for modeling should be addressed to Chris Perroneat the California Healthcare Foundation

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C. Medicaid Redesign Proposals Across the Nation

Many states are considering cost containment options for their Medicaid programs

Some states made changes in the past several years:

Oregon Minnesota

Tennessee Hawaii

Proposals address specific aspects of design:

Coverage of non-traditional Medicaid populations

Implementing or changing premium requirements

Point-of-service cost sharing

Limitations on covered services

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D. The Pricing Model

General Approach

Limitations

Structure

Default Assumptions

Output

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D.1 The Pricing Model – General Approach

Uses Medi-Cal FFS data

EDS Paid Claims for CY 2002 & 2003

Combines detailed data analysis and assumptions to assess effect of program change

Changes in covered services and benefit design

Changes in cost sharing

Changes in healthcare costs are expressed as a percent of the budget (administrative costs are not calculated)

Provides order of magnitude cost estimates that should be considered within a range of likely results

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D.2 The Pricing Model - Limitations

Does not include comprehensive dental and mental health data

Does not include managed care experience data

Results apply to Medi-Cal only Model does not measure effect on the healthcare delivery system at large

Does not measure changes in morbidity or mortality

Cannot directly measure effect of family premium cap or utilization cap

If family caps are part of benefit design, savings are overstated

Medicare Part D prescription drug program is not considered

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D.3 The Pricing Model - Structure

Measures differences in costs by

Eligibility (aid code)

Service category (e.g., inpatient, outpatient, professional)

Ad hoc analysis is required for certain benefit designs

E.g., limits on numbers of covered services or dollar value of services

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D.3 The Pricing Model – Structure

Eligibility groups

Medi-Cal eligibility categories are grouped to reflect areas of program flexibility

• Fourteen eligibility groupings

• Subset by age and income level

Some standard eligibility categories are subset to reflect federal limitations

• E.g., Dual eligibles who are institutionalized, Pregnant women

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D.3 The Pricing Model – Structure

Income determination

Four income levels

• Maintenance Need or < 50 % FPL

• Above Maintenance Need or 50% to < 100% FPL or SSI/SSP level

• Above SSI/SSP or 100% to < 150% FPL

• 150% FPL +

Income level is determined by eligibility category or CPS survey

• Accurate data on income level are not tracked on the DHS eligibility file

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Includes adjustments for utilization effects

Also considers

Corollary effects

Substitution effects

Add-back effects

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Benefit designs

Can model up to 5 benefit designs at one time

Can differentially apply copayments

Can exclude some or all optional services

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D.3 The Pricing Model - StructureMedi-Cal Cost SharingFinancial ModelingWorksheet 1. Description of Population

Children; Age Under 21 Adults; Age 21 and Over

Eligibility CategoryMaintenance Need or 50% FPL & Under

Above Maintenance Need to 100%

FPL

101% - 150% FPL

151% FPL & Over

Maintenance Need or 50% FPL & Under


FPL

101% - 150% FPL

151% FPL & Over

Pregnant Women 1 1 1 1 1 1 1 1Restricted Benefit 1 1 1 1 1 1 1 1Income Eligible - Institutionalized - Dual 1 1 1 1 1 1 1 1Income Eligible - Institutionalized - Non Dual 1 1 1 1 1 1 1 1Income Eligible - Families 1 1 2 2 1 1 2 2

Income Eligible - SSI-Dual 1 1 3 3 1 1 3 3

Income Eligilbe - SSI-Non Dual 1 1 3 3 1 1 3 3

Medically Indigent 1 1 1 1 1 1 1 1

Medically Needy - Institutionalized - Dual 1 1 1 1 1 1 1 1

Medically Needy - Institutionalized - Non Dual 1 1 1 1 1 1 1 1

Medically Needy - Families 1 1 3 3 1 1 4 4

Medically Needy - SSI-Dual 1 1 1 1 1 1 1 1

Medically Needy - SSI-Non Dual 1 1 3 3 1 1 3 3

Other 1 1 4 4 1 1 4 4

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Plan A

Plan B

Plan B

Exempt

Plan B

Exempt

Plan B

Plan C

Exempt

Plan A

Plan B

Plan B

Exempt

Plan B

Exempt

Plan B

Plan C

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Plan A

Plan B

Plan B

Exempt

Plan C

Exempt

Plan B

Plan C

Exempt

Plan A

Plan B

Plan B

Exempt

Plan C

Exempt

Plan B

Plan C

Exempt All Children100% FPL & Under

Exempt All Children101% FPL & Over

Exempt All Adults100% FPL & Under

Exempt All Adults101% FPL & Over

Repopulate w ith Original Plan Design Specif ications

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt

Exempt Exempt Exempt Exempt Exempt Exempt Exempt Exempt

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Analysis by service category

