Medicaid: The Basics

1
Medicaid The Basics

• Diane Rowland, Sc.D.
• Executive Director
• Kaiser Commission on Medicaid and the Uninsured
• and
• Executive Vice President Kaiser Family
  Foundation
• June 2005KaiserEDU.org Tutorial

2
Medicaids Origin

• Enacted in 1965 as companion legislation to
  Medicare (Title XIX)
• Established an entitlement
• Provided federal matching grants to states to
  finance care
• Focused on the welfare population
• Single parents with dependent children
• Aged, blind, disabled
• Included mandatory services and gave states
  options for broader coverage

3
Medicaid Today

• Medicaid provides health and long-term care
  coverage for over 52 million low-income people
• Comprehensive, low-cost health coverage for 39
  million people in low-income families
• Acute and long-term care coverage for over 13
  million elderly and persons with disabilities,
  including over 6 million Medicare beneficiaries
• Guarantees entitlement to individuals and federal
  financing to states
• Federal and state expenditures of 300
  billionwith federal government funding 57
• Pays for nearly 1 in 5 health care dollars and 1
  in 2 nursing home dollars

4
Medicaids Role for Selected Populations
Percent with Medicaid Coverage
Poor
Near Poor
Families
All Children
Low-Income Children
Low-Income Adults
Births (Pregnant Women)
Aged Disabled
Medicare Beneficiaries
People with Severe Disabilities
People Living with HIV/AIDS
Nursing Home Residents
Note Poor is defined as living below the
federal poverty level - 14,680 for a family of
three in 2003. SOURCE KCMU, KFF, and Urban
Institute estimates Birth data NGA, MCH Update.
5
Minimum Medicaid Eligibility Levels, 2004
Income eligibility levels as a percent of the
Federal Poverty Level
Note The federal poverty level was 9,310 for a
single person and 15,670 for a family of three
in 2004. SOURCE Cohen Ross and Cox, 2004 and
KCMU, Medicaid Resource Book, 2002.
6
Medicaid Benefits
Mandatory Items and Services
Optional Items and Services

• Physician services
• Laboratory and x-ray services
• Inpatient hospital services
• Outpatient hospital services
• Early and periodic screening, diagnostic, and
  treatment (EPSDT) services for individuals under
  21
• Family planning
• Rural and federally-qualified health center
  (FQHC) services
• Nurse midwife services
• Nursing facility (NF) services for individuals 21
  or over

• Prescription drugs
• Clinic services
• Dental services, dentures
• Physical therapy and rehab services
• Prosthetic devices, eyeglasses
• Primary care case management
• Intermediate care facilities for the mentally
  retarded (ICF/MR) services
• Inpatient psychiatric care for individuals under
  21
• Home health care services
• Personal care services

7
Medicaid Expenditures by Service, 2003
DSH Payments 5.4
Inpatient Hospital 13.6
Home Health and Personal Care 13.0
Physician/ Lab/ X-ray 3.7
Mental Health 1.8
ICF/MR 4.4
Long-Term Care 36.0
Outpatient/Clinic 6.7
Acute Care 58.2
Drugs 10.0
Nursing Facilities 16.8
Other Acute 6.3
Payments to MCOs 15.6
Payments to Medicare 2.3
Total 266.1 billion
SOURCE Urban Institute estimates based on data
from CMS (Form 64), prepared for KCMU.
8
Medicaid Enrollees and Expendituresby Enrollment
Group, 2003
Elderly 9
Elderly 26
Disabled 16
Adults 27
Disabled 43
Children 48
Adults 12
Children 19
Total 52.4 million
Total 252 billion
Note Total expenditures on benefits excludes DSH
payments. SOURCE KCMU estimates based on CBO
and OMB data, 2004.
9
Medicaid Payments Per Enrolleeby Acute and
Long-Term Care, 2003
12,800
12,300
Long-Term Care
Acute Care
1,900
1,700
SOURCE KCMU estimates based on CBO and Urban
Institute data, 2004.
10
Federal Medical Assistance Percentages (FMAP),
FY 2005
71 percent (9 states)
61 to lt71 percent (15 states DC)
51 to lt61 percent (13 states)
50 percent (13 states)
SOURCE Federal Register, December 3, 2003
11
Medicaids Role for Children and Adults, 2003
Poor
(lt100 Poverty)
Children
Near-Poor
(100-199 Poverty)
Poor
(lt100 Poverty)
Parents
Near-Poor
(100-199 Poverty)
Adults without children
Poor
(lt100 Poverty)
Near-Poor
(100-199 Poverty)
Note Medicaid/Other Public includes SCHIP and
other state programs, Medicare, and
military-related coverage. The federal poverty
level was 14,680 for a family of three in 2003.
SOURCE KCMU and Urban Institute analysis of
March 2004 Current Population Survey.


