Medicaid

1
Medicaid

• Health of the Public

2
Medicaids Role

• Coverage of the Low-Income Population
• Covers 1 in 10 nonelderly Americans
• Covers 1 in 5 children
• Pays for nearly 40 of births
• Supplements Medicare for 6 million beneficiaries
• Access to care
• Improves access to physician services and
  preventive care
• Facilitates access to prenatal care for
  low-income women
• Long-Term Care Safety Net
• Pays for nearly half of all national nursing home
  spending
• Established nationwide nursing home quality
  standards
• Pioneered community-based long-term care
  innovations

3
Medicaid Characteristics

• Costs shared between federal and state
  governments
• Federal pays at least 50 percent (60 for Kansas)
• States administer under broad federal guidelines
• Overall serves about 40 million people16.5
  percent of all U.S. personal health spending

4
History of Medicaid

• Before Medicaid
• The poor were cared for by a combination of
  charity and public clinics and hospitals
• Separate care systems for "wealthy" and poor
• Charity
• Private -- "in pro bono
• Religious
• Public
• Charity hospital
• Cook County hospital
• Bellevue hospital

5
History of Medicaid

• 1965 -- Lyndon Johnson
• Medicare legislation
• Medicaid attached as an amendment
• Poor, elderly, disabled, and single parent
  families
• Three layer cake
• Part a
• Part b
• Medicaid

6
Three key features

• Joint federal-state venture
• Administration at state level
• state-level variations
• federal mandates
• Linkage to welfare program

7
Welfare

• TAF (TAnF Temporary Assistance for Needy
  Families)
• GA (General Assistance)

8
Temporary Assistance for Families

• Personal Responsibility and Work Opportunity
  Reconciliation Act of 1996
• Replaces AFDC
• Work requirements
• phase-in
• exemptions with children lt 1
• 5 year time limit
• may exempt 20

9
General Assistance (GA)

• Disabled adult not eligible for TAF or SSI
• Designed to provide support while SSI is pending

10
Welfare - the Mother Lode

• Typical Mother - 1 child
• government assistance food stamps
• total value 399/month
• Rent utilities
• cost 436/month
• Food expenses exceed food stamp benefit
• off the books income is necessary for survival

Based on welfare study in Chicago (see TCF
web-site)
11
Health Insurance Coverageby Poverty Level, 1999
Figure 7
Other
Employer
Medicaid
Uninsured
Other includes individually-purchased private
insurance and other public coverage. Note The
federal poverty level for a family of three in
1999 was 13,290. SOURCE Urban Institute and
Kaiser Commission on Medicaid and the Uninsured,
analysis of March 2000 Current Population Survey,
2000.
12
Medicaids Role for Selected Populations, 1999
Figure 2
Note Non-elderly population. Federal Poverty
Level is 13,880 for a family of three in
1999. SOURCE Urban Institute estimates based on
the March 2000 Current Population Survey.
13
Who does Medicaid serve?

• 20.7 million children
• 8.6 million adults in families
• 4.1 million elderly
• 7.0 million blind disabled

14
How does a person qualify for Medicaid?

• Categorical eligibility
• Disabled
• Child
• Pregnant woman
• Medicare
• Parents
• Income