Key Mandatory and Optional services

Certain “optional” services are mandatory for some population groups

• E.g., DME for Long Term Care Eligibles

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Types of Cost Sharing

Premium

Point-of-Service copayments

Can select level of premium and cost sharing for each eligibility group

Where copayments are required, can include an out-of-pocket maximum

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D.3 The Pricing Model - StructureM edi-Cal Cost SharingFina ncia l ModelingW orkshee t 2. Description Of Copa y Leve lsBenefit Pla n A

Plan A

Physician Services Inpatient Hospital Outpatient Pharmacy

E&M $2.00 Maternity $0.00 Med/Surgical $20.00 ER $20.00 Brand $4.00EPSDT $0.00 Specialis t $4.00 Maternity $0.00 Other $4.00 Generic $2.00

Ps ych $4.00 Ps ych $10.00 Fam ily Planning $0.00OTC $2.00

DM E / Supplies Path / Lab Transportation Professional Therapies Other Prof - Non-Therapies

Per Unit $5.00 Per Service $5.00 Per Service $2.00 Per Unit $5.00 Per Adm it $5.00

LTC-ICF/SNF/Rehab Other LTC M ental Health V ision W aiver

Per Unit $5.00 Per Unit $5.00 Per Service $5.00 Per Vis it $5.00 Per Unit $5.00

Other Services

Per Unit $5.00

Go to Benef it Plan B

Apply Copay Apply Copay Apply Copay Apply Copay

Apply CopayApply CopayApply CopayApply CopayApply Copay

Apply Copay Apply Copay Apply Copay Apply Copay

Go to Benef it Plan C

Go to Benef it Plan D

Go to Optional ServicesCovered by Benefit Plan A

Apply Copay

Apply Copay

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D.3 The Pricing Model - StructureM e d i-C a l C o s t S h a r in gF in a n c ia l M o d e lin gW o rk s h e e t 3 . E x c lu s io n s b y D H S O p t io n a l V e n d o r C a te g o ryP la n A

M a in S e rv ic e C a te g o ry D H S V e n d o r C a te g o ry M a in S e rv ic e C a te g o ry D H S V e n d o r C a te g o ry

P ro fe s s io n a l S e r v ic e s M e n ta l H e a lth

V is io n

O th e r P ro fe s s io n a l W a iv e r(N o n -T h e r a p ie s )