12
Medicaids Impact on Access to Health Care
Percent Reporting
No Regular Source of Care
Did Not Receive Needed Care
No Pap Test in Past Two Years
Adults
Women
Children
SOURCES The 1997 Kaiser/Commonwealth National
Survey of Health Insurance Kaiser Womens Health
Survey, 2004 Dubay and Kenney, Health Affairs,
2001.
13
Medicaid Enrollees are Poorer and Sicker Than The
Low-Income Privately Insured Population
Percent of Enrolled Adults
Low-Income and Privately Insured
Medicaid
Poor
Health Conditions that limit work
Fair or Poor Health
SOURCE Coughlin et. al, 2004 based on a 2002
NSAF analysis for KCMU.
14
Average Annual Medicaid Spending Growth Compared
to Growth in Private Health Spending, 2000-2003
Monthly Premiums For Employer- Sponsored
Insurance2
Medicaid Acute Care Spending Per Enrollee
Health Care Spending Per Person with Private
Coverage1
SOURCES 1 Strunk and Ginsburg, 2004. 2
Kaiser/HRET Survey, 2003.
15
Medicaid Status of Medicare Beneficiaries, FFY
2002
Total Duals 7.2 million
Total Medicare Beneficiaries 40 million
SOURCE KCMU estimates based on CMS data and
Urban Institute analysis of data from MSIS.
16
Medicaid Eligibility Benefits for Medicare
Beneficiaries, 2005
Mandatory Populations
Pathway Income Eligibility Asset LimitIndividual/Couple Medicaid Benefits Medicare Premiums Cost-sharing
SSI Cash Assistance lt 74 of poverty(SSI income eligibility) 2,0003,000 X X
Qualified Medicare Beneficiary (QMB) lt 100 of poverty 4,0006,000 X
Specified Low-Income Beneficiary (SLMB) 100-120 of poverty 4,0006,000 Premium only
17
Medicaid Eligibility Benefits for Medicare
Beneficiaries, 2005(contd)
Optional Populations
Pathway Income Eligibility Asset LimitIndividual/ Couple Medicaid Benefits Medicare Premiums Cost-sharing
Medically Needy Individuals who spend income down to a specified level 2,0003,000 X X
Poverty Level lt 100 of poverty 2,0003,000 X X
Special Income Rule for Nursing Home Residents Institutionalized individuals with income lt 300 of the SSI level 2,0003,000 X X
HCBS Waivers Must be eligible for institutional care Must be eligible for institutional care X X
Medicaid benefits may be more limited than for
SSI.
18
Dual Enrollees are Poorer and Sicker ThanOther
Medicare Beneficiaries
Community-residing individuals only. SOURCE
KCMU estimates based on analysis of MCBS Cost
Use 2000.
19
Spending on Dual Eligibles as a Share of Medicaid
Spending on Benefits, FY2002
Non-Prescription (82.7 Billion)
36
Spending on Dual Eligibles 42
Spending on Other Groups (136.7 Billion)
59
6
Prescription Drugs
(13.4 Billion)
Total Spending on Benefits 232.8 Billion
SOURCE Urban Institute estimates prepared for
KCMU based on an analysis of 2000 MSIS data
applied to CMS-64 FY2002 data.
20
National Spending on Nursing Home and Home Health
Care, 2003
Nursing Home Care
Home Health Care
Other 6
Other 5
Private Insurance 8
Medicaid 25
Private Insurance 21
Medicaid 46
Out-of-Pocket 28
Out-of-Pocket 17
Medicare 32
Medicare 12
Total 40 billion
Total 110.8 billion
SOURCE CMS, National Health Accounts, 2005.
21
Growth in Medicaid Long-Term Care Expenditures,
1991-2003
84
82
75
In Billions
Home community-based care
33
31
Institutional
29
52
21
34
14
67
69
71
79
86
SOURCE Burwell et al. 2004, HCFA-64 data.
22
Average Annual Growth in Medicaid Expenditures,
1991-2003
SOURCE Urban Institute, 2005 data from HCFA
Financial Management Reports, 2004
(HCFA-64/CMS-64).
23
Growing Pressure on Government Spending
State General Fund Spending
Federal Outlays
Total 499 Billion
Total 2.3 Trillion
SOURCE CBO, Baseline Budget Outlook, January
2005 National Association of State Budget
Officers, 2003 State Expenditure Report, 2004.
24
Whats at Stake in Medicaid Reform
Health Insurance Coverage 25 million children and
14 million adults in low-income families 6
million persons with disabilities
Assistance to Medicare Beneficiaries 7 million
aged and disabled 18 of Medicare beneficiaries

Long-Term Care Assistance 1 million nursing home
residents 43 of long-term care services
MEDICAID
State Capacity for Health Coverage 43 of federal
funds to states
Support for Health Care System 17 of national
health spending