15
Medicaid Minimum Income Eligibility Standards,
2001
Figure 10
Percent of Federal Poverty Level
Federal Minimum
National AFDC Average
0
Pregnant Women/ Infants
Nonelderly Adults without Children
Preschool 1 to 5
School-age 6 to 18
Adults with Children
Note 18-year-olds phased in by September 2002.
Based on AFDC average for 1996, the standard
used for Section 1931 eligibility. The Federal
Poverty Level is 14,630 for a family of three
for 2001.
16
Medicaid Enrollees and Expendituresby Enrollment
Group, 1998
Figure 3
Elderly 10.1
Blind Disabled 17.3
Adults 21.4
Children 51.2
Total 40.4 million people
Total 169.3 billion
Total expenditures exclude administrative
expenses. Disproportionate Share Hospital
payments. Source Urban Institute estimates,
based on HCFA-2082 and HCFA-64 Reports.
17
Medicaid Expenditures by Service, 1998
Figure 4
DSH Payments 8.8
Inpatient 14.4
Personal Care 3.5
Home Health 6.9
Physician 4.1
Mental Health 1.8
Outpatient/Clinic 7.1
ICF/MR 5.9
Drugs 6.9
Other Acute 6.2
Nursing Facilities 20.3
Payments to Medicare 2.6
Payments to MCOs 11.6
Total 169.3 billion
SOURCE Urban Institute estimates, based on
HCFA-2082 and HCFA-64 Reports.
18
Medicaid Expenditures Per Enrolleeby Acute and
Long-Term Care, 1998
Figure 5
11,235
9,558
1,892
1,225
Note Expenditures do not include DSH,
adjustments, or administrative costs. SOURCE
Urban Institute estimates based on HCFA-2082 and
HCFA-64 Reports.
19
Recent changes in Medicaid

• Runaway costs
• Managed-care
• Uninsured kids
• CHIPs - HealthWave

20
Medicaid Spending Growth by EligibilityGroup,
1990-1998
Figure 6
169.3
Dollars (in billions)
161.2
155.4
151.9
137.8
128.0
115.4
89.2
70.6
Disproportionate Share Hospital payments. Note
Total expenditures excludes administrative
expenses. SOURCE Urban Institute estimates based
on HCFA-2082 and HCFA-64 Reports.
21
Medicaid Spending Growth by Service,1990-1998
Figure 25
Dollars (in billions)
176.3
167.6
161.0
157.4
142.7
132.3
119.2
92.7
73.7
Includes Medicare and HMO payments. SOURCE
Urban Institute estimates based on HCFA-2082 and
HCFA-64 Reports.
22
Average Annual Growth of Medicaid Spending for
Selected Services, 1995-1998
Figure 26
Total Medicaid Spending
Prescribed Drugs
Other Acute Care
Long-Term Care
Includes both fee-for-service expenditures and
estimated drug spending by managed care
organizations. SOURCE Urban Institute estimates
based on HCFA-2082 and HCFA-64 reports.
23
Federal Budget Outlays, FY 2000
Figure 29
Total 1.8 trillion
SOURCE CBO, January 2001.
24
Medicaid Spending as a Percentage of State
General Fund Expenditures, FY 1999
Figure 31
Higher Education 13
Elementary Secondary Education 35
Public Assistance 3
Medicaid 15
Corrections 7
All Other 27
Transportation lt1
Total 420 Billion
SOURCE National Association of State Budget
Officers, 1999 State Expenditure Report, June
2000.
25
Medicaid Managed-care

• Primary motivation -- cut runaway cost
  escalation
• Problems
• Children and non-elderly adults - only 23 of
• Traditional managed care targets
• Little or no managed care experience in reducing
  costs to nursing home recipients or other
  high-utilizers

26
Growth in the Share of Medicaid Beneficiaries
Enrolled in Managed Care, 1991-1999
Figure 15
Percent enrolled in managed care
Millions of People
2.7
3.6
4.8
7.8
9.8
13.3
15.3
16.6
17.8
Note Includes full-risk and PCCM
arrangements. SOURCE HCFA, 2000.
27
Medicaid Managed Care Enrollment
28
Eleven Million Children are Uninsured

• 0ver 4 million of these children are eligible for
  Medicaid but are not enrolled
• Medicaid only requires services be offered --
  states are not required to ensure participation
  of all eligible
• 1998 - state of Washington withdrew major
  initiative to enroll children citing economic
  risks if too many enrolled

29
CHIPs

• Be administered individually by each state CHIPs
• Provides coverage for children
• Actively seeks enrollment eligible children
  including Hispanics, homeless, migrants
• Encourages states to
• Drop assets assessment -- focus eligibility on
  income