O th e r S e rv ic e s

P h a rm a c y

L o n g T e rm C a re

D M E / S u p p lie s

0 2 6 a - B ra n d

0 2 6 b - M e d ic a l S u p p lie s

0 4 1 - B lo o d B a n k

0 4 5 - H e a r in g A id D isp e n se r

D u ra b le M e d ic a l E q u ip m e n t

0 3 0 - C h iro p ra c to r

0 4 7 - IC F / D D

0 8 0 - N u rs in g F a c ility

0 5 9 - C o u n ty H o sp - R e h a b F a c ility

0 6 9 - C m m ty H o s p - R e h a b F a c il ity

0 7 9 - In d e p e n d e n t R e h a b F a c il it y

0 8 3 - P e d ia tr ic S u b a c u te R e h a b

0 3 2 - P o d ia tr is t

0 3 3 - A c u p u n c tu r is t

0 3 4 - P h ys ic a l T h e ra p is t

0 3 5 - O c cu p a t io n a l T h e ra p is t

0 3 6 - S p e e ch T h e ra p is t

0 3 7 - A u d io log is t

0 0 5 - N u r se M id w ife

0 0 7 - C e r td P e d ia tr ic N u r se P ra c t

0 0 8 - C e r td F a m ily N u rs e P r a c t

0 0 9 - R e sp ira to r y C a re P ra c t

0 1 3 - N u r se A n e th e t is t

0 3 1 - P s yc h o log is t

0 3 8 - P ro s th e t is t

0 3 9 - O r th o tis t

0 5 4 - C o u n ty H o sp - S h o rt /D o y le

0 6 4 - C m m ty H o s p - S h o r t/D o y le

0 7 4 - C o u n ty M H H o s p - S h o r t/D o y le

0 1 1 - F a b r ic a t in g O p tic a l L a b

0 1 2 - O p to m e tr ic G ro u p

0 2 8 - O p to m e tr is t

0 2 9 - D is p e n s in g O p t ic ia n

0 0 1 - A d u lt D a y H e a lth c a re C e n te r

0 7 3 - A ID S W a iv e r S vc s

0 8 1 - M S S P W a ive r S v c s

0 0 2 - M e d ic a re C ro s s o ve r P ro v id e r

0 0 4 - G e n e t ic D ise a s e T e s t in g

0 4 0 - O th e r P ro v id e r

0 5 5 - L o c a l E d u ca t io n A g e n c y

0 8 2 - E P S D T S u p p le m e n ta l S v c s

F a m ily P la n n in g

0 2 6 a - G e n e r ic

0 2 6 a - F a m ily P la n n in g

0 2 6 a - O v e r th e C o u n te r

0 7 1 - A d u lt D a y H e a lth c a re C e n te r

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D.3 The Pricing Model – StructureMedi-Cal Cost SharingFinancia l Mode lingDescription of PopulationW orksheet 4. Annual Out-of-Pocket Maximum




FPL

101% - 150% FPL

151% FPL & Over



FPL

101% - 150% FPL

151% FPL & Over

Pregnant W omen

Restricted Benefit

Income Eligible - Institutionalized - Dual

Income Eligible - Institutionalized - Non Dual

Income Eligible - Families $250 $500 $250 $500

Income Eligible - SSI-Dual $250 $500 $250 $500

Income Eligilbe - SSI-Non Dual $250 $500 $250 $500

Medically Indigent

Medically Needy - Institutionalized - Dual

Medically Needy - Institutionalized - Non Dual

Medically Needy - Families $250 $500 $250 $500

Medically Needy - SSI-Dual

Medically Needy - SSI-Non Dual $250 $500 $250 $500

Other $250 $500 $250 $500

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D.3 The Pricing Model - StructureMedi-Cal Cost SharingFinancial ModelingDescription of PopulationWorksheet 5. Monthly Premiums




FPL

101% - 150% FPL

151% FPL & Over



FPL

101% - 150% FPL

151% FPL & Over

Pregnant Women

Restricted Benefit

Income Eligible - Institutionalized - Dual

Income Eligible - Institutionalized - Non Dual

Income Eligible - Families $7 $15 $7 $15

Income Eligible - SSI-Dual $7 $15 $7 $15

Income Eligilbe - SSI-Non Dual $7 $15 $7 $15

Medically Indigent

Medically Needy - Institutionalized - Dual

Medically Needy - Institutionalized - Non Dual

Medically Needy - Families $7 $15 $7 $15

Medically Needy - SSI-Dual

Medically Needy - SSI-Non Dual $7 $15 $7 $15

Other $7 $15 $7 $15

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D.4 The Pricing Model – Default Assumptions

Effect of premium on enrollment

Assume reduction in enrollment due to premium requirement

Derived from experience of Oregon, Tennessee, Hawaii, Minnesota and other states

Calculated based on premiums as a % of income

• Take up rates drop dramatically as premium approaches 4%-5% of income

• Where premiums have been newly introduced or enforced, drop-off rates at low incomes are dramatic

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Default Assumptions - Percent Decrease in Enrollment

Premium Amount


Up to 100% FPL

101-150% FPL

Above 150% FPL

$5 25% 15% 7% 4%

$10 44% 25% 15% 8%

$15 60% 30% 25% 15%

$20 80% 44% 35% 25%

$50 98% 65% 60% 44%

Note: Premium sensitivity assumptions are developed based on results of demonstration projects in Washington, Minnesota and Hawaii and recent enforcement of premium requirements in the Oregon Health Plan

