Medicaid: 35 Years of Service - CMS...on the program’s role in the U.S. health care system. The...

On this 35th anniversary of the enact-ment of Medicaid, it is important to reflecton the program’s role in the U.S. healthcare system. The Medicaid program is thethird largest source of health insurance inthe United States—after employer-basedcoverage and Medicare. The significance ofMedicaid’s role in providing health insur-ance cannot be overstated. As the largest inthe Federal safety net of public assistanceprograms, Medicaid provides essentialmedical and medically related services tothe most vulnerable populations in society.In 1998, the Medicaid program covered41.4 million1 low-income children, theirfamilies, elderly people, and individualswith disabilities—approximately 12 percentof the total U.S. population.2

Since its inception in 1965, Medicaidenrollment and expenditures have grownsubstantially. In addition, the program hasevolved as Federal and State governmentsbalance social, economic, and political fac-tors affecting this and other public assistanceprograms. This article presents an overviewof the Medicaid program and highlightstrends in enrollment and expenditures.

OVERVIEW

Medicaid was enacted in the same legis-lation that created the Medicare pro-gram—the Social Security Amendments of

1965 (Public Law 89-97). Prior to the pas-sage of this law, health care services forthe indigent were provided primarilythrough a patchwork of programs spon-sored by State and local governments,charities, and community hospitals.

Before 1965, Federal assistance to theStates for the provision of health care wasprovided through two grant programs. TheSocial Security Amendments of 1950 provid-ed Federal matching funds for State pay-ments to medical providers on behalf of indi-viduals receiving public assistance payments.In 1960, the Kerr-Mills Act created a new pro-gram called Medical Assistance for the Aged.This means-tested grant program providedFederal funds to States that chose to coverthe medically needy aged, who were definedas elderly individuals with incomes above lev-els needed to qualify for public assistance butin need of assistance for medical expenses.

In 1965, Congress adopted a combinationof approaches to improve access to healthcare for the elderly. The Social SecurityAmendments of 1965 created a hospitalinsurance program to cover nearly all of theelderly (Medicare Part A), a voluntary sup-plementary medical insurance program(Medicare Part B), and an expansion of theKerr-Mills program to help elderly individu-als with out-of-pocket expenses, such as pre-miums, copayments, deductibles, and costsfor uncovered services. At the same time,Congress decided to extend the Kerr-Millsprogram—now the Medicaid program—tocover additional populations including fami-lies with children, the blind, and the disabled.

In general, Medicaid provides threetypes of critical health protection: (1)health insurance for low-income families

HEALTH CARE FINANCING REVIEW/Fall 2000/Volume 22, Number 1 141

The authors are with the Office of Strategic Planning, HealthCare Financing Administration (HCFA). The views expressedin this article are those of the authors and do not necessarilyreflect the views of HCFA.

Medicaid: 35 Years of ServiceChristie Provost, M.P.P., and Paul Hughes, M.P.P.

1 Enrollment data from HCFA Form 2082.2 Data from HCFA’s Office of the Actuary. The percent of thepopulation covered by Medicaid was estimated using averageMedicaid enrollment data and U.S. Census Bureau estimates ofthe national population.

and people with disabilities; (2) long-termcare (LTC) for older Americans and indi-viduals with disabilities; and (3) supple-mental coverage for low-income Medicarebeneficiaries for services not covered byMedicare (e.g., outpatient prescription drugs)and Medicare premiums, deductibles, andcost sharing.

Medicaid is a joint Federal and State pro-gram. Each State establishes its own eligi-bility standards, benefits package, paymentrates, and program administration underbroad Federal guidelines. As a result,there are essentially 56 different Medicaidprograms—one for each State, territory,and the District of Columbia.

Eligibility

Medicaid eligibility is based on a combi-nation of financial and categorical require-ments. Medicaid is a means-tested pro-gram. Beneficiaries must be low-incomeand meet certain asset and resource stan-dards. Each State determines incomethresholds and resource standards fortheir Medicaid program, following Federalguidelines. These thresholds and stan-dards can vary by State, and may differ foreach Medicaid-eligible population groupwithin a State (i.e., children, adults, elderly,individuals with disabilities.)

Medicaid does not provide medicalassistance to all low-income individuals.Traditionally, Medicaid has been availableonly to persons in certain categories: mem-bers of families with children and pregnantwomen, and to persons with disabilities orwho are aged or blind. Low-income indi-viduals who did not fit into one of these cat-egories, such as childless couples or adultswithout disabilities, typically did not quali-fy for Medicaid—regardless of how lowtheir income. Program waivers and addi-tional mandatory eligibility groups haveprovided States with opportunities to

extend Medicaid services to populationsbeyond the traditional welfare-definedgroups.

Initially, eligibility for Medicaid waslinked to receipt of cash assistance fromAid to Families with Dependent Children(AFDC) and, starting in 1972, SupplementalSecurity Income (SSI). Over time, legisla-tive changes to the Medicaid program andthe AFDC welfare program have led to thecreation of certain Medicaid groups whereeligibility is based solely on income andresources, not receipt of cash assistance.Some of these non-cash groups are referredto as the poverty-related groups. Congresscreated these groups in the late 1980s in aneffort to expand Medicaid coverage ofpregnant women and children by delinkingMedicaid eligibility from receipt of AFDC.Poverty-related groups are an increasingproportion of Medicaid eligible individuals.

The Medicaid statute identifies certainpopulations that States are required tocover and other populations that Statesmay choose to cover. All States must pro-vide Medicaid coverage to the followingeligibility groups:• Certain low-income families—States are

required to provide Medicaid to individ-uals who meet the requirements of theAFDC program that were in effect intheir State as of July 16, 1996.

• Poverty-related groups—States arerequired to provide Medicaid to certainpregnant women and children under age6 with incomes up to 133 percent of theFederal poverty level (FPL). States mustalso cover all children born afterSeptember 30, 1983, with incomes up to100 percent of FPL. This requirementwill result in the mandatory coverage ofall children below 100 percent of FPLunder age 19 by 2003.

