Texas Medicaid Basics

Barry S. Lachman, MD, MPHOctober, 2012

What is Medicaid?

Jointly funded state-federal program providing health coverage to low-income and disabled individuals.

Federal agency: Centers for Medicare and Medicaid Services (CMS)

State agency: Health and Human Services Commission (HHSC)

Medicaid is entitlement program

Federal law requires coverage for certain populations and services.

States are allowed to cover additional populations.

Eligibility is based on income, age and certain eligibility categories

Guaranteed coverage for eligible services to eligible individuals.

Medicaid EligibilityMedicaid serves:

Low-income families

Children

Related caretakers of dependent children

Pregnant women

Elderly

Individuals with disabilities

Eligibility criteria:

Residency in Texas

U.S. citizen or qualified aliens legally admitted for permanent residency

Income and resource limits

Functional and medical criteria for long-term services and support

Most child applicants must be under age of 19

Medicaid Caseload

Services for the aged, blind, and disabled are the largest share of program costs

50% of all enrollees are in FFS & PCCM models thatwere not designed to manage costs.

66% are children

currently serves about 3.3 million people

Federal Poverty Level

FPLis the definition of poverty used by the federal government as the reference point to determine Medicaid eligibility

is the income level below which a person is officially considered to lack adequate financial resources and to be living in poverty

U. S. Dept. Of HHS 2011 Poverty Guidelines

Federal Poverty Level Based on Family Income

(based on U.S. Dept. of HHS poverty guidelines for 2011)

Family Size Income

1 $10,890

2 $14,710

3 $18,530

4 $22,350

5 $26,170

6 $29,990

FPL Income ExamplesIndividual

100%FPL

133%FPL

185%FPL

200%FPL

$10,890

$14,484

$20,147

Family of 3

$18,530

$24,645

$34,281$37,060

Texas FPL Eligibility

*Annual income based on a family of 3 except for SSI and nursing home clients which are based on individual income

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0%

Eligibility by Income

Texas Medicaid Caseload Growth Sept. 1978 – Sept. 2020 Source: HHSC

Texas Medicaid Beneficiaries & Expenditures SFY 2010 (Source: HHSC)

Non-DisabledChildren

66%

Non-DisabledChildren

32%

Other Adults 9%

Other Adults 10%

Aged, Blind and Disabled

25%

Aged, Blind and Disabled

58%

Caseload Expenditures

Texas Medicaid Expenditures SFY 2009

Medicaid BenefitsMandatory Benefits

The services states are federally required to offer as part of state program

Optional Benefits

Federally approved additional services that states can offer under Medicaid program

Services Covered

Covers basic health care servicesphysician services inpatient, outpatient care pharmacy, lab and x-ray long term care services for the aged and disabled

How is Medicaid Funded?Medicaid is funded by both state and federal

governments.

Federal share is based on Federal Medical Assistance Percentage (FMAP)

FMAP is based on state’s per capita personal income compared to the U. S. average.

Texas receives FMAP of approximately 60% meaning 60/40 split for most client services.

Supplemental Federal Funding

Upper Payment Limit (UPL) – payments made to hospitals and physicians to make up the difference between what Medicaid pays for services and what Medicare would have paid for the same care.

Disproporionate Share Hospital Program (DSH) – special payments made to hospitals that serve a disproportionately large number of Medicaid and low-income patients.

Health Reform: Myth and Truth

Barry S. Lachman, MD, MPH

Why is Medicaid ImportantSafety Net for the underserved and vulnerable

Key cog in assuring universal coverage for those under 133% of poverty

Medicaid Myths and Reality

Myth: Federal Program – actually much State control

Benefits are very generous – true, more than any commercial insurance or Medicare. However, covers those with disabilities who are more expensive.

Fiscally unsustainable – State budgets are challenged; however, we are already paying for these services. 40% of health expenditures are wasted (IOM, 2012)

Medicaid is a failure – fales. It has narrowed gap on health disparities. Multiple good studies show improved health outcomes in those served

Could just move them into commercial insurance – false. Has been tried. It does not work.

