FY 2014-2015 Medicaid
Budget Update
Presentation to JMOC Committee
Susan Ackerman
September 18, 2014
Today’s Topics
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Basis for estimates
Recap of FY 2014
Update on FY 2015
Look at national projections
What this means for Ohio in FY 2016-2017
The Budget Process:
GRF Disbursement Estimates
• Legislation authorizes annual appropriations by
line item
• Agencies develop monthly disbursement
estimates by GRF line item. Estimates include:
– Planned encumbrances & lapses
– Spending against prior year encumbrances
– May include appropriation changes such as transfers and Controlling
Board actions
• These estimates become the basis for the
monthly financial reports
– OBM: http://obm.ohio.gov/Budget/monthlyfinancial/
– LSC: http://www.lsc.state.oh.us/fiscal/bfn/default.htm
Medicaid Spending Over Time
$25
Spending in Billions
$20
$15
Total Spending All
Funds
GRF State Share
$10
$5
Source: Legislative Service Commission
2015 est
2013
2011
2009
2007
2005
2003
2001
1999
$0
Medicaid Budget:
All Spending on Medicaid Matters
• Medicaid budget includes GRF and non-GRF
funds and spending across multiple agencies
• Most non-GRF Medicaid funds can be used
interchangeably with GRF funds
• GRF spending has implications for the entire
General Revenue Fund
End of Year Analysis:
FY 2014 Medicaid Spending ($ in millions)
Projection
$14,211
$232
$14,442
Actual
$13,375
$196
$13,571
Variance
$(836)
$(36)
$(872)
Non-GRF Services
Non-GRF
Administration
Non-GRF Total
$6,312
$836
$6,709
$580
$396
$(256)
$7,148
$7,289
$141
Grand Total
$21,590
$20,859
$(731)
$20,523
$1,067
$20,083
$776
$(440)
$(291)
GRF Services
GRF Administration
GRF Total
Total Services
Total Administration
Source: ODM All Agency Budget Variance Report for June 2014
Variance Highlights (All Funds)
Areas under estimate
Areas over estimate
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• Group VIII - $512.0M
• ACA Physician Rate Increase $238.2M
• Nursing Facilities - $140.1M
• Behavioral Health - $55.5M
My Care - $500.6M
Health Homes - $211.7M
Managed Care/CFC - $108.7M
Inpatient Hospital - $108.4M
Agency Administration - $291.5M
All Other - $166.2M
Key Factors in Variances:
• Timing of implementation of new programs
• Lower caseloads than estimated
Actual Medicaid Enrollment
Trails the Estimate
3,200,000
Total Caseload
3,000,000
2,800,000
2,600,000
As Passed w/ Exp
Actual
2,400,000
2,200,000
Jul-14
Jun-14
May-14
Apr-14
Mar-14
Feb-14
Jan-14
Dec-13
Nov-13
Oct-13
Sep-13
Aug-13
Jul-13
2,000,000
Sources: ODM Forecast Book, Budget As Passed; Mercer Expansion Forecast; ODM Monthly Caseload
Report
Updated Assumptions for FY 2015
• Caseload forecast adjusted downward
– “Woodwork” enrollment, especially for dual eligibles
• Medicaid GRF disbursements reduced by
$845.6M
– GRF federal revenues reduced by $559.0M
• CB Increases will be incorporated in estimates
– Group VIII ($1,999.5M)
– Ohio Benefits contract ($108.7M)
Trends in National Health Expenditures:
Distribution & Spending by Payer
$6,000
$5,159B
$5,000
31%
$ in Billions
$4,000
$3,000
$2,000
Federal
$2,793B
26%
18%
7%
$1,000
$0
18%
7%
State/Local
Other
Households
26%
28%
21%
19%
2013
2023
Source: CMS Office of the Actuary, National Health Expenditure Projections 2013-2023 (July 2014)
Businesses
National Estimates: 2013 Medicaid Report
Enrollment by Category
Annual Per Capita Spending by Category
35
$30,000
$25,000
Annual Per Capita Cost
25
20
15
10
$15,000
$10,000
Aged
Children
Newly Eligible Adults
Disabled
Adults
Aged
Children
Newly Eligible
Disabled
Adults
Data Source: CMS Office of the Actuary, 2013 Actuarial Report on the Financial Outlook for Medicaid (April 2014)
2022
2020
2018
2016
2014
2012
2010
2008
2006
2004
2002
$-
2000
0
$20,000
$5,000
5
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Number enrolled (in millions)
30
What Does This Mean for FY 16-17
• Healthcare costs and caseloads will continue
to grow
• Still early in implementation of new initiatives
• The success of transformative initiatives to
improve value and health outcomes is
essential for long term program stability