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Utilization savings due to copayments

Derived from PwC Actuarial Pricing Model

Based on 8 million commercial HMO lives

Varies based on assumed income sensitivity

• Income effect for copayment is assumed to be 50% of effect for premiums

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2.48.3*1.144.31.0*9.1101.2*4.2*0.6*22.2*0.5*5.550.7*2.5*0.3*13.3*0.3*3.3*30.2*0.8*0.1*4.4*0.1*1.1*10.00.00.00.00.00.00

Mental Health

DME**Drugs –Brand

Drugs –Generic

Inpatient –ER

Physi-cian

Copay $$

Default AssumptionsPercent Reduction in Utilization Due to Direct Effect of Copayment

Before Adjustment for Income Sensitivity

*Percentages for the low dollar copayments are interpolated based on results of an actuarial pricing model.

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Physician Services

Decrease in Utilization

Copay CommercialM-N or 50% FPL & Under

Above M-N to 100% FPL

101% - 150% FPL

151% FPL & Over

$0.00 0.0% 0.0% 0.0% 0.0% 0.0%

$5.00 5.5% 12.3% 10.4% 7.9% 6.1%

$10.00 9.1% 20.5% 17.3% 13.2% 10.2%

$15.00 13.6% 30.7% 25.9% 19.8% 15.3%

$20.00 16.4% 36.8% 31.1% 23.7% 18.4%

$25.00 18.2% 41.0% 34.6% 26.4% 20.5%

Sensitivity to Commercial 2.250 1.900 1.450 1.125Savings Threshold 50.0% 50.0% 50.0% 50.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

$0.00 $5.00 $10.00 $15.00 $20.00 $25.00

M-N or 50% FPL & Under Above M-N to 100% FPL101% - 150% FPL 151% FPL & Over

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D.5 The Pricing Model – Corollary Effects

Additional utilization savings due to corollary effects

Reduction in use of certain services due to copayments reduces use of other services

Utilization of corollary services may also increase

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D.5 The Pricing Model – Corollary Effects

Physician – SpecialistPhysician – Psych Outpatient – OtherPharmacy – BrandPharmacy – GenericPath/LabProfessional TherapiesTransportation

Physician – E&M

Corollary Effect: Indirect Impact on Services

Service With Copay

Default Assumptions - Corollary Effects (Sample)

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D.5 The Pricing Model – Corollary EffectsPlan A - Under 50% FPL

Service Category to which Copay is Applied

Phys ician Services -

E&M


EPSDT

Phys ician Services - Maternity

Phys ician Services - Specialis t


Psych

Inpatient Hospital -

Med / Surgical

Inpatient Hospital - Maternity

Inpatient Hospital -

PsychOutpatient -

ER

Phys ician Services - E&M 2.18% 0.00% 0.00% 25.00% 25.00% 0.00% 0.00% 0.00% 0.00%Phys ician Services - EPSDT 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Phys ician Services - Maternity 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Phys ician Services - Specialis t 0.00% 0.00% 0.00% 4.36% 0.00% 0.00% 0.00% 0.00% 0.00%Phys ician Services - Psych 0.00% 0.00% 0.00% 0.00% 4.36% 0.00% 0.00% 0.00% 0.00%Inpatient Hospital - Med / Surgical 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Inpatient Hospital - Maternity 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Inpatient Hospital - Ps ych 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Outpatient - ER 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Outpatient - Other 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Pharm acy - Brand 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Pharm acy - Generic 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Pharm acy - Fam ily Planning 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Pharm acy - OTC 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%DME / Supplies 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Path / Lab 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Transportation 25.00% 0.00% 0.00% 25.00% 25.00% 0.00% 0.00% 0.00% 0.00%Profess ional Therapies 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Other Prof - Non-Therapies 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%LTC-ICF/SNF/Rehab 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Other LTC 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Mental Health 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Vis ion 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Waiver 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Other Services 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Total Corollary Savings 0.00% 0.00% 0.00% 0.55% 0.55% 0.00% 0.00% 0.00% 0.00%

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D.6 The Pricing Model – Substitution Effects