• Current and some former recipients ofSSI—States are generally required toprovide Medicaid to recipients of SSI.

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States, however, may use more restric-tive eligibility standards for Medicaidthan those used for SSI if they wereusing those standards prior to the enact-ment of SSI in 1972.

• Foster care and adoption assistance—States must provide Medicaid to allrecipients of foster care and adoptionassistance under Title IV-E of the SocialSecurity Act.

• Certain Medicare beneficiaries—StateMedicaid programs must provide sup-plementary assistance to low-incomeMedicare beneficiaries. All Medicarebeneficiaries with incomes below theFPL receive Medicaid assistance for pay-ment of Medicare premiums, deduct-ibles, and cost sharing. These individualsare qualified Medicare beneficiaries(QMBs). In addition, individuals at thelowest income levels are entitled to fullMedicaid benefits, which provide cover-age for services not covered byMedicare such as outpatient prescriptiondrugs. Medicare beneficiaries withincome levels slightly higher than theFPL receive Medicaid assistance for pay-ment of Medicare premiums. Theseindividuals are specified low-incomeMedicare beneficiaries (SLMBs).States have the option to provide

Medicaid coverage to other groups. Theseoptional groups fall within the defined cat-egories previously mentioned but thefinancial eligibility standards are more lib-erally defined. Optional eligibility groupsinclude:• Poverty-related groups—States may

choose to cover certain higher-incomepregnant women and children defined interms of family income and resources.For example, some States have chosento cover pregnant women and infantswith family incomes up to 185 percent ofFPL or higher.

• Medically needy—States may choose tocover individuals who do not meet thefinancial standards for program benefitsbut fit into one of the categorical groupsand have income and resources withinspecial medically needy limits estab-lished by the State. Individuals withincomes and resources above the med-ically needy standards may qualify byspending down—i.e., incurring medicalbills that reduce their income and/orresources to the necessary levels.

• Recipients of State supplementary incomepayments—States have the option to pro-vide Medicaid to individuals who are notreceiving SSI but are receiving State-only supplementary cash payments.

• LTC—States may cover persons residingin medical institutions or receiving cer-tain LTC services in community settingsif their incomes are less than 300 percentof SSI.

• Working disabled—States have the optionto provide Medicaid to working individu-als who are disabled, as defined by theSocial Security Administration, who can-not qualify for Medicaid under any statu-tory provision due to their income. IfStates choose to cover this group, thenthey may also cover individuals who loseMedicaid eligibility as a result of losingSSI due to medical improvement.States also have the discretion to expand

eligibility beyond these optional groups.Through demonstrations, such as the 1115research and demonstration projectauthority, and statutory provisions thatallow less restrictive methodologies for calculating income and resources (i.e., section 1902(r)(2)), States may provideMedicaid services to individuals who donot meet standard Medicaid financial orcategorical requirements. This discretionhas aided States significantly in theirhealth care reform efforts.


Financing

The Medicaid program is jointlyfinanced by the States and the FederalGovernment. Medicaid is an entitlementprogram and the Federal spending levelsare determined by the number of peopleparticipating in the program and servicesprovided. Federal funding for Medicaidcomes from general revenues. There is notrust fund for Medicaid as there is forMedicare Part A or Social Security.

The Federal Government contributesbetween 50 percent and 83 percent of thepayments for services provided under eachState Medicaid program. This Federalmatching assistance percentage variesfrom State to State and year to year becauseit is based on the average per capita incomein each State. States with lower per capitaincomes relative to the national averagereceive a higher Federal matching rate.The Federal matching rate for administra-tive costs is uniform for all States and isgenerally 50 percent, although certainadministrative costs receive a largerFederal matching rate.

Services

The Medicaid benefit package is definedby each State, based on broad Federalguidelines. There is much variationamong State Medicaid programs regardingnot only which services are covered, butalso the amount of care provided withinspecific service categories (i.e., amount,duration, and scope of services).

Each State Medicaid program mustcover mandatory services identified instatute. Some of the mandatory servicesinclude: inpatient and outpatient hospitalservices, physicians’ services, rural healthclinic and federally qualified health center(FQHC) services, laboratory and X-ray ser-vices, and well-child services (i.e., Early

and Periodic Screening, Diagnosis, andTreatment Services [EPSDT]). In additionto the mandated services, States have thediscretion to cover additional services—i.e., optional services. States may chooseamong a total of 33 optional services tocover under their Medicaid programs,including prescription drugs, physicaltherapy, dental services, and eyeglasses.

Major Legislative Milestones

Since Medicaid was enacted, the FederalGovernment has made significant changesin program eligibility criteria, financing,and services provided. In addition, Stateshave used their discretion to implementtheir own changes in the program. Manyof the changes to the Medicaid programhave been in response to the growing num-ber of low-income individuals in need ofmedical assistance, the need to improveaccess to care, and the need to contain therising costs of providing medical assis-tance. The following are some of the leg-islative changes since the Medicaid pro-gram was established in 1965.

1965—The Medicaid Program, autho-rized under Title XIX of the Social SecurityAct, is enacted to provide health care ser-vices to low-income children deprived ofparental support, their caretaker relatives,the elderly, the blind, and individuals withdisabilities.1967—EPSDT comprehensive health ser-vices benefit for all Medicaid childrenunder age 21 is established.1972—Medicaid eligibility for elderly,blind, and disabled residents of a State canbe linked to eligibility for the newly enact-ed Federal SSI program if a State chooses.1981—Freedom of choice waivers(1915b) and home and community-basedcare waivers (1915c) are established;States are required to provide additional


