presentation, there are multiple economic aspects to talk about in terms of the impact on the state. how does it affect uncompensated care and affect private insurance premiums and trying to keep that under control and affordable for employers and for individuals. but also the public health situation. where are you in terms of obesity rates and diabetes and smoking and a number of these areas that are really important to the health of the state and the health of individuals, and so i think just indianaing -- needing to engage in the process in the state and looking at the benefits of coverage and it's a pretty clearcut casement doesn't answer the question is the federal government going to renege. you can get in basic issues that need to be worked through. i just want to throw out one example of a comment or a question that we got as we were implementing healthier had gone, and an individual wrote in and said i have a friend who just

sane up for the healthier michigan program, and i'm wondering if you cover cataract surgery. they said the reason i've been asking, i've been trying to get someone to pay for his cataract surgery, and the optometrist told hum if he had the surgery he have normal vision, and he has lost his job and has not been able to drive and this would enable this person to get back and about a contributing member of society and obviously improve their life. so i think as you hear those stories, there are compelling stories and our governor was really great about gets around the state and hearing the stories and it's not true of the entire population but there's a segment of the population that has not been getting services, and their life will improve and they will be able to be more contributing members of society, and that, i think, is part of the argument as well. >> i would just add, if you're

in a state that has already expanded above 138%, you're going to be bringing it down probably, and this doesn't offer you a new option. if you're in a state that has an effective management function, liar alan alluded to, your medicaid managed care is working well, then probably that is an expansion strategy that if you can navigate the politics, makes more sense. conversely, if you have a medicaid managed care system thought is not working well or, like us, you had not invested in much of a managed strategy over the last decades, this is a new and different approach in an individual exchange that, depending on how assertive the exchange is managed, offers a real opportunity to leap frog forward. i do think operationally it requires your medicaid director and where that authority lives and your insurance commissioner and wherever that authority is to work together in a way

they've never work together before. >> allen? >> i started by reminding you all that the vast majority of states that have done the expansion did it just through a state plan amendment. so you have to sort of -- this conversation only begins in a state where that's not a viable approach for political reasons. in my goings around the country i would say the defining message i hear from those who are looking for another way to do this, is a sense that medicaid and certainly its part of the broader politics of the affordable care act that medicaid is a one-size-fits-all program that the federal government, after the court opinion, the federal government was not open to states doing partial expansions, not open to limited benefits, and that it sort of a take it or leave it. and they want to shape this program in a way that fits with

their values and with their -- the structure of their market and with the resources they have, acknowledging that they'll pick up a share of the costs in a couple of years and that a lot of thus is just about a sense that the -- they want to construct something that fits them, not something that was written and defined in washington. now, converting that into a viable waiver proposal that meets the needs and the criteria i described at the very beginning, is quite hard, but fundamentally i think the conversation begins when a state says they want to do the expansion, they don't feel that the medicaid program, as it currently exists, is one they want to expand further, and they're willing to be creative, as these states have been in trying to figure out a structure that would be -- that would meet the federal government's

requirements and would enable them to feel good about it if it were ultimately approved. >> alan, maybe you don't want to do the expansion but you have a problem you must solve. that would be more our situation. >> yes, jeff. >> hi. jeff leavine, blogger, former cnn medical correspondentent. i want to pick up on since healthier michigan has come into being there's a greater demand for prescription drugs. so is there out there an unanticipated or unfulfillable demand for service that's going to put additional pressure on your systems, individual state systems, that are leaner than federal medicaid? >> so, i'm sorry. i'm not fully understanding the question. the concern is about high demand for prescription drugs? >> or anything. in other words, there's a lot of

consumer demand for service that you don't have the surge capacity to fulfill. >> there was -- the concern in our state was more focused on primary care capacity, and there were -- there was a survey done by an organization, the center for halve research -- research and health transformation or -- i think i'm screwing it up -- chart, affiliated with the university of michigan. they did a survey of primary care providers and found an overwhelmingly positive response to the ability to take on newly insured patients that would be healthier michigan patients, and there also is data we have that our health plans have in terms of the number of providers they have paneled and their ratios are very low in terms of primary care provider to number of beneficiaries, albeit that is absent the information how many other insured populations they're taking care of. but all of the data we saw was very encouraging in terms of the