Additional utilization and cost due to substitution

Increase in use of alternate services when utilization of primary service is constrained due to copayment or elimination of coverage

Substitution effects vary depending on complete benefit design

• Comprehensive copayment requirements suggest little substitution

• Targeted copayments, benefit elimination suggest significant substitution

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D.6 The Pricing Model – Substitution Effects

Inpatient Hospital – Med/Surg Pharmacy – BrandPharmacy – Generic

Outpatient – ER

Outpatient – ERPharmacy – BrandPharmacy – Generic

Physician – Psych

Outpatient – EROutpatient – OtherPharmacy – BrandPharmacy – Generic

Physician – SpecialistOutpatient -ERPhysician – Maternity

Inpatient Hospital – Med/Surg Outpatient –ER,

Physician – E&MSubstitution Effect: Indirect Impact on Services Service With Copay

Default Assumptions - Substitution Effects

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D.7 The Pricing Model – Add Back Effects

Add-back utilization and costs due to imposition of premium

Retroactive eligibility eliminates most potential savings in inpatient costs

No savings in LTC

Reduced savings in Corollary Services

No default assumption for change in morbidity, but can model

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D.8 The Pricing Model - Output

Results are presented as percentage change by component

Savings component

• Savings per Unit of Service

• Enrollment Savings

• Revenue from Premiums

• Utilization Savings Due to Copays

• Utilization Savings Due to Corollary Effects

• Utilization Costs Due to Substitution Effects

• Savings Due to Exclusion of Services

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Cost Component

• Utilization Cost Due to Substitutes

• Exceeding Out-of-Pocket Max

35


Percentage savings by Aid Category

Medi-Cal Cost SharingFinancial ModelingWorksheet 11a. Percentage Savings; Aid Category

Savings / Unit Service Enrollment Savings Premium Savings Utilization Savings;Due to Copays

Utilization Savings;Corollary Effect

Aid Category Children;Age Under 21

Adults;Age 21 & Over

Children;Age Under 21








Pregnant Women 0.00% 0.00% 0.57% 1.76% 0.05% 0.38% 0.00% 0.00% 0.00% 0.00%Restricted Benefit 0.00% 0.00% 0.00% 0.69% 3.61% 5.01% 0.00% 0.00% 0.00% 0.00%Income Eligible - Institutionalized - Dual 0.00% 0.00% 0.10% 2.46% 0.00% 0.34% 0.00% 0.00% 0.00% 0.00%Income Eligible - Institutionalized - Non Dual 0.00% 0.00% 0.44% 1.70% 0.03% 0.15% 0.00% 0.00% 0.00% 0.00%Income Eligible - Families 0.00% 0.00% 1.25% 3.58% 1.83% 0.00% 0.00% 0.00% 0.00% 0.00%Income Eligible - SSI-Dual 0.00% 0.00% 3.58% 7.22% 0.33% 2.24% 0.00% 0.00% 0.00% 0.00%Income Eligible - SSI-Non Dual 0.00% 0.00% 1.71% 4.43% 1.26% 1.19% 0.00% 0.00% 0.00% 0.00%Medically Indigent 0.00% 0.00% 1.03% 0.80% 2.96% 1.15% 0.00% 0.00% 0.00% 0.00%Medically Needy - Institutionalized - Dual 0.00% 0.00% 0.00% 0.00% 0.00% 0.03% 0.00% 0.00% 0.00% 0.00%Medically Needy - Institutionalized - Non Dual 0.00% 0.00% 0.00% 0.28% 0.02% 0.04% 0.00% 0.00% 0.00% 0.00%Medically Needy - Families 0.00% 0.00% 1.22% 2.84% 1.85% 2.18% 0.00% 0.00% 0.00% 0.00%Medically Needy - SSI-Dual 0.00% 0.00% 2.73% 4.68% 0.16% 2.14% 0.00% 0.00% 0.00% 0.00%Medically Needy - SSI-Non Dual 0.00% 0.00% 0.71% 1.35% 0.29% 0.49% 0.00% 0.00% 0.00% 0.00%Other 0.00% 0.00% 0.00% 3.60% 0.32% 0.84% 0.00% 0.00% 0.00% 0.00%Total 0.00% 0.00% 1.01% 3.20% 1.08% 1.07% 0.00% 0.00% 0.00% 0.00%