payments to hospitals treating a dispropor-tionate share of low-income patients (i.e.,disproportionate share hospitals [DSH]).1986—Medicaid coverage for pregnantwomen and infants (up to 1 year of age) to100 percent of FPL is established as aState option.1988—Medicaid coverage for pregnantwomen and infants to 100 percent of FPL ismandated; special eligibility rules areestablished for institutionalized personswhose spouse remain in the community toprevent spousal impoverishment; QMBgroup is established to pay Medicare pre-miums and cost-sharing charges for bene-ficiaries with incomes and resources belowestablished thresholds.1989—Medicaid coverage of pregnantwomen and children under age 6 to 133percent of FPL is mandated; expandedEPSDT requirements are established.1990—Phased-in coverage of childrenages 6-18 under 100 percent of FPL isestablished; Medicaid prescription drugrebate program established; SLMB eligibil-ity group is established.1991—DSH spending controls estab-lished; provider donations are banned;provider taxes are capped.1996—Welfare Reform—AFDC entitle-ment program is replaced by theTemporary Assistance for Needy Families(TANF) block grant; welfare link toMedicaid is severed; enrollment/termina-tion of Medicaid is no longer automatic withreceipt/loss of welfare cash assistance.1997—Balanced Budget Act of 1997(BBA)—State Children’s Health InsuranceProgram (SCHIP) is created; limits onDSH payments are revised; new managedcare options and requirements for Statesare established.

MEDICAID PROGRAM TRENDS

Beneficiaries

One indicator of Medicaid growth andprogram evolution is the trend in enroll-ment. In 1978, Medicaid covered approxi-mately 9 percent of the total U.S. popula-tion. By 1998, Medicaid covered 12 per-cent of the total U.S. population. Many fac-tors contribute to this increase in coverage;the most significant is the creation of neweligibility groups.

The number of individuals served by theMedicaid program remained relativelyconstant from 1977 to 1989. The eligibilityexpansions mandated in the 1980s led tosignificant increases among certain eligi-bility groups, especially pregnant womenand children. Prior to implementation ofthese expansions, the number of personsserved was approximately 23.5 million in1989. This number reached 36.3 million in1995 (Figure 1).

A recent decline in the number of indi-viduals enrolled and served throughMedicaid is attributed to a variety of factorsincluding: fewer people in poverty, lowerrates of unemployment, and the delinkingof Medicaid and welfare assistance in 1996(i.e., the inappropriate termination of fami-lies who lost eligibility for cash assistancebut retained eligibility for Medicaid). Inparticular, there has been a steady declinein the number of children enrolled inMedicaid since 1996 (Figure 2).

Projections of Medicaid enrollment forthe next decade show moderate growthcompared with the 1990s. Total enroll-ment, measured in person years (i.e., fullyear equivalent enrollees), is currently pro-jected to increase at an annual average rateof about 1 percent, from 32.5 million in 1998


to 37.6 million in 2010. The blind and dis-abled population is projected to increase attwice the rate of all other eligibility groups.

Another enrollment trend is the increasein the number of non-cash beneficiaries.Non-cash beneficiaries qualify forMedicaid based solely on their income andresources (e.g., poverty-related groups).The establishment of non-cash eligibilitygroups allows States to provide Medicaidto low-income individuals such as theworking poor whose incomes precludethem from qualifying for cash assistance.With the creation of non-cash eligibilitygroups, Medicaid has evolved to servemore than just welfare families. In fiscalyear (FY) 1998, less than one-half (42.7percent) of all Medicaid enrollees receivedsome form of welfare cash assistance, andover 25 percent of beneficiaries were clas-sified as poverty related (Figure 3).

Women and Children

Not surprisingly, females comprise alarger share of the Medicaid population(57.4 percent) than males (38.8 percent)due to their roles as mothers of childrenand their greater likelihood of nursinghome entry (Figure 4). Medicaid providesprotection for low-income women and theirfamilies from exhausting limited incomeand resources on LTC services. Medicaidhas also had an impact on women’s health.

Expansions in Medicaid eligibility cou-pled with presumptive eligibility for preg-nant women and targeted outreach efforts(e.g., outstationed eligibility workers) haveincreased the availability of prenatal careservices for pregnant women. The propor-tion of all women giving live births whostarted prenatal care during the firsttrimester increased from 75.8 percent in1990 to 82.8 percent in 1998. Infant mortali-ty (under 1 year of age) has decreased from

9.2 deaths per 100,000 live births in 1990 to7.2 deaths per 100,000 live births in 1998(National Center for Health Statistics, 2000).

Medicaid plays a prominent role in pro-viding health insurance to low-income chil-dren. Historically, children have represent-ed the largest eligibility group served byMedicaid. The eligibility expansions in the1980s, coupled with a recession, contributedto the significant growth in enrollment ofchildren throughout the early 1990s.

By the mid to late 1990s, lower unemploy-ment rates, due to a strong economy, con-tributed to a decline in Medicaid enrollment.Between 1995 and 1998, the proportion ofchildren covered by Medicaid dropped from23.2 percent to 19.8 percent. As Medicaidenrollment has declined, the percent of unin-sured children increased from 13.8 percentin 1995 to 15.4 percent in 1998 (U.S. Bureauof the Census, 2000) (Figure 5).

Medicaid coverage of children is signifi-cant among all age groups. However, cov-erage is more prevalent among youngeraged children. From 1987 to 1993,Medicaid coverage of children under age 3climbed from 19.0 percent to 34.6 percent.However, by 1998 the proportion of chil-dren under age 3 covered by Medicaid haddropped to 25 percent. Similar trendsoccurred in other age groups. In the agegroup 3-5, 17.8 percent of children werecovered by Medicaid in 1987, increasing to29.8 percent in 1993, and then dropping to22.9 percent in 1998. Less dramaticchanges were seen for children in the agegroup 12-17. In 1987, 11.7 percent of thisage group was covered by Medicaid withthis increasing to 16.6 percent by 1993, anddecreasing slightly by 1998 to 15.5 percent(Figure 6).

Children (including children with dis-abilities) represent 54 percent of the 41.4million individuals enrolled in Medicaid inFY 1998. The children Medicaid served in


FY 1998 represented one out of five chil-dren in the Nation. Over one-third of allchildren in the U.S. under age 6 receivedMedicaid services in FY 1998 (Figure 7).

