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Medicaid's Origin. Enacted in 1965 as companion legislation to Medicare (Title XIX)Established an entitlement Provided federal matching grants to states to finance careFocused on the welfare population: Single parents with dependent childrenAged, blind, disabledIncluded mandatory services
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1. Medicaid: The Basics Diane Rowland, Sc.D.
Executive Director
Kaiser Commission on Medicaid and the Uninsured
and
Executive Vice President Kaiser Family Foundation
May 2005 KaiserEDU.org Tutorial
2. Medicaid’s 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 1) What is the purpose of the Medicaid program?
The Medicaid program– by design– fills in gaps in the private market, rather than crowding out other source of insurance. It takes care of the most expensive populations and those that are most in need of services– the very poor, the disabled, and the elderly.
Most low-income families cannot get private coverage: either they work for an employer who doesn’t offer it or they cannot afford their share of the premiums and cost-sharing. Half of low-income workers don’t have employer coverage, largely because they are not offered it. Many cannot afford the (on average) $2000 per year share of premium.
Similarly, disabled and elderly Medicaid beneficiaries have few other options for insurance coverage. Most private sources do not cover the key benefits that the disabled need—such as community-based care, personal care, comprehensive DME– or would be prohibitively expensive if they did. Medicare supplemental policies are costly and often do not cover the services poor seniors need (like Rx); with HMO pull-outs, low-income seniors have even fewer options. 1) What is the purpose of the Medicaid program?
The Medicaid program– by design– fills in gaps in the private market, rather than crowding out other source of insurance. It takes care of the most expensive populations and those that are most in need of services– the very poor, the disabled, and the elderly.
Most low-income families cannot get private coverage: either they work for an employer who doesn’t offer it or they cannot afford their share of the premiums and cost-sharing. Half of low-income workers don’t have employer coverage, largely because they are not offered it. Many cannot afford the (on average) $2000 per year share of premium.
Similarly, disabled and elderly Medicaid beneficiaries have few other options for insurance coverage. Most private sources do not cover the key benefits that the disabled need—such as community-based care, personal care, comprehensive DME– or would be prohibitively expensive if they did. Medicare supplemental policies are costly and often do not cover the services poor seniors need (like Rx); with HMO pull-outs, low-income seniors have even fewer options.
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 billion—with federal government funding 57%
Pays for nearly 1 in 5 health care dollars and 1 in 2 nursing home dollars
1) What is the purpose of the Medicaid program?
The Medicaid program– by design– fills in gaps in the private market, rather than crowding out other source of insurance. It takes care of the most expensive populations and those that are most in need of services– the very poor, the disabled, and the elderly.
Most low-income families cannot get private coverage: either they work for an employer who doesn’t offer it or they cannot afford their share of the premiums and cost-sharing. Half of low-income workers don’t have employer coverage, largely because they are not offered it. Many cannot afford the (on average) $2000 per year share of premium.
Similarly, disabled and elderly Medicaid beneficiaries have few other options for insurance coverage. Most private sources do not cover the key benefits that the disabled need—such as community-based care, personal care, comprehensive DME– or would be prohibitively expensive if they did. Medicare supplemental policies are costly and often do not cover the services poor seniors need (like Rx); with HMO pull-outs, low-income seniors have even fewer options. 1) What is the purpose of the Medicaid program?
The Medicaid program– by design– fills in gaps in the private market, rather than crowding out other source of insurance. It takes care of the most expensive populations and those that are most in need of services– the very poor, the disabled, and the elderly.
Most low-income families cannot get private coverage: either they work for an employer who doesn’t offer it or they cannot afford their share of the premiums and cost-sharing. Half of low-income workers don’t have employer coverage, largely because they are not offered it. Many cannot afford the (on average) $2000 per year share of premium.
Similarly, disabled and elderly Medicaid beneficiaries have few other options for insurance coverage. Most private sources do not cover the key benefits that the disabled need—such as community-based care, personal care, comprehensive DME– or would be prohibitively expensive if they did. Medicare supplemental policies are costly and often do not cover the services poor seniors need (like Rx); with HMO pull-outs, low-income seniors have even fewer options.
4. Medicaid’s Role for Selected Populations
5. Minimum Medicaid Eligibility Levels, 2004
7. Medicaid Expenditures by Service, 2003
8. Medicaid Enrollees and Expenditures by Enrollment Group, 2003
9. Medicaid Payments Per Enrollee by Acute and Long-Term Care, 2003 Disabled and elderly cost more because they use more acute care services and, more importantly, because they rely on costly LTC services (which are generally not covered by other payers). Disabled and elderly cost more because they use more acute care services and, more importantly, because they rely on costly LTC services (which are generally not covered by other payers).
10. 3) What should be done?
Last main point is that before we just look at costs rising and immediately start planning ways to cut them, we should first ponder the question of how society takes care of or finances the public’s responsibility to care for the nation’s poor and disabled. Do we:
change the federal/state responsibility for different services/populations?
enhance the Medicare benefits package?
increase the FMAP?
do nothing?
States that are thinking about cutting Medicaid spending should also remember that the program is an important source of revenue– 43% of all federal grants to states are through Medicaid financing. While many states saw a decrease in their FMAP in the past year, the majority of states still have very favorable matching rates. However, the federal government could assume greater financial responsibility for Medicaid. 3) What should be done?
Last main point is that before we just look at costs rising and immediately start planning ways to cut them, we should first ponder the question of how society takes care of or finances the public’s responsibility to care for the nation’s poor and disabled. Do we:
change the federal/state responsibility for different services/populations?
enhance the Medicare benefits package?
increase the FMAP?
do nothing?
States that are thinking about cutting Medicaid spending should also remember that the program is an important source of revenue– 43% of all federal grants to states are through Medicaid financing. While many states saw a decrease in their FMAP in the past year, the majority of states still have very favorable matching rates. However, the federal government could assume greater financial responsibility for Medicaid.
11. Medicaid’s Role for Children and Adults, 2003
12. Medicaid’s Impact on Access to Health Care
13. Medicaid Enrollees are Poorer and Sicker Than The Low-Income Privately Insured Population Trends
For the second year in a row, the reason more Americans lost coverage was due to decreased employer-sponsored health insurance. The share of the nonelderly covered by Medicaid and other state programs rose again, but was not enough to offset the decline in the proportion with job-based health coverage. The share of the nonelderly population who were uninsured grew in 2002 by 0.8 percentage points -- a larger increase than the year before (with 0.4 percentage point growth).
Trends
For the second year in a row, the reason more Americans lost coverage was due to decreased employer-sponsored health insurance. The share of the nonelderly covered by Medicaid and other state programs rose again, but was not enough to offset the decline in the proportion with job-based health coverage. The share of the nonelderly population who were uninsured grew in 2002 by 0.8 percentage points -- a larger increase than the year before (with 0.4 percentage point growth).
14. Average Annual Medicaid Spending Growth Compared to Growth in Private Health Spending, 2000-2003
15. Medicaid Status of Medicare Beneficiaries, FFY 2002
17. Medicaid Eligibility & Benefits for Medicare Beneficiaries, 2005 (cont’d)
18. Dual Enrollees are Poorer and Sicker Than Other Medicare Beneficiaries
19. Spending on Dual Eligibles as a Share of Medicaid Spending on Benefits, FY2002
20. National Spending on Nursing Home and Home Health Care, 2003
21. Growth in Medicaid Long-Term Care Expenditures, 1991-2003
22. Average Annual Growth in Medicaid Expenditures, 1991-2003
23. Growing Pressure on Government Spending
24. What’s at Stake in Medicaid Reform