30
CHIP will (Cont)

• Keep children eligible for full twelve months
• Minimize "in and out" coverage as this makes
  preventive care problematic
• Keep costs low
• No or minimal premiums
• Simplify enrollment -- allow Head Start, WIC and
  other workers to enroll

31
Figure 11
Medicaid/CHIP Income Eligibility Levels for
Children, 2000
NH
VT
WA
ME
ND
MT
MN
MA
OR
NY
ID
WI
SD
RI
MI
CT
WY
PA
NJ
IA
NE
OH
IN
DE
NV
IL
WV
UT
VA
MD
CO
CA
MO
KS
KY
NC
DC
TN
OK
SC
AR
AZ
NM
GA
AL
MS
TX
LA
AK
FL
HI
Medicaid/CHIP Income Levels
lt 150 FPL (8 states)
151 - 199 FPL (7 states)
gt 200 FPL (36 states)
NOTE The Federal Poverty Level (FPL) is 14,150
for a family of three in 2000. SOURCE Center
on Budget and Policy Priorities, 2000.
32
Figure 12
Strategies for Simplifying Medicaid and CHIP
Eligibility and Enrollment for Children
Number of States Reporting
NOTE State counts include only states that have
adopted the enrollment simplification strategy
for both their Medicaid for children and CHIP
programs. SOURCE Center on Budget and Policy
Priorities for the Kaiser Commission on Medicaid
and the Uninsured, 2000.
33
Medicaid -- Successes

• Success
• Provides insurance for 35-40 million Americans
• Moved poor people into mainstream health-care
• Provided long-term care for large numbers of
  elderly
• Improved quality of long-term care
• Serves as major safety net especially for children

34
Medicaid -- Failures

• Failures
• Unable to control escalating costs
• Unable to provide equivalent care state - to -
  state
• 42 of Americans in poverty remain uninsured
• 25 of doctors dont participate
• another (1/3 limit s)
• People cycle in out of medical coverage
• Only 20 percent of children still enrolled after
  28 months (11 million children uninsured)
• after losing Medicaid 26 percent reenroll
• 39 percent remain uninsured

35
Medicaid Prescription Drug Spending, 1998
Figure 27
Expenditures per Enrollee
Expenditures by Eligibility Group
All
Children
Adults
Blind Disabled
Aged
Total 14.5 billion
8.2 of total Medicaid spending on
services. SOURCE Urban Institute Estimates, 2000.
36
Long-Term Care Spending, 1998
Figure 28
Medicaid LTC Spending, by Type of Service
Total National LTC Expenditures, by Source of
Funds
Total 65 billion
Total 117 billion
Source Urban Institute estimates based on
HCFA-2082 and HCFA-64 reports HCFA, National
Health Accounts, 2000.
37
Figure 30
Federal Medical Assistance Percentage (FMAP), FY
2001
50 percent (9 states)
51 to lt60 percent (15 states)
60 to lt70 percent (15 states)
70 percent (11 states DC)
SOURCE Federal Register, February 23, 2000.
38
Medicaid as a Share of Total Federal Grants to
States, 1987 and 1999
Figure 32
Cash Assistance 10
Public Assistance 4.2
Federal Medicaid 26
Federal Medicaid 43.6
Education 13.8
Education 18
Transportation 9.2
Transportation 14
All other 30.1
All other 32
Total 222 billion 1999
Total 108 billion 1987
SOURCE National Association of State Budget
Officers, 1999 State Expenditure Report, June
2000.
39
Medicaid Eligibility Milestones, 1965-1997
Figure 9
Millions of Medicaid Beneficiaries
(35 Million Beneficiaries)
AFDC Repealed (1996)
1965 1970 1975 1980 1985
1990 1995 2000
SOURCE Health Care Financing Administration,
1998 Rosenbaum S., 1993 Rowland, D., 1992.
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