medicaid’s evolving role in health coverage alice burton, director academyhealth
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Medicaid’s Evolving Role in Health Coverage
Alice Burton, DirectorAcademyHealth
National Governor’s Association Health Policy Advisors MeetingSeptember 9, 2004
Presentation outline
Pressure for reform and redesign
Medicaid’s changing role in health coverage
-New groups covered by Medicaid
-Private sector partnerships
-Benefits and cost-sharing
Total State Medicaid Spending as a Percentage of Total State Spending,
FY93 - FY03
Source: National Association of State Budget Officers
1818.5
1919.5
2020.5
2121.5
2222.5
2323.5
2424.5
1993 1996 1999 2002
Only a few ways to control budget
Enrollment – eligibility cuts, premiums, changes to enrollment process
Utilization – benefit cuts, limits on services, co-payments, shifting to lower cost services
Provider reimbursement – limited ability to cut
71.8 71.9 70.9 68.6
13.7 13.9 14.5 15.2 15.8
14.5 14.2 14.6 15.2 15.6
69.6
0%
20%
40%
60%
80%
100%
1999 2000 2001 2002 2003
Private Public Uninsured
Medicaid cushions recent growth in the uninsured
Health Insurance Coverage, individuals under 65Source: CPS March 2003 Supplements 1997-2002
Regardless of perspective – likely challenge
Growing enrollment in Medicaid, growing cost
Growing uninsured despite expansions in public coverage
New options for Medicaid coverage
SCHIP (1997) 1115 waivers and HIFA (2001) Breast and Cervical Cancer (2000)
– 50 states (including DC) Ticket to Work – Working individuals with
disabilities (2001 – Medicaid expansion)– 32 states, some states with no income limit
States with expanded coverage for parents through
Medicaid
0 – 49% FPL
50 - 99% FPL
100 – 199% FPL
200%+ FPL
no new enrollment or
capped enrollment
OR
WA
CA
NV
UT
ID
MTND
SD
WY
NE
CO
AZ
NM
TXLA
MN
IA
MOKS
OKAR
WI
MI
ILIN
OH
KY
FL
TN
VA
NC
SC
MS AL GA
PA
NY
ME
VTNH
MA
MDDE
NJ
RICT
AK
HI
WV*
*
* Program not implemented
States that cover childless adults through Medicaid
no coverage
under 100% FPL
100 – 199% FPL
200% FPL and greater
no new enrollment or
capped enrollment
OR
WA
CA
NV
UT
ID
MTND
SD
WY
NE
CO
AZ
NM
TXLA
MN
IA
MOKS
OKAR
WI
MI
ILIN
OH
KY
FL
TN
VA
NC
SC
MS AL GA
PA
NY
ME
VTNH
MA
MDDE
NJ
RICT
AK
HI
WV
* Program not implemented
*
Illinois covers parents Sept. 02 HIFA – Expanded coverage to parents of
Medicaid and SCHIP (phases in expansion)– KidCare Rebate: Premium assistance available to
children 133% - 185% FPL - Informed consumer choice model
July 03 expansion: – Children from 185% to 200% FPL; – Parents of Medicaid and SCHIP children with incomes
from 49% to 90% (Goal is to raise to 185%) FY 2005 expansion to cover an additional 56,000
working adults to 133% FPL
Arizona covers parents & childless adults December 2001 HIFA waiver allowed state to use
unspent SCHIP funds to cover the following expansion groups in phases: – Phase 1: childless adults to 100% FPL– Phase 2: parents of Medicaid/SCHIP children
between 100% and 200% FPL Studied feasibility of ESI pilot program – determined
not feasible Strengthening Arizona Health Care Group to address
crowd-out
Private sector partnerships
Sustained interest by states because programs meet a broad set of policy and political goals
Currently operating premium assistance models pay the employee’s contribution for qualifying employer sponsored insurance when it is cost-effective – 14 states, just over 50,000 enrolled out of over 50
million enrolled in Medicaid and SCHIP Newer models create a new product, targeting
working uninsured– Target either employer or employees
What problem are you trying to solve?