Elderly

The number of Medicaid beneficiaries,age 65 or over, has grown only slightly overtime. Growth in the number of elderlyMedicaid beneficiaries has been much lowerthan the increase in the elderly U.S. popula-tion as a whole. In 1975, Medicaid covered3.6 million older Americans or roughly 17percent of the 21.7 million Americans age 65or over. In 1998, Medicaid served nearly 4million elderly beneficiaries, or 12 percent ofthe 32.4 million age 65 or over population(U.S. Bureau of the Census, 1999).

The elderly’s representation among allMedicaid beneficiaries has actuallydeclined over time. In 1973, the populationage 65 or over represented 19 percent of allMedicaid beneficiaries. In 1998, individu-als age 65 or over represented 11 percentof the Medicaid population (U.S. Bureau ofthe Census, 1999).

Medicaid beneficiaries age 65 or overaccount for a disproportionate share oftotal Medicaid expenditures. This is due tothe high cost of services utilized by thispopulation (e.g., LTC facilities) and not thesize of the population. In 1998, elderly ben-eficiaries represented 11 percent of totalMedicaid persons served yet they account-ed for 31 percent of total Medicaid expen-ditures (Figure 8).

Individuals with Disabilities

The fastest growing Medicaid eligibilitygroup is the disabled. Medicaid servedapproximately 6.6 million individuals withdisabilities in FY 1998. The proportion ofMedicaid beneficiaries with disabilities hasincreased over time. In FY 1973, the blind

and disabled represented 11 percent of thetotal Medicaid population receiving ser-vices with this growing to 18 percent by FY1998 (Figure 9).

In terms of provider payments, growthin expenditures for the blind and peoplewith disabilities outpaced other eligibilitygroups. In 1978, blind and disabled indi-viduals served through Medicaid repre-sented 32.4 percent of total provider pay-ments. By 1998, the blind and individualswith disabilities accounted for 43.6 percentof total provider payments (Figure 10).

One contributing factor to the growth inthis eligibility group and expenditures dur-ing this time period has been the acquiredimmunodeficiency syndrome (AIDS). Medi-caid is the largest single payer of directmedical services for persons living withAIDS. Medicaid serves over 50 percent ofall persons living with AIDS, and up to 90percent of all children with AIDS (HealthCare Financing Administration, 2000a).HCFA estimates combined Federal andState Medicaid expenditures for beneficia-ries with AIDS at $4.1 billion in FY 2000.

Services

Institutional LTC Services

The most significant trend in Medicaidservices is the growth in LTC expendi-tures. Medicaid is the primary source ofLTC insurance for the elderly and peoplewith disabilities, including middle-incomeindividuals who spend down their financialresources. Medicaid covers skilled nurs-ing facility care, intermediate care facilitiesfor the mentally retarded and developmen-tally disabled, and home and community-based services.

Medicaid’s role as primary insurer forLTC has grown significantly. In 1968,Medicaid accounted for about 24 percentof total nursing home care expenditures.


In 1998, total Medicaid expenditures (Stateplus Federal expenditures) for nursingfacility services were $44.1 billion. Thisaccounts for almost one-half (46 percent)of all U.S. spending on nursing home care(Health Care Financing Administration,2000b).

The magnitude of Medicaid’s nursingfacility expenditures reflects the high costof these services as well as the limited cov-erage under Medicare and private insur-ance. Nursing facility expenditures alsodrive the distribution of Medicaid spendingamong beneficiaries. In 1998, only 4 per-cent (1.6 million) of all persons served byMedicaid received nursing facility ser-vices. However, the $44.1 billion spent ontheir service accounted for approximately25 percent of total Medicaid expenditures.

Home and Community-Based Services

Although most LTC is for institutionalcare, Medicaid has made great strides inshifting the delivery of services to home andcommunity-based settings. Medicaid’s homeand community-based services waiver pro-gram (i.e., 1915(c) waivers) affords Statesthe flexibility to develop and implement cre-ative alternatives to institutionalizingMedicaid-eligible individuals. States havethe flexibility to design a waiver program andselect the mix of services including certainnon-medical, social and supportive servicesto best meet the needs of the population theywant to serve in the home or community.

States are using these programs to pro-vide services to a diverse LTC population,including the elderly, individuals withphysical and developmental disabilities,those with chronic mental illness, mentalretardation, and persons with AIDS.During FY 1998, home and community-based waivers served over 467,000 benefi-ciaries. As of April 1999, 240 1915(c) waiver

programs were operating in 49 States(Health Care Financing Administration,1999). Community-based LTC increasedfrom 14.9 to 25.3 percent of LTC spendingfrom 1992 to 1998 (Figure 11).

In 1998 Medicaid accounted for 17 per-cent of total spending on home health carein the U.S. (Health Care FinancingAdministration, 2000b). Unlike the homehealth benefit under Medicare, Medicaiddoes not require individuals to have a needfor skilled care in order to qualify for ser-vices. Medicaid home health generally is aLTC benefit for low-income individuals.

Medicaid Expenditures

From the inception of the Medicaid pro-gram through the late 1980s, overallMedicaid spending grew at a rate that wascomparable to national health spending.Since then, however, Medicaid averageannual spending growth has outpaced therate of growth in national health spending.Medicaid expenditures have nearly tripledsince the late 1980s. By FY 1998, totalMedicaid program spending reached$175.1 billion. The average annual realgrowth rate in total spending was 5.9 per-cent throughout the 1980s. During the1990s, the average annual real growth rateincreased to 9.8 percent, most of whichoccurred in the early 1990s.

Medicaid’s share of national healthspending has increased over the past threedecades. In 1966, Medicaid spendingaccounted for only 2.9 percent of totalnational health expenditures. By 1998,Medicaid as a share of health care spend-ing had risen to 14.8 percent, approximate-ly a 5-fold increase over the 32-year period.The total public sector portion of nationalhealth care expenditures increased from30.2 percent in 1966 to 45.4 percent in 1998(Figure 12).