The State of the Healthcare System

Costs out of control

Over 40 million uninsured

Poor quality – Overall Texas is at or near the bottom on almost all measures

Ration based on income

Employer based model in rapid decline

Insurance unaffordable for many

Very inefficient system

Multiple problems not just access

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The Uninsured Over 40 million uninsured (US Census Bureau, New York Times,

Austin American Statesman, Lubbock Times

Texas highest uninsured rate in US (same)

Texas highest number of uninsured children (KFF, US Census Bureau) Over 1 million uninsured children in Texas (Kids Count Survey)

Dallas has second most uninsured of any city – 1.4 million (TMA)

Over 90% of uninsured in Dallas are US citizens (CPPP)

1 in 5 women in Dallas uninsured (Dallas Women’s Foundation)

Most are low income (Census Bureau, CPPP, Dallas Women’s Foundation, KFF)

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Texas Health Statistics 47th in % of insured children (KFF)

47th in % of insured adults (KFF)

2nd in number of uninsured adults (KFF)

2nd in Total Uninsured (KFF)

1st in number of uninsured children (KFF)

Public Mental Health expenditures (48th)

Infectious Disease – 46th

Lack of Health Insurance – 50th

Early Prenatal Care – 50th

Affordable or NotTexas cost cover 80% of uninsured for 1%

increase in State Health Care Spending CPPP

CMS (DMN 6/14/2012) – cover 30 million (75%) for 0.1% increase per year in costsDoes not include any savings from billDoes not look at NPV of investment – what is the

cost of not doing it over time

Supreme Court RulingUpholds all challenged parts of ACA except

Medicaid Expansion to 133% of poverty level (it is optional)

ACA HighlightsNear universal coverage through Medicaid,

Exchanges, Medicare, private health insurance

Eliminates preexisting condition for coverage and continuation

Eliminates ending coverage for honest errors on application

Extends dependent coverage to age 27

Clinical trials coverage

Small employer tax credits

More ACA HighlightsGrants available to states: (1) to set up an Office of Health

Insurance Consumer Assistance (2) to establish health insurance exchanges. TX applied and will get both!

Begins new $11 billion investment in Community Health Centers.

New funding for training primary care docs, nurses, other professionals.

No copays on preventive servicesMinimum and essential benefitsMedicaid payments to doctors must be equal to Medicare

Limits excessive profits by insurers

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2010: Closing the Rx “Doughnut Hole”: Shrinks Doughnut Hole by $250 in 2010 (rebate), 50% discount on brand-name drugs in the remaining gap; closes doughnut hole entirely by 2020

Jan. 2011: New preventive benefits: adds comprehensive annual check-up plus other prevention benefits, with no out-of-pocket costs.

Adds 12 more years to Medicare Trust Fund Solvency: Not by cutting current Medicare benefits or doctor fees, but slowing growth in Medicare spending from 2010 to 2019.

New Access to Community-Based Services and Supports: Medicare today does not cover community-based services to help seniors remain in their homes. A new voluntary insurance program (CLASS) will provide community-based assistance services and support. Starts in 2012 or 2013; 5 years to qualify for benefits.

The “cuts” are largely limits on insurer profits in ACA whereas cuts in the “Ryan Budget” are real cuts to benefits and payments

.

Making Medicare Stronger

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>$88,400 for a family of four;>400% of FPL

Job-based coverage, or Full-cost coverage in the exchange

$66,200-$88,400; 300-400% of FPL

Job-based coverage, or Subsidized exchange coverage: premiums capped

at 9.5% of income

$44,100-$66,200;200-300% of FPL

Job-based coverage, or Subsidized exchange coverage: premiums capped

at 6.3 – 9.5% of income

$29,300-$44,100;133-200% of FPL CHIP

• Job-based coverage, or• Subsidized exchange coverage:

premiums capped at 3% - 6.3% of income

<$29,300 for a family of four; < 133% FPL

Medicaid Medicaid

Children Adults (non-disabled adults,

not eligible for Medicare)

Fam

ily

Inco

me

Health Reform Coverage Options by Income

Family income based on 2009 federal poverty income levels for a family of four

Medicaid and Faith

Tikkun Olam(Healing the World)

Jewish theologic concept dating to early Rabbinic Period

Maimonides expanded to society as a whole

Luria expounded the concept most clearly as part of the mystic tradition (Kabbalah)

Jewish tradition celebrates and honors our obligations to the community

Maimonides – Hierarchy of charitable acts

Seventh Noachite commandment links Jewish tradition to social justice

Christian and MoslemJesus ministry to the poor

Islam – Zakah – clearly linked to social justice