Title text here

Weathering the Storm:The Impact of the Great RecessionOn Long Term Services and Supports

Preliminary findings of a 50 state survey presented to the National Home and

Community Based Service ConferenceSeptember 27, 2010

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Funded by AARP under direction of the Public Policy Institute

Built on 5 prior NASUAD state surveys

Presenting on preliminary findings

Final report to be released later this Fall

Research Methodology

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Primary Findings

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BUDGET CONTEXTStates Continue to Struggle through Tough Economy

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Recession Remains a Significant Factor

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10/4/2010 DRAFT: NOT FOR DISTRIBUTION 7

MI

AK

HI

CA

WI

WA

OR

ID

WY

UT

AZ

NM

NV

TX

MN

IA

MO

OK

NE

KS

SD

NDMT

AL

LA

FL

TN

IN OHIL

PA

WVVA

KY

NC

SC

GA

AR

MS

ME

NY

VTNH

MA

RI

CT

NJ

DE

MDCO

Percent Change in State Tax Revenue2007 (actual) to 2011 (projected)

Personal Income, Corporate, and Sales Taxes

Source: HMA analysis of data from National Association of State Budget Officers (NASBO), Spring Fiscal Survey of States, 2007-2011 reports. Notes: 2011 figures are estimates. For Illinois, this map uses projected revenue from NASBO’s 2006 report because 2007 data was not available.

Percent Change

-33.7% to -16%

-14.8% to -10.1%

-9.8% to -5.9%

-4.5% to -.8%

+.1% to 11.5%

AGING AND DISABILITY PROGRAMSImpact of the Recession on non-Medicaid funded LTSS

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Source: AARP, HMA, NASUAD Economic Survey, Preliminary Data, FY 10, FY11. FY09 data is from NASUA Economic Survey, December 2009.

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CO

Non-Medicaid State Expenditure Cuts FY 2010

DC

Notes: Washington, D.C. (not shown) had a cut of less than 5%.

Expenditure Cut

More than 25%

21-25%

16-20%

11-15%

6-10%

Less than 5%

None

Data not available

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End of ARRA Senior Nutrition FundingWill Have Significant Impact

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Despite an increase in the number of APS calls , only one state increased funding for APS while the rest either flat-lined or decreased state appropriations.

MEDICAIDImpact of the Recession on Medicaid funded LTSS

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Medicaid LTSS Policy Trends

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Extended ARRA Enhanced FMAP Phase-DownSome states budgeted for an extension of ARRA with a 6.5%

enhancement to their standard FMAP through June 30, 2011. Congress enacted a phase-down of the enhancement.

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Standard FMAP +6.4%

Standard FMAP +3.2%

Standard FMAP +1.2%

Standard FMAPJa

nuar

y 1,

201

1

Apr

il 1,

201

1

July

1, 2

011

U.S. Medicaid Enrollment Increases in Economic Downturns

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Aged and Disabled enrollment largely unaffected by economic fluctuations, but….

Enrollment increase in other groups

creates fiscal stress

may prompt states to curtail

LTSS

Enrollment increases likely contribute to LTSS policy decisions

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U.S. Medicaid Enrollment Increases in Economic Downturns: FY 1992- FY 2010

SOURCE: For 1998-2008: Medicaid Enrollment in 50 States: June 2008 Data Update, KCMU, August 2009. FY 2009 and FY 2010 based on KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, 2009. 1992-1997 data are from CMS for federal fiscal years. 1998-2010 are June-June state fiscal years.

Annual growth rate:

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Total Medicaid Spending Growth, 1996-2010

6.8%

10.4%

5.7%

3.4%

8.7%

12.7%

8.5%7.7%

6.4%

1.3%

7.9%

4.1%4.7%

3.8%

6.3%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Strong Economy, Welfare Reform,

Enrollment Drops, Managed Care

1995-1998

Economic Downturn, Enrollment & Cost Growth,

2000-2003

NOTE: Data for State Fiscal Years, for total Medicaid spending, including state, local and federal funds.

SOURCE: Historic Medicaid Growth Rates from KCMU Analysis of CMS Form 64 Data, FY 2008, 2009 and 2010 based on KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, 2009.

Low Enrollment Growth & Medicare Part D

2006-2007

Adopted

Economic Downturn 2008-2010

Adopted

8.9% Est.

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While Total Medicaid Funds Grew During the Recession, State Funding Experienced Negative Growth due to ARRA

FY 2000 - FY 2010

SOURCE: FY 2011 estimated by HMA. 2009 and 2010 from: Vernon Smith, Kathy Gifford, Eileen Ellis, Robin Rudowitz. CarynMarks and Molly O’Malley, “The Crunch Continues: Medicaid Spending, Coverage and Policy in the Midst of a Recession,” The Kaiser Commission on Medicaid and the Uninsured, September 2009. http://www.kff.org/medicaid/7985.cfm

ARRA Enhanced FMAP

(2009-2010)

Provider reimbursement was the major policy area in which states made changes

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States were generally more likely to enhance benefits and increase rates than to implement policy restrictions

Num

ber

of S

tate

s

ARRA and PPACA MOE RequirementsProtected Eligibility Standards

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States appear to be committed to holding steady or increasing HCBS benefits

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Slightly more states have or plan to increase HCBS benefits than have or plan to decrease benefits

Most Home and Community Based waivers experienced upward trend in number served

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Based on states reporting average daily census for at least two years in FYs 09, 10 & 11

Medicaid nursing facility census is expected to decrease or remain static in most states

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Few states reported cuts to State Plan Benefits

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PCS was most frequent service cut among states that trimmed

2010 provider rate changes - a mix of increases and decreases

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States were most likely to change NF rates

Num

ber

of S

tate

s

Fewer rate changes planned for 2011 – with the exception of NF

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Num

ber

of S

tate

s

Many states reported plans to develop or expand managed long term care initiatives

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AFFORDABLE CARE ACT Impact of the Recession on States Ability to Use HCBS Opportunities in

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States Likely to Pursue HCBS Options in Affordable Care Act

0 5 10 15 20 25 30

Medical/Health Home-CommunityHealth Teams

Medical/Health Home-SPA

Medical/Health Home-PlanningGrant

Money Follows the Person-NewGrantee

Money Follow the Person -ExistingGrantee

Community First Choice Option

State Balancing Incentive Program

HCB

S O

ptio

ns

Number of States

STATE OUTLOOKWhat to expect in 2011

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Frequently Noted Medicaid Priorities

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State Outlook

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Title text hereFor additional information:

Susan Reinhardwww.aarp.org/ppi

Kathy Giffordwww.healthmanagement.com

Martha Rohertywww.nasuad.org