36


Percentage savings by service category

Also show detail cross tabulation by eligibility and service category

Calculation of dollars saved will be done by DHS to match most current budget estimate

37

E. Focused Literature Review

Appendix to Technical Description

Focused review of published literature

Review of natural experiments in expansion and subsidized programs

38


Addressed by pricing model

Require premium contributions for families with incomes above 100% of Federal Poverty Level and above SSI/SSP

• $4 per person per month for children

• $10 per person per month for adults

• $27 monthly maximum per family

• Share-of-Cost enrollees exempt from premium

39


Additional proposals, not addressed by pricing model

Expand managed care to additional eligible groups and geographies starting in 2007

Limit dental coverage for adults

40

G. Results of Analysis of Governor’s Proposal – Default Assumptions (15% Add-back for Rx) Results for FFS Population Only

Enrollment Savings Premium Savings Total Savings







Pregnant Women 0.41% 2.12% 0.07% 0.43% 0.48% 2.55%Restricted Benefit 0.17% 0.45% 2.25% 3.66% 2.42% 4.11%Income Eligible - Institutionalized - Dual 0.01% 0.34% 0.00% 0.05% 0.01% 0.39%Income Eligible - Institutionalized - Non Dual 0.00% 0.02% 0.00% 0.00% 0.00% 0.02%Income Eligible - Families 0.46% 2.21% 0.86% 0.00% 1.32% 2.21%Income Eligible - SSI-Dual 0.18% 0.55% 0.03% 0.17% 0.21% 0.72%Income Eligible - SSI-Non Dual 0.01% 0.02% 0.01% 0.01% 0.01% 0.03%Medically Indigent 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Medically Needy - Institutionalized - Dual 0.00% 0.02% 0.00% 0.01% 0.00% 0.03%Medically Needy - Institutionalized - Non Dual 0.01% 0.04% 0.00% 0.01% 0.02% 0.04%Medically Needy - Families 0.26% 0.90% 0.61% 0.71% 0.87% 1.62%Medically Needy - SSI-Dual 0.43% 1.10% 0.05% 0.53% 0.48% 1.63%Medically Needy - SSI-Non Dual 0.04% 0.12% 0.03% 0.05% 0.07% 0.17%Other 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Total 0.19% 0.39% 0.27% 0.21% 0.45% 0.61%

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Enrollment Savings Utilization Savings;Due to Copays Total Savings

Service Category Children;Age Under 21






Physician Services 0.66% 1.62% 0.00% 0.00% 0.66% 1.62%Inpatient 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Outpatient 0.42% 0.79% 0.00% 0.00% 0.42% 0.79%Pharmacy 0.20% 0.48% 0.00% 0.00% 0.20% 0.48%DME / Supplies 0.23% 0.62% 0.00% 0.00% 0.23% 0.62%Path / Lab 0.49% 1.15% 0.00% 0.00% 0.49% 1.15%Transportation 0.49% 0.60% 0.00% 0.00% 0.49% 0.60%Professional Therapies 0.23% 0.51% 0.00% 0.00% 0.23% 0.51%Other Professional (Non-Therapies) 0.34% 1.57% 0.00% 0.00% 0.34% 1.57%LTC-ICF/SNF/Rehab 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Other LTC 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Mental Health 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Vision 0.27% 0.57% 0.00% 0.00% 0.27% 0.57%Waiver 0.11% 0.58% 0.00% 0.00% 0.11% 0.58%Other Services 0.18% 0.76% 0.00% 0.00% 0.18% 0.76%Sub Total 0.19% 0.39% 0.00% 0.00% 0.19% 0.39%

Premium Savings 0.27% 0.21%

Exceeding Out-of-Pocket Max 0.00% 0.00%

Total Savings 0.45% 0.61%

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Enrollment Savings Premium Savings Total Savings