Different problem requires different solution…
1. Problem: Coverage offered by employer but not taken up by worker
Solution: Subsidize employee premium
-or-
2. Problem: Employer doesn’t offer coverage at all
Solution: Create affordable product targeting employers and workers
A small portion of workers decline employer sponsored insurance
50
13
37
93
3
4
0%10%20%30%40%50%60%70%80%90%
100%
Low-IncomeWorkers
High-IncomeWorkers
Covered by Ownor Spouse'sEmployers
Declined offerfrom Own orSpouse'sEmployer
Not offeredthrough Own orSpouse'sEmployer
SOURCE: Kaiser Comissionon Medicaid and Uninsured, Key Facts, December 2003
Making new private insurance options more affordable: Arkansas HIFA proposal
January 2003 HIFA proposal Employers that previously (>12 mo) were not
offering coverage may insure workers through new program– 100% worker participation requirement– Safety-net benefits insurance package
For workers with incomes below 200% FPL, participating employer fees paid to the state qualify as federal match
Making new private insurance options more affordable: New Mexico’s HIFA
Goal is to help small employers provide insurance to low-income workers
Expand coverage to individuals under 200% FPL – Must have been uninsured >6 mo
New product ($300/month) – Employer share $75, may not have provided insurance
>12 mo– Employee share $25, individuals without participating
employer pay employee and employer share– Medicaid share $200 ($36 state funds)
Coverage similar to basic commercial plan
New approaches to benefits
Fewer benefits for higher income groups Primary care programs Pharmacy Plus – Rx only benefits
One state’s example of redesigning
Medicaid benefits for new populations
Some limits on services offered Service limits based on medical necessity
Inpatient & Outpatient ServicesPhysician & Specialty ServicesPrescription DrugsOT, PT, STDME & Supplies (prosthetics & orthotics)
Lab & X-rayEmergent & Urgent CareHome HealthMental Health & Substance Abuse
$100,000 Annual Maximum
Expansion Benefits
No Annual Maximum
Inpatient Services & Outpatient Services Physician & Specialty ServicesPrescription DrugsOT, PT, ST, DME & Supplies (prosthetics & orthotics)Lab & X-rayEmergent & Urgent CareHome HealthMental Health & Substance Abuse (limits for adults)
Medicaid & SCHIP Benefits
Increased Benefits
Increased Benefits
PodiatryDentalOptometry & EyeglassesLong Term Care - ICFMR/Nursing Home/Pre-PACEPersonal Care & Home Nursing for ChildrenEPSDT & Early Intervention & NutritionTargeted Case ManagementHospiceTransportation & Lodging
Utah’s Primary Care Network 1115 waiver expands coverage to parents & childless
adults to 150% FPL Some reductions in benefits Medicaid
– Reductions in speech, dental, PT, transportation and psych services
Primary care benefit package for expanded population:– Office visits - DME– Immunizations - Basic dental– Emergency/Urgent care - Hearing and vision screening (no glasses)– Lab/X-ray - Rx (4 per month)
Donated care - $10 million hospital care, outpatient specialty care, health education services, referral to Rx assistance programs
New approaches to premiums
Greater use of premium and “buy-in” to public programs
26 states collect premiums under SCHIP
New approaches to premiums
New experience with collecting premiums Few states have studied impact
– Higher income group (>150%) – approx 20% don’t take up coverage when asked to pay premium
• About ½ end up with other insurance
– For very low income groups – impact of premium is much greater
• About ¾ remain uninsured
Administrative process has a big impact on enrollment
State Coverage Initiatives (SCI)
An Initiative of The Robert Wood Johnson Foundation
Direct technical assistance to states– Onsite technical assistance– Meetings for state officials– Web site: http://statecoverage.net– Publications
Grant funding
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