Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
July 23--CHARLESTON -- Legislators received an optimistic actuarial forecast of state Medicaid expansion with some skepticism and worry -- skepticism that the numbers are too optimistic, and worry there may not be enough doctors to go around.
They heard the report during the opening day of the July interim meetings.
The report was commissioned by the state insurance commissioner and compiled by Maryland-based CCRC Actuaries. One of the report's authors was MIT economist Jonathan Gruber, who worked with the Obama administration and Congress to craft the Affordable Care Act (ACA).
That factor raised a red flag for Sen. Evan Jenkins, D-Cabell, whose day job is executive director of the West Virginia State medical Association.
"I'm a little concerned that we have a report ... the architect of it was closely aligned with the Obama administration," Jenkins said, and the state used the numbers to decide to expand Medicaid coverage.
Actuaries Dave Bond, a report co-author, and Chris Borcik presented the report. Bond responded to Jenkins' comment by saying, "Numbers are numbers," and he's sure Gruber tried to be objective.
The report projects how things will look in 2016. Without the ACA, there would be 246,000 uninsured West Virginians in 2016. (This is for the age group 18-64; those below 18 are eligible for CHIP, above 64 for Medicare).
With the ACA, but without Medicaid expansion, he said, there would be 121,000 uninsured. With Medicaid expansion, the number of uninsured falls to 76,000.
In Fiscal Year 2011, Medicaid served 415,000 people in West Virginia. Gov. Earl Ray Tomblin's office said in July the expansion will add another 91,500 to the rolls.
The cost projections show the state's Medicaid costs dipping slightly through 2016 as the federal government picks up the costs of expansion, then taking off. Under the expansion, the state's costs are projected to shrink from $189.5 million in FY 2014 to $184 million in FY 2016, then balloon to $288.5 million by FY 2023. At the same time, the federal contribution grows from $820.5 million in FY 2014 to $1.067 billion by FY 2023.
Jenkins also greeted the idea that costs could shrink for a couple years with skepticism. "How is that possible ?"
Borcik said it presumes the national and state economies recover.
The money to pay for the ACA and Medicaid expansion has to come from somewhere -- and Bond and Borcik showed how insurance premiums will increase for many people.
"The people under 400 percent [of federal poverty level, FPL] will be paying a whole lot less. The people over 400 percent will be paying a whole lot more," Borcik said.
For 2013, federal poverty level for a single person is $11,490 a year; for a family of four, it's $23,550. A full-time job at federal minimum wage, $7.25 per hour, brings in $13,920 a year before taxes.
A chart shows how premiums will change for individuals and families insured in a non-group plan. A 60-year-old man, for instance, earning more than 300 percent of FPL will see a premium decrease of 45.6 percent. But a 20-year-old man in the same income bracket will see a premium hike of 92 percent.
Jenkins observed, "The bottom line is, we have some pretty significant winners and some pretty significant losers."
Borcik answered, "Correct." The younger and healthier pick up the slack to subsidize the older and less healthy. "There is definitely an age subsidy within the law."
Jenkins raised an additional concern: Who is going to treat all the new Medicaid patients?
He said 50 of West Virginia's 55 counties are already considered underserved in terms of medical providers.
Bond said most West Virginia providers accept Medicaid patients, but Jenkins responded that many limit the numbers they take.
Delegate Denise Campbell, D-Randolph, picked up on Jenkins' concerns about access to care.
"I live in rural West Virginia and I know how long it takes to see a doct o r, " she said. She worked in a medical office and saw firsthand that they limit the number of Medicaid patients.
Compounding that problem, Medicaid reimburses providers at a lower rate than insurance companies do. She questioned how many rural providers and hospitals will be able to afford to stay in business by working for less money.
"I, in my heart of hearts, know we're going to have a provider issue here," she said. "I do hope we have enough providers and they are willing to take on" the work for less income.
Bond observed that actuarial reports are based on assumptions. "This world is changing, and we'll see what happens in West Virginia."
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