Pregnant Women 0.40% 2.02% 0.07% 0.43% 0.47% 2.45%Restricted Benefit 0.13% 0.31% 2.25% 3.66% 2.38% 3.98%Income Eligible - Institutionalized - Dual 0.00% 0.11% 0.00% 0.05% 0.00% 0.16%Income Eligible - Institutionalized - Non Dual 0.00% 0.01% 0.00% 0.00% 0.00% 0.01%Income Eligible - Families 0.30% 1.23% 0.86% 0.00% 1.16% 1.23%Income Eligible - SSI-Dual 0.07% 0.15% 0.03% 0.17% 0.09% 0.32%Income Eligible - SSI-Non Dual 0.00% 0.01% 0.01% 0.01% 0.01% 0.02%Medically Indigent 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Medically Needy - Institutionalized - Dual 0.00% 0.00% 0.00% 0.01% 0.00% 0.01%Medically Needy - Institutionalized - Non Dual 0.01% 0.02% 0.00% 0.01% 0.01% 0.03%Medically Needy - Families 0.21% 0.57% 0.61% 0.71% 0.82% 1.29%Medically Needy - SSI-Dual 0.14% 0.22% 0.05% 0.53% 0.19% 0.75%Medically Needy - SSI-Non Dual 0.03% 0.08% 0.03% 0.05% 0.06% 0.12%Other 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Total 0.16% 0.23% 0.27% 0.21% 0.43% 0.44%

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Enrollment Savings Utilization Savings;Due to Copays Total Savings

Service Category Children;Age Under 21






Physician Services 0.66% 1.62% 0.00% 0.00% 0.66% 1.62%Inpatient 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Outpatient 0.42% 0.79% 0.00% 0.00% 0.42% 0.79%Pharmacy 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%DME / Supplies 0.23% 0.62% 0.00% 0.00% 0.23% 0.62%Path / Lab 0.49% 1.15% 0.00% 0.00% 0.49% 1.15%Transportation 0.49% 0.60% 0.00% 0.00% 0.49% 0.60%Professional Therapies 0.23% 0.51% 0.00% 0.00% 0.23% 0.51%Other Professional (Non-Therapies) 0.34% 1.57% 0.00% 0.00% 0.34% 1.57%LTC-ICF/SNF/Rehab 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Other LTC 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Mental Health 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Vision 0.27% 0.57% 0.00% 0.00% 0.27% 0.57%Waiver 0.11% 0.58% 0.00% 0.00% 0.11% 0.58%Other Services 0.18% 0.76% 0.00% 0.00% 0.18% 0.76%Sub Total 0.16% 0.23% 0.00% 0.00% 0.16% 0.23%

Premium Savings 0.27% 0.21%

Exceeding Out-of-Pocket Max 0.00% 0.00%

Total Savings 0.43% 0.44%

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G. Extrapolating Results to the Total Medi-Cal Population

Model uses FFS 5% Sample

Managed care population is concentrated in Family eligibility categories

Population varies by income level and eligibility mix

Analysis requires re-weighting results to match full population

Changes in costs for managed care depend in part on changes in capitation rates

45

G. Estimated Income Distribution of the FFS Medi-Cal Population (weighted by member months of enrollment)

0%

10%

20%

30%

40%

50%

60%

70%

50% FPL andUnder

51% - 100% FPL 101% - 150% FPL 151% FPL andOver

Income as a % of FPL

% D

istr

ibut

ion

Children; Age Under 21 Adults; Age 21 & Over

46

G. Estimated Income Distribution of the Total Medi-Cal Population (weighted by member months of enrollment)

0%

10%

20%

30%

40%

50%

60%

70%

50% FPL andUnder

51% - 100% FPL 101% - 150% FPL 151% FPL andOver

Income as a % of FPL

% D

istr

ibut

ion

Children; Age Under 21 Adults; Age 21 & Over

47

G. Estimate for Total Medi-Cal PopulationRevised from January Presentation

Impacted by Premium Total Savings

Delivery System Children; Age Under 21

Adults; Age 21 & Over

Children; Age Under 21

Adults; Age 21 & Over

Fee for Service 10.3% 10.1% 0.48% 0.59%Managed Care 6.9% 6.5% 0.58% 0.86%

Total 8.0% 8.9% 0.54% 0.66%

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Key Contacts

PricewaterhouseCoopers LLP

Sandi Hunt 415-498-5365

Susan Maerki 415-498-5964

California HealthCare Foundation

Chris Perrone 510-238-1040

Your worlds Our people

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