A variety of factors contribute to theannual growth rate in Medicaid programexpenditures. Changes in Federal andState policy, for example, have a significantimpact on spending. Congressionally man-dated expansions in Medicaid eligibilitycategories explain some of the expendituregrowth. However, program spendingincreased the fastest between 1989 and1992, mainly as a result of State providertax and donation mechanisms designed tomaximize Federal Medicaid payments.Several factors account for the relativelyslow growth of Medicaid spending inrecent years: a booming economy whichhas slowed enrollment growth; lower med-ical price inflation; the expansion of man-aged care and other cost containment mea-sures; and restrictions on DSH expendi-ture growth (Figures 13 and 14).

Many of the factors contributing to therecent slowdown in spending growth willbe temporary, producing a gradual returnto future higher growth rates. For exam-ple, the projected rate of DSH spendingwill slow considerably in the near term as aresult of reductions in annual allotments.While DSH payments account for a largepart of the increased spending during thepast decade, HCFA estimates thatMedicaid expenditures on behalf of chil-dren and individuals with disabilities willdrive future spending: both groups havethe highest expenditure growth rates andthe disabled account for the largest shareof Medicaid expenditures. Total Medicaidspending is currently projected to reach$444 billion in FY 2010. Case-load growthaccounts for about one-sixth of theincrease during this period; inflationaccounts for one-third; and the balance canbe explained by spending per enrollee inexcess of inflation (HCFA, 2000c).

HCFA projects that total Medicaid out-lays will grow at an average annual rate ofabout 8 percent between FYs 1998 and

2010. DSH expenditures will grow theleast (a 1-percent annual average), whilespending for people with disabilities andchildren will grow the most (9 percentannual average), followed by adults (8 per-cent) and the elderly (7 percent) (HCFA,2000c).

Medicaid spending accounts for a signif-icant portion of State budgets. In FY 1999,over 14 percent of total State general fundswere spent on Medicaid. In addition, over43 percent of total Federal funds providedto States in FY 1999 were spent onMedicaid (Figure 15).

Administrative Expenses

Medicaid administrative expenses arelow compared with that of private insur-ance. For much of the past 30 years,Medicaid administrative expenses, as a per-cent of total program expenditures, haveremained fairly constant—between 4.0 and6.5 percent—compared with approximately12 percent for major insurance plans.Overall growth rates for the most part havebeen relatively flat but suggest a gradualincrease over the period with somewhatgreater fluctuation in the past 4 years.Administrative expenses have risen by 2.5percentage points in the past year to reacha 32-year high of 6.5 percent (Health CareFinancing Administration, 2000b).

Spending By Eligibility Group

During the past two decades, Medicaidspending on behalf of the blind, individualswith disabilities and the elderly has grownsignificantly. This change reflects thegrowing Medicaid disabled population andthe spiraling costs associated with institu-tional LTC services.

While the aged, the blind, and peoplewith disabilities account for only 26 per-cent of all Medicaid persons served in FY


1998, the Medicaid payments made ontheir behalf account for 71 percent of pro-gram payments. The largest group, chil-dren, account for only 16 percent of allMedicaid payments (Figure 16).

This pattern in distribution of Medicaidpayments by eligibility group goes back tothe mid-1970s. Since 1975, Medicaid pay-ments for the elderly and disabled haveexceeded payments for adults and chil-dren. During the late 1970s and early1980s, payments for the elderly and the dis-abled have generally been similar, withpayments for the elderly slightly higher.Starting in 1987, however, payments forindividuals with disabilities began to surpasspayments for the elderly. Furthermore,since 1992, there has been a dramaticgrowth in spending for the disabled(Figure 17).

Between FYs 1978 and 1998, real percapita spending for elderly Medicaid bene-ficiaries grew the fastest among all eligibil-ity groups (an average annual growth rateof 4.9 percent). Per capita program pay-ments on behalf of the blind and disabledgrew somewhat slower (a 3.7-percent aver-age annual increase). In contrast, spend-ing for children and adults grew at moremodest rates (average annual growth ratesof 2.8 and 2.2 percent, respectively)(Figure 18).

Dual eligible beneficiaries are Medicarebeneficiaries who also qualify for Medicaidbenefits due to their low income. Medicaidspends a disproportionate share of pro-gram funds on behalf of dual eligible bene-ficiaries. During FY 1997, 6.4 million dualeligibles represented only 19 percent of theMedicaid population, but accounted for 35percent of program expenditures (Clarkand Hulbert, 1998).

Medicaid Managed Care

One of the most significant developmentsfor the Medicaid program has been thegrowth of managed care as an alternativeservice delivery method. Federal outlaysfor Medicaid premium payments toMedicaid managed care plans increasedfrom $700 million in FY 1988 to $13.2 billionin FY 1998. State interest in pursuingMedicaid managed care initiatives began inthe early 1980s when a combination of risingMedicaid costs and the national recessionput pressure on States to control spendinggrowth. Since then, States have continuedto experiment with various managed careapproaches in their efforts to reduce unnec-essary utilization, contain costs, and achievegreater coordination and continuity of care.

Throughout the 1990s, States signifi-cantly expanded their Medicaid managedcare programs. In 1991, less than 10 per-cent of all Medicaid beneficiaries wereenrolled in managed care plans. By 1998,nearly 54 percent (16.5 million) of theMedicaid population was enrolled in man-aged care plans (Figure 19).

Although Medicaid managed care enroll-ment has grown rapidly in the aggregate,wide variation in penetration rates existsamong the States. Two States have no man-aged care enrollment (Alaska andWyoming), 12 States have penetration ratesbetween 76 and 100 percent (Arizona,Colorado, Delaware, Georgia, Hawaii, Iowa,Montana, New Mexico, Oregon, Tennessee,Utah, and Washington). The contrasts caneven be observed between neighboringStates such as North and South Carolina.During 1998, South Carolina enrolled 4 per-cent of beneficiaries in managed care whileNorth Carolina had a 69-percent managedcare penetration rate (Figure 20).


