the role of medicaid in a restructured health care system cindy mann executive director center for...
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The Role of Medicaid in a Restructured Health Care
System
Cindy MannExecutive Director
Center for Children and FamiliesGeorgetown University Health Policy Institute
November 4, 2005
Medicaid’s Current Role in Illinois
Individual5%
Medicaid 20%
11%
Employer64%
Uninsured
Individual5%
18%
Medicaid 6%
Employer68%
UninsuredMedicare
2%
Sources of Coverage
All Children0-18
Non-Elderly Adults18-64
Source: Data based on pooled 2003 and 2004 Current Population Survey (CPS) data.
Slide 1
Medicaid’s Current Role
• Pays for more than one out of three (37%) births in the state
• Provides a broad set of benefits for elderly and disabled people with significant health care needs
• Single largest source of funding for long- term care
Slide 2
Elderly and People with Disabilities Account for 70% of
Medicaid Expenditures in Illinois
Adults11%
Elderly & Disabled
70%
Children 19%
Total Illinois Medicaid Expenditures in 2002 = $9.2 billion
Slide 3
Source: Georgetown Center for Children and Families analysisbased on FY 2002 CMS MSIS data.
Medicaid’s Current Role
• Vital support for safety net providers
• Supplements financing for other systems– Special education and early intervention
services for children– Child welfare system
• Largest source of federal funds to Illinois
Slide 4
Transportation1.6%
Education*22.5%
Public Assistance
0.9%
Medicaid56.7%
All Other*18.3%
Total = $8 billion
($4.53 billion)
Federal Medicaid Payments as a Share of Total Federal Funds to Illinois, FY 2003
*”Education” includes elementary, secondary and higher education. *“All Other” varies by state. It includes federal funds for the State Children’s Health Insurance Program and may include a range of other federal funds such as economic development, housing, parks and recreation. Source: Georgetown Center for Children and Families analysis based on National Association of State Budget Officers (NASBO), 2003 State Expenditure Report, Fall 2004.
Slide 5
Under Reform, How Will
• Coverage be financed? • Coverage for people with disabilities and
other high medical costs be financed?• Affordability for low- and moderate-income
people be achieved?• Costs be contained? • Quality be assured?• Portability, continuity of coverage & a
more seamless system be achieved?
Slide 6
Key Issues To be Addressed
Medicaid offers
Adequate financing Open-ended federal financing
Automatically adjusts with costs, caseload
Coverage for people with disabilities and other high cost cases
Comprehensive benefits - services beyond those typically available through commercial plans, no lifetime cap, etc.
Coverage for people with limited incomes
Comprehensive coverage with limited beneficiary costs
Cost containment Broad state discretion to set provider payment rates, establish disease management & incentives to encourage efficient and effective care management
Slide 7
Key Issues To be Addressed
Medicaid offers
Assure quality Broad state discretion/authority to establish, and monitor quality standards
Portability, continuity of coverage, a more seamless system
Coverage not tied to job status; broad control over delivery system, administration, payment rates
- Can merge Medicaid coverage and financing with other systems under a restructured system
- Can design the system to work in tandem with employer-based coverage while also filling in the gaps that will arise in an employer-based system
Slide 8
Slide 9
MassHealth
(One application, one eligibility determination
process)
Medicaid financing for some groups of children and adults
SCHIP financing for a smaller group of
children
Premium Assistance component
Slide 10
Dirigo applications
sent to Dirigo by employer
Dirigo Agencydetermines employee discount
Contracts with private insurer to provide
coverage to all Dirigo
participants
All participants receive the
same card and see the same
providers*
Medicaid Can Be Integrated into Broader Reform: Dirigo
100% discount for Medicaid eligible employees and
families
Sliding income discount for employees/families
between Medicaidand 300% FPL
*Note: Medicaid-eligible Dirigo enrollees eligible for some additional “wrap-around” services.
Medicaid Coverage/Financing Limitation
• No financial participation for childless adults– Eleven states and the District of Columbia
have waivers allowing some Medicaid financing for this group
– Budget neutrality constraints
Slide11
Other Medicaid Considerations
• Limits on premiums and cost sharing that can be charged
• Provider payment rates often lower than commercial insurance
• Relatively low administrative costs
Slide 12
Medicaid vs. Private Insurance Costs,Per Capita
$3,145
$719
$4,410
$795
Adults Children
Medicaid Private Insurance
Source: Hadley and Holohan, Inquiry, 2004
Slide 13
Slide 14
Medicaid Federal Reforms that Could Help States Meet Their Coverage Goals
• Automatic “FMAP” adjuster– To require federal share of costs to rise during
economic downturns
• Coverage permitted without regard to “categories”– Option to cover childless adults
• Reduce cost shift of Medicare costs to state Medicaid programs
Slide 15
Dual Eligibles Account for More than One-Fourth of Total Medicaid
Expenditures in Illinois
Dual Eligibles28%
Source: Urban Institute estimates based on data from the Medicaid Statistical Information System (MSIS) and Medicaid Financial Management Reports preparedfor the Kaiser Commission on Medicaid and the Uninsured, 2003.
Slide 16