capacity of the system to absorb the population. now, we're only five and a half weeks into this or something, but initially, we were paying bills on the second day, individuals were taking their card and going to the fqac because the primary care association was involved in helping them to enroll in healthier michigan, and there were referrals. but people were getting to physicians and to this point, we have not heard of big lines and -- there's a better way to say that. but at any rate, in terms of individuals having problems accessing primary care, big waiting times. i don't think we have enough information at this point to really know because most of the health plan enrollments won't be eek fifthtive until june for this initial population, and a lot of people in a short amount of tomb in a state like michigan, population of 10 million, and a medicaid

population of 1.8 something million traditionally, and now we're talking about already having 220,000 individuals who probably are going to hit 300,000 here in the next month or so, we hope, or month and a half, although that's being somewhat optimistic. in any case, a lot of people. i don't quite know how it would go, but all the information we have been able to collect and evaluate would sergeant that the capacity is there. i think there could be surge issues, but in terms of primary care and pharmacy, we think we're all right at this opinion. >> joe, if i could just add, we have similar concerns. one of the issues around our payment transformation effort is trying to move our primary care work force to really think more about team-based care so you're scaling the appropriate level of service to the appropriate need, and we think that's a benefit. anecdotally, it's early but our surge happened on the pharmacy

side where people had previously seen a provider, had a prescription but had not had a financial mechanism to pay for prescrimmages so in january it was people getting care they had previously been diagnosed with but were not successfully affecting the care of. we also potentially have an educational effort for folks who historically had only used the emergency room because they didn't have access to a primary care home, and so there's going to be some migration of folks' usual source of care as they better learn to utilize the healthcare system. >> so, just to -- the question on the benefit package, in the -- both the arkansas plan and also in michigan, and in arkansas, what dental benefits are included in the private option plan, and someone else asked about rap-around benefits. maybe you can explain the differences in the private

option benefit package and compare it to traditional medicaid. >> somebody might explain what a wrap-around benefit is. >> starting with a definition, since we don't have medicaid managed care i'll probably get wrong. essentially medicaid has guaranteedded benefits that if a plan doesn't offer the state is still obligated to provide an access point for in our private option those wrap-around benefits really include three major areas: nonemergency -- let me back up. we're buying the essential health benefit on the marketplace which our state used the second largest small group market, which did not include vision or dental as a covered benefit. the wrap-around benefit we have to make sure people have are nonemergency medical transportation, largely long-term care services, and

epst benefits until 20 years of age. so if we have an individual that is likely to need those benefits we're trying to retain them in the traditional medicaid program so we can give them those benefits or to distract them if they do make it into the commercial program when they need those benefits. we're trying to avoid as much as we can the coordination of benefits between a commercial plan and a state obligation that wraps around. now, sarah asked, and one of our transition to market issues, a couple of the plans actually put dental and vision benefits in that was approved, even though they weren't part of the essential benefit program and the state is paying for. this makes our price point be above what the federal agreement is. this is one of the marriage issues. we are moving to eliminate those supplemental benefits in year two, which will bring the price point back down into alignment. if i were king for a day i might

try to add them to all the benefits but the rules requires to us go with what the state chose as an essential health benefit. >> i think it's important to remember that the medicaid enabling legislation was passed in 1965, and it hasn't changed much. and so the list of mandatory versus optional benefits would surprise you, i think. surprises me when i look at it, and i've look at it for 40 years it hasn't changed so farmly is openingal to the no state would mike it optional and then the nonemergency transportation. and as for healthier michigan program, one change we made might have been as significant as any, we included dental in the managed care package, and for the traditional program it's been carved out and we pay low

fees and we have access challenges, and we got a mixed bag. we do completely different things for kids and we have a very good program for kids in the vast majority of the parts of the state called healthier kids dental, where we partner with delta dem. by rolling the dental benefit in we think we're going to require that there be adequate network and an organized system of care and if you have to pay act warily sound rates. so that was an important change and a good one. actuarial change. >> hi, i'm carolyn kramer. i'm from consumers union, and one of the questions that i have is you mentioned especially alan, that a lot of the questions we have right now is about different approaches to medicaid. we still don't know the answers so whether costs will good down, how access and utilization will be affected, a lot of those

things we just still don't know. i was wondering if you could talk a little bit about efforts underway to study those things and find out whether they're state government based or partner ships with universities. i know that things are sort of -- starting to come out more for example oregon meds okayed experiment. so efforts like that are underway, what is emerging and what can we expect in. >> i'm not going to give you a very satisfactory answer. part of every section 1115 waiver is an evaluation component. it's hard to summarize because there are dozens of them and they cover a lot of different ground. they're people in the audience here who i'm looking at who follow them more closely than i do, and then two people here who are living through it, terribly -- particularly around the questions they're waivers