Most State Medicaid managed careenrollment consists of children and non-disabled adults. In 1998, individuals underage 21 represented over 55 percent of allMedicaid managed care enrollees, whileadults age 21-64 represented nearly 29 per-cent of total managed care enrollment(HCFA Form 2082).

The elderly and the disabled are not tra-ditionally pursued for managed care enroll-ment due to the challenge of deliveringcomprehensive services to these highneed populations while controlling costs.Several States, however, have started tomove non-elderly, disabled Medicaid bene-ficiaries into managed care. In 1998,approximately 1.6 million persons with dis-abilities were enrolled in Medicaid man-aged care programs operated by 36 differ-ent States (Regenstein and Schroer, 1998).

Managed Care Waivers

Medicaid program waivers play a signifi-cant role in the delivery of Medicaid ser-vices. Medicaid program waivers haveallowed States to test Medicaid programinnovations. The two primary mecha-nisms used for this are section 1915(b)Freedom of Choice waivers, and section1115 research and demonstration projects.

Section 1915(b) waivers are used tomandatorily enroll beneficiaries in man-aged care programs; provide additionalservices via savings produced from man-aged care, create a carve-out delivery sys-tem for specialty care (e.g., behavioralhealth, etc.), and/or create programs thatare not available statewide.

Section 1115 research and demonstra-tion projects provide States with the flexi-bility to test substantially new ideas of poli-cy merit. Under 1115 research and demon-stration projects, States are testing pro-grams that range from small-scale pilotprojects testing new benefits or financing

mechanisms, to major restructuring ofState Medicaid programs. In 1998, 19States had approved section 1115 researchand demonstration projects, 17 of whichwere operating statewide.

LTC

States are increasingly interested in pro-viding LTC services in a managed careenvironment. In addition to providing tra-ditional LTC services (e.g., home health,personal care, institutional services, etc.)States are interested in providing non-tra-ditional home and community-based ser-vices (e.g., homemaker services, adult daycare, respite care, etc.) in their managedcare programs as well. To achieve this,some States simultaneously utilize authori-ties under 1915(b) and 1915(c) to limitfreedom of choice and provide home andcommunity-based services. Currently,Texas and Michigan are operating concur-rent 1915(b) and 1915(c) waivers.

SCHIP

In order to further address the problemof uninsured children, the SCHIP was cre-ated by BBA 1997. Designed as aState/Federal partnership, SCHIP wasappropriated $24 billion over 5 years and$40 billion over 10 years to help Statesexpand health insurance to children whosefamilies earn too much to qualify forMedicaid, yet not enough to afford privatehealth insurance.

SCHIP is designed to provide healthinsurance coverage to targeted low-incomechildren who are not eligible for Medicaidor other health insurance coverage. A tar-geted low-income child is one who residesin a family with income below the greater of200 percent of FPL or 50 percentage pointsabove the State’s Medicaid eligibilitythreshold. Most States have an upper eligi-


bility limit of 200 percent of FPL, however,some States have amended their SCHIPplans to expand coverage to more children.

SCHIP is the single largest expansion ofhealth insurance coverage for childrensince the enactment of Medicaid. Whenenacted, the goal of BBA was to cover one-half of the 10 million uninsured childrenthrough Medicaid outreach and SCHIPexpansions. It has provided States with ahistoric opportunity to reduce the numberof uninsured children. As of January 1,2000, each of the States and territories hadan approved SCHIP plan in place. Of the56 approved plans, 53 were implementedand operational during FY 1999.

The SCHIP law offers States threeoptions for covering uninsured children.States can use SCHIP funds to provide cov-erage through separate children’s healthinsurance programs, expand coverageavailable under Medicaid, or combine bothstrategies. States are using all threeoptions for implementation.

Although most States use a Medicaidexpansion as part of their SCHIP plan—either separately or in combination with aseparate program—two thirds of all SCHIPchildren are being served through separateSCHIP programs. In FY 1999, nearly 2 mil-lion children were enrolled in the SCHIPprogram. States reported that over 1.2 mil-lion children were in new State-designedchildren’s health insurance programs andalmost 700,000 were enrolled in Medicaidexpansion plans in FY 1999 (Figure 21).

Note on Data Sources

A majority of the information presented inthis article is based on State-reported pro-gram data collected by HCFA (HCFA-2082and HCFA-64). Each figure cites referencesources as well as notes to clarify the data.

Terminology

The terms enrollees and beneficiaries,as used in the article, refer to individualswho are enrolled in Medicaid, includingindividuals enrolled in Medicaid managedcare plans. Medicaid data (HCFA-2082)refers to these individuals as eligibles.

The term persons served, as used in thearticle, refers to individuals for whomMedicaid program payments are made.Medicaid data (HCFA-2082) refers to theseindividuals as recipients. Starting in FY1998, recipient data included individualsfor whom managed care premium pay-ments were made.

Data Caveats—HCFA-2082 andHCFA-64

Where real spending data is shown in thecharts, adjustments have been made forinflation using the U.S. Bureau of EconomicAnalysis’ estimates of the gross domesticproduct chain-type price index (1996=100).The chain-type price indexes used for theseadjustments were published by the U.S.Bureau of Economic Analysis (2000).

Apparent inconsistencies in financial dataare due to the difference in the informationcaptured on the HCFA-2082 and HCFA-64.Adjudicated claims data are used in theHCFA-2082; actual payments are reported inthe HCFA-64. The data presented within thefigures showing total spending refers to the“Current Expenditure” line from the HCFA-64and do not reflect payment adjustments ordeductions. States claim the Federal matchfor payments to DSHs on the HCFA-64.Payments to DSHs do not appear on theHCFA-2082 since States directly reimbursethese hospitals. Finally, the HCFA-64includes data from Guam, Commonwealth ofthe Northern Mariana Islands, and AmericanSamoa.


