Situation Report | September 14, 2020
The state’s latest Medicaid Global Cap Report finds that overall spending in State Fiscal Year (SFY) 2019-20 was $6 million below the $22.4 billion target.
Spending in Medicaid managed care categories was $723 million above projections with the following factors highlighted by DOH:
- Mainstream Managed Care spending was $213 million, or 2.2 percent, above estimates through March. Overspending for the program would have been much greater if the state did not implement various rate reductions, DOH says.
- Long Term Managed Care was $510 million above estimates through March primarily due to continued enrollment growth in the partial capitation program. Member month enrollment for SFY 2020 grew by over 13 percent. Overspending for the program would have been much greater if the state did not implement various rate reductions, DOH reports.
DOH’s report stated that being below the SFY 2019-20 cap was achieved through reductions in spending growth that followed a review of price and utilization trends, SFY 2019 results, and other factors.
The state Division of Budget (DOB) and DOH has estimated that state-share Medicaid spending would exceed the global cap indexed growth amount by $4 billion in SFY 2020 (including the SFY 2019 deferral of $1.7 billion) and $3.1 billion in SFY 2021.
DOH pointed to the following spending pressures: reimbursement to providers for the cost of the increase in the minimum wage; the phase-out of enhanced federal funding; increased enrollment and costs in managed long term care; and payments to financially distressed hospitals.
DOH says the $4 billion imbalance in the Medicaid Global Cap was offset through: deferral of the March payment to Medicaid Managed Care Organizations ($1 billion); a SFY 2020 savings plan ($599 million), which included a one-percent across-the-board reduction in rates paid to providers and health plans; and reductions in discretionary payments.
Remaining costs of $1.7 billion were shifted to the general fund and a shift of non-Medicaid health care costs under the Child Health Plus program to the Public Health budget.
Medicaid total enrollment reached 6,072,778 enrollees at the end of March 2020. This reflects a net decrease of 70,885 enrollees since March 2019.
While the DOH report shows a net enrollment decrease over a one-year period ending March 2020, separate reporting from the Empire Center for Public Policy found a more recent spike attributable to the pandemic. Its report, covering a more recent period, found that enrollment as of May 2020 was “up 261,000 or 4.3 percent since February — the fastest rise since early 2014, when the Affordable Care Act took full effect.”