raise, but there is an evaluation component to every section 1115 waiver, and i believe -- i can't remember if it was in this session or just a side conversation before -- given the high level of interest in this model, there is, i believe, a higher level of interest in the federal government in making sure that those evaluation plans will answer some of these key questions, because there are others -- the thinking has been that there are other states lining up interested in these approaches, and so we really do need to have the answers. i'm not sure how else to generalize about what the nature of those evaluations is. >> just to be explicit, the fir amendment to our waiver was our federally approved evaluation plan, and in an interim report is deat the end of the second

year and the final report at the end of the with a. there are two oar three other evaluations ongoing. i'm not sure what the timeline on those reports coming out but there's a far degree of interest on whether this is successful or not. >> just to go to the next question, are all of these alternative state medicaid programs appearing to have something in common, which is a move towards managed reduction sharing and ai would away from fear-for-service. is this critical for the medicaid expansion effort? >> well, we think it is. we moved away from fee-for-service in 1997, and gives you a predictable cost and also gives you some certainty in terms of provider networks and the organization and delivery of services, and where we're looking and we have a procurement for our managed care program in a year and a half --

we will be looking to try to affect the business -- financing relationships between the plans and the providers to try to move further away from fee-for-service rather than just having them become a fee-for-service system in their own way, but to try to make sure we are moving toward value purchasing all the way through our system. so, we're there. >> i would echo, prior to the affordable care act, we had started our arkansas payment improvement initiative, the payment transformation effort to move explicitly away from a fee-for-service reimbursement system, not to a cap tated jim but to a value-based outcomes system. maybe on the path to cappation but we may never get there. the private option was a voluntary effort with our two largest commercial carriers, medicare, medicaid, and self-insured companies. the private option legislation requires all carriers on the exchange now participate in the

payment improvement effort as an explicit statement we don't believe the fee-for-service reimbursement mechanism is the right approach to get the value we want out of the system or the outcomes consumers want from the system. >> the vast majority of low-income people without any sort of disability in medicaid are already in managed care arrangement. so, for most states that would consider this kind of private option, it's not so much a shift from one way of thinking to another, as they've already embraced the model of risk sharing and that as they consider an expansion, this is the path they would naturally take. >> let me just add, we are moving interest the last few minutes of our session here, and i would deeply appreciate your pulling out the blue evaluation forms and starting to fill them out as we go through these last few minutes. i'm particularly directing that

request to those of you on congressional staffs who are here, because senator rock fell are would -- rockefeller would say, not dismiss anyone else, they're our most important target and the most direct policy opinion leaders that we try to reach. so, i appreciate it if you would fill that in. you have 115 more green cards. >> here's another related -- what is the level of direction and oversaying from cms with regard to patients, providers, and health plans? and i guess i would just add to this question, the -- some approaches have healthy behavior incentives. michigan has a healthier behavior incentive, iowa does, too, and pennsylvania is also proposing a set of healthier behavior incentives actually tied to having premiums waived in subsequent years, and there

is -- if you read through the waiver applications and the approval from cms, there is a considerable amount of oversight and attention to those incentives and how they'll be evaluated. so i thought maybe we could discuss that oversaying within the context of those provisions. >> our experience has been fairly intense level of engagement and navigation with the cms officials. i wouldn't say there's that much direction but they clearly have concrete boundaries they want to protect in terms of the basic benefit offered through medicaid, the basic protections afforded to individuals, and the income gradient they recognize at lower levels, individuals cannot participate in the same way as someone that has more

fluid set of assets. having said that the bigger issue on many of these new additions are operationally, how are you going to make it work? that's where -- it's not necessarily oversight or intrusion. it's how you'll make the healthier behavior assessment actually have meaning and how you're going reach the individuals -- we're having a hard time with some of our individuals finding them to give them their insurance card. we have hundreds that are homeless. these are not small operational issues. so building the bells and whistles, at least in the early years we can have a dialogue and discussion about the goals and objectives of the program, but i think many of our issues are, let's make sure we can operationally back to steve's earliest thing. we have to be successful on implementation or else this is really an at-risk program, and the more challenges you lay on top of it in early years, the more likelihood you're going to have an implementation failure.