Medicaid Managed Care EnrollmentReport

Data from this report is collected fromState Medicaid agencies and HCFA. Datais presented for all States, the District ofColumbia, the U.S. Virgin Islands, andPuerto Rico.

Current Population Survey (CPS)

The March 1995 CPS adopted new andrevised health insurance questions.Caution should be used when comparingMarch 1995 estimates with earlier esti-mates. Generally, the changes in healthinsurance questions did not have a notice-able effect on overall health insurance esti-mates. However, there is an impact forestimates regarding specific types of cov-erage. For example, employer providedhealth insurance estimates increased sig-nificantly from 57 percent in 1993 to 61 per-cent in 1994. This increase is probably theresult of a more straightforward set of pri-vate health insurance questions.

ACKNOWLEDGMENTS

The authors would like to thank the fol-lowing HCFA staff for their contributionsto this article: John Klemm, SharmanStephens, Denise Franz, Roger Buchanan,Tony Parker, Lindy Hinman, and AndrewFontanez.

REFERENCES

Clark, W.D. and Hulbert, M.M.: Research Issues:Dually Eligible Medicare and MedicaidBeneficiaries, Challenges and Opportunities. HealthCare Financing Review 20(2):1-10, Winter 1998.

Health Care Financing Administration, Center forMedicaid and State Operations: FACT SHEET,Medicaid and Acquired Immune DeficiencySyndrome (AIDS) and Human ImmunodeficiencyVirus (HIV) Infection, Health Care FinancingAdministration. Baltimore, MD. April 2000a,Health Care Financing Administration: Home andCommunity-Based Service Waivers SummaryReport. April, 1999.Health Care Financing Administration: 1998 NationalHealth Expenditures. Internet address: http://www.hcfa.gov/stats/nhe-oact/. September 2000b.Health Care Financing Administration, Office of theActuary: Data from estimates based on President’sfiscal year 2001 budget. January 2000c.National Center for Health Statistics: Health, UnitedStates, 2000. DHHS Pub. No. (PHS) 00-1232. PublicHealth Service. U.S. Government Printing Office,Hyattsville, MD. 2000.Regenstein, M. and Schroer, C.: Medicaid andManaged Care for Persons with Disabilities: StateProfiles. Report of the Kaiser Commission onMedicaid and the Uninsured. Washington, DC.December 1998.U.S. Bureau of Economic Analysis: NationalAccounts. Internet address: http://www.bea.doc.gov/bea/dn1.htm. January 28, 2000.U.S. Bureau of the Census: Poverty in the UnitedStates, 1998. U.S. Government Printing Office.Washington, DC. 1999.U.S. Bureau of the Census: Internet address:http://www.census.gov/hhes/hlthins/historic/hihistt3.html. September 2000.

Reprint Requests: Christie Provost, M.P.P., Health CareFinancing Administration, Room 325-H, Hubert H. HumphreyBuilding 200 Independence Avenue, SW., Washington, DC. E-mail: [email protected]



0

15

20

25

5

10

1977 19811979 1983 1985 1987

Fiscal Year

1989 1991 1997

Mill

ion

s o

f P

erso

ns

40

35

30

22.8

23.5

36.3

34.9

19951993

Figure 1

Persons Served Through Medicaid, Fiscal Years 1977-1997

NOTES: The trend line presents a consistent time-series data set through 1997. In 1998, a large increase occurred in thenumber of persons served through Medicaid, which is mainly the result of a new reporting methodology of classifyingpayments to managed care organizations. FY 1998 was the first year capitation payments were counted as a service forpurposes of the HCFA-2082 reporting, and thus managed care enrollees were included in the counts of individualsreceiving services through Medicaid. Persons-served are individuals for whom a Medicaid claim was paid during the year.

SOURCE: Health Care Financing Administration, Office of Information Services: Data development by EnterpriseDatabases Group, data from the 1977-1997 HCFA Form 2082, 2000.


0

15

20

5

10

19921991

16

13.4

17.9

15.1

19.4

16.3

20.3

17.2

20.4

17.2

20.5

16.7

20.4

15.8

20.219

1993 1994

Enrollees Persons Served

1995

Fiscal Year

1996 1997

Mill

ion

s o

f P

erso

ns

25

1998

Figure 2

Medicaid Populations – Children, Fiscal Years 1991-1998

NOTES: In 1998, a large increase occurred in the number of persons served through Medicaid, which is mainly theresult of a new reporting methodology of classifying payments to managed care organizations. FY 1998 was thefirst year capitation payments were counted as a service for purposes of the HCFA-2082 reporting, and thus man-aged care enrollees were included in the counts of individuals receiving services through Medicaid. Enrollees areindividuals enrolled in Medicaid at least 1 month during the year. Persons served are individuals for whom a Medicaidclaim was paid during the year or, beginning in 1998, on whose behalf Medicaid made premium payments to managed care organizations.

SOURCE: Health Care Financing Administration, Office of Strategic Planning: Data development by Planning andPolicy Analysis Group, data from 1991-1998 HCFA 2082, 2000.


Medically Needy 10.2%

Poverty Related-Groups

25.6%

Other18.0%

Unknown3.5%

Cash Recipients

42.7%

Figure 3

Medicaid Enrollees, by Maintenance Assistance Status: Fiscal Year 1998

SOURCE: Health Care Financing Administration, Office of Strategic Planning: Data development by Planning and Policy Analysis Group, data from 1998 HCFA 2082, 2000.


Female57.4%

Unknown3.7%

White43.1%

Native American

1.2%

Hispanic16.7%

Unknown10.7%

Black25.7%

Asian2.5%

Male 38.8%

Figure 4

Medicaid Enrollees, by Sex and Race: Fiscal Year 1998

NOTE: Percentages may not sum to 100 because of rounding.

SOURCE: Health Care Financing Administration, Office of Strategic Planning: Data development byPlanning and Policy Analysis Group, data from 1998 HCFA 2082, 2000.


0

40

60

20

1988

15.613.1

63.8

23.9

13.7

57.0

23.2

13.8

61.6

19.815.4

63.3

1993

Uninsured

1995

Per

cen

t o

f All

Ch

ildre

n

Selected Calendar Year

80

1998

Medicaid Employer-Based

Figure 5

Percent of Insurance Children, by Type of Coverage: Selected Calendar Years

NOTES: Children refers to all people under the age of 18. The estimates by type of coverage are not mutually exclusive; people can be covered by more than one type of insurance during the year. In 1994, health insurance questions on the Current Population Survey were redesigned; increases in estimates of employment-based coveragemay be partially due to questionnaire changes; overall coverage estimates were not affected.

SOURCE: Health Care Financing Administration, Office of Strategic Planning: Data development by Planning andPolicy Analysis Group, data from 1988, 1993, 1995, and 1998 U.S. Bureau of the Census, March Current PopulationSurvey, U.S. Government Printing Office. Washington, DC. 2000.


0

30

40

10

20

1987

19 17.8

11.7

1993 1998

Per

cen

t

Selected Calendar Year

Under Age 3

Ages 3-5

Ages 12-17

34.6

29.8

16.6

2522.9

15.5

Figure 6

Percent of Children With Medicaid, by Age Groups: Selected Calendar Years

SOURCE: Health Care Financing Administration, Office of Strategic Planning: Data development byPlanning and Policy Analysis Group, data from 1987, 1993, and 1998 U.S. Bureau of the Census, MarchCurrent Population Survey, U.S. Government Printing Office. Washington, DC. 2000.


Ages 6-20 31.7%

Ages 21-64 30.9%

Ages 65-84 8.5%

Age 85 or Over 2.8%

Unknown3.7%

Under Age 6 22.3%

Figure 7

Medicaid Enrollees, by Age: Fiscal Year 1998


SOURCE: Health Care Financing Administration, Office of StrategicPlanning: Data development by Planning and Policy Analysis Group, datafrom 1998 HCFA 2082, 2000.


Ages 6-20 30%

Unknown7%

Ages 6-20 14%

Unknown2%

Ages 21-64 30%

Ages 21-64 43%

Age 65or Over

11%

Age 65 or Over

31%

Under Age 6 21%

Persons Served Expenditures

Under Age 6 9%

Figure 8

Persons Served Through Medicaid and Expenditures, by Age: Fiscal Year 1998


SOURCE: Health Care Financing Administration, Office of Strategic Planning: Data development byPlanning and Policy Analysis Group, data from 1998 HCFA 2082, 2000.


Children48%

Adults23%

Age 65 or Over19%

Blind and Disabled11%

1973 1998

Children51%

Adults21%

Age 65 or Over11%

Blind and Disabled18%

Figure 9

Distribution of Persons Served Through Medicaid, by Basis of Eligibility: Fiscal Years 1973 and 1998

NOTES: The percentage distribution for 1973 does not include 1.5 million persons served byMedicaid whose basis of eligiblity is reported as other, and the percentage distribution for 1998does not include 3.1 million persons served whose basis of eligibility is unknown. Percentages maynot sum to 100 because of rounding. The term adults, refers to a category of non-elderly, non-disabled adults. Disabled children are included in the blind and disabled category.

SOURCE: Health Care Financing Administration, Office of Information Services: Data develop-ment by Enterprise Databases Group, data from the 1973 and 1998 HCFA 2082, 2000.


Age 65 or Over36.4%

Blind and Disabled32.4%

Children15.8% Adults

15.4%

1978 1998

Age 65 or Over29.3%

Blind and Disabled43.6%

Children16.5%

Adults10.7%

Figure 10

Distribution of Medicaid Payments, by Eligibility Group: Fiscal Years 1978 and 1998

NOTES: The percentage distribution for 1978 does not include $1.4 billion of payments (in 1998dollars) on behalf of 1.9 million persons served by Medicaid whose basis of eligibility is reported asother, and the percentage distribution for 1998 does not include $3.7 billion on behalf of 3.1 millionpersons served whose basis of eligibility is unknown. Percentages may not sum to 100 because ofrounding. Payments describe direct Medicaid vendor payments and Medicaid program expendituresfor premium payments to third parties for managed care (but exclude disproportionate share hospitalpayments, Medicare premiums, and cost sharing on behalf of dual beneficiaries). The term adultsas used refers to non-elderly, non-disabled adults. Disabled children are included in the blind anddisabled category.

SOURCE: Health Care Financing Administration, Office of Information Services: Data developmentby Enterprise Databases Group, data from the 1978 and 1998 HCFA 2082, 2000.


0

50

60

10

20

40

30

1992

$43.8

$49.1$52.8

$59.1

1996

Selected Fiscal Year

1994 1998

Rea

l Sp

end

ing

in B

illio

ns

$70 Home and Community Care Spending

Institutional Care Spending

14.9%18.6%

20.5%

25.3%

Figure 11

Medicaid Spending for Institutional Long-Term Care (LTC) and Home and Community Care,by Selected Fiscal Years

NOTES: The data are expressed in 1998 dollars. Total Medicaid LTC expenditures consist of spendingon institutional LTC and home and community care. Institutional LTC spending includes expendituresfor nursing facilities, and public and private intermediate care facilities for the mentally retarded.Home and community care spending consists of expenditures for personal care, home health, andhome and community-based waivers. The percentages (e.g., 14.9 percent, 18.6 percent, etc.) represent the proportion of total Medicaid LTC spending that is home and community care spending.

SOURCE: Health Care Financing Administration, Office of Strategic Planning: Data development byPlanning and Policy Analysis Group, data from 1992, 1994, 1996, and 1998 HCFA 64, 2000.


Medicare4.1%

1966 1998

Out-of-PocketPayments

41.6%

Other Private5.3%

Other Public23.2%

Medicaid2.9%

Private Insurance22.9%

Medicare18.8%

Out-of-PocketPayments

17.4%

Other Private4.5%

Other Public11.8%

Medicaid14.8%

Private Insurance

32.6%

Figure 12

Medicaid Expenditures