Capitol Correspondence - 04.24.17

Avalere Report Highlights Impact of Per Capita Caps for Duals

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In a new report published on April 20, Avalere Health, a respected healthcare consulting firm, models the impact that proposals limiting Medicaid funding growth using per capita caps would have on dual eligibles. Dual eligibles are Medicaid beneficiaries who are also eligible for Medicare benefits. The report finds that imposing per capita caps could lead to a $44 billion spending cut for duals over the next 10 years. 
President of Avalere Health Dan Mendelson said, “These Medicaid reforms could inadvertently encourage states to reduce benefits for low income elderly beneficiaries. If not carefully designed, reduction in Medicaid coverage for duals—particularly in the provision of post-acute care—could reduce quality and increase Medicare spending through higher rates of hospitalization and more intensive use of services in these vulnerable populations.”
The report looks at two different inflation rates that have been included in recent proposals – Consumer Price Index for medical expenses (CPI-M), and CPI-M+1. Under CPI-M, the analysis finds that funding would be reduced by $13 billion for all aged Medicaid beneficiaries, and $91 billion for all disabled Medicaid beneficiaries over the next decade. Under a CPI-M+1 formula, the reduced funding would be smaller, at $8 billion over the same period. 
ANCOR is continuing to work with Avalere Health to determine the impact of various federal proposals that affect Medicaid funding for people with intellectual and developmental disabilities. 
Slides summarizing the report’s findings are available here.