>> i can sort of pig guyback on the comments. it's fair to say that states almost always would like more freedom than what the federal government will afford us, and it's also true that the health plans we oversee want more freedom than we give them. it's sort of a natural law of some kind. but i think -- and i think at it fair to say that our experiences that we have a very ambitious agenda in terms of legislation, and it's about financial contributions and having skin in the game, about healthier behaviors, about accountability, about alignment of incentives, about a whole bunch of things trying to affect the public health that really moves the medicaid program to the next level, and i think there are certain places where the federal government does have -- they have values they are concerned

about in terms of protections and so forth, and so there's sometimes discussion on those but i think they have been quite flexible and open, frankly in terms of the program that we have in the legislation that we have in terms of getting from here to there on the implementation. >> i would just state what is maybe obvious but is, i think, often not referred to in a conversation like this. the private option is a medicaid expansion. it's not a different program. and that means that people who enroll in a plan through a private option are medicaid enrollees, and that means that all of the constraints and conditions that the state or the federal government would put around the terms of that are present, unless they're relieved due to a waiver. so, contracting with plans through an exchange is not qualitatively different than contracting with plans directly, which is what state medicaid

agencies do all the time. the issue is that the exchange plan relationship is still -- it's brand new and we don't know much about it. we don't know where it's going to settle out. so i do think -- one of the earlier questions was sort of, i talk about one kind of thing and the others were all operational. i do think much of this is operational. the boundaries are fairly clear. the question is operationally, can you make it work? and if you could make it work do you get the benefit you thought we were going to get. in terms of what the flexibility is for the state, it's not that different from any other section 1115 waiver. and the legal into it. to the enrollee is no different than the legal into itment to anyone else on meds okayed. ...

at some level i think it interstate exchange is an opportunity for reducing administrative costs. the barriers to doing so -- because one state requested analysis of doing a multistate exchange are well-known to those important in this field and they have a lot to do with the fact that insurance is regulated at the state-level and there there is a relationship there that would have to be unraveled and redesigned if you worked across

state lines. i don't think there's any reason to think that the plan issues change if you have an interstate exchanges about administrative infrastructure. >> one thing that is present are the multistate plans which is not quite interstate exchange but it is the potential to increase competition across the lands. i cannot imagine an interstate exchange. it's difficult for me to imagine an interstate exchange either helping facilitate or not being a real challenge to a state that's doing the third way expansion. i don't want the 36 counties in mississippi that i want to keep my 75 and try to get them is covered as possible because that is within the degree of illegal operational and policy flexibility that i have. >> okay.

this has been at least for me and enlightening conversation and keep in mind allen's presentation and what does it take to get to yes? we will be watching this as it develops over not just the next weeks but the next couple of years and we will see if people are moving and but the barriers are too trying to get them there. we are going to continue this conversation on friday and a slightly different way with our colleagues at the commonwealth fund by looking at and there were references to them today the federally qualified health centers, the fqhc's. we are going to take a look at how well prepared they are for new enrollment, new rules and new opportunities and we will see if we can't try to find another way around helping states get closer at least in the capacity part.

we want to thank our friends and colleagues, sara collins and her colleagues at the commonwealth fund for their work on this topic and in this briefing. thank you for both sitting very pretty dense and fact rich set of presentations and discussion and ask you to help me think the panel fr explaining most of those difficult situations in a very erudite and understandable way. toa couple of live events tell you about today. the senate judiciary committee considers several judicial nominations, including two to the 11th circuit court of appeals. that is on c-span3 at 930 a.m. eastern.

florida senator marco rubio speaks at the national press club about retirement security. you can see that at 1:00 p.m. eastern on c-span2. and in a few moments, today's headlines in your call to live on "washington journal." at 10:30 a.m. eastern, the senate homeland security and governmental affairs committee will examine plans for improving the dependent -- defense department financial management system so it is ready to be audited in 2017. later, president obama will award the medal of honor to former army sergeant kyle white and you can see that at 3:00 p.m. eastern. about 45 minutes, michael stratford, a reporter for looks at ther ed" rising cost of college education or what options are available for financially. -- 830 a.m. eastern, a

focus on the value of a college education. and national review writer discusses his article "drop the dropout," which examines society's push toward obtaining a college degree. ♪ good morning on this tuesday, may 13, 2014. a bipartisan bill to encourage energy efficiency in buildings expired in the senate on monday over disagreements on the keystone xl pipeline and the president's new climate change regulations. the senate voted 55 to 36 on a procedural motion, falling five votes short on what was required to bring the bill to a final vote. live coverage of the senate today on c-span two. this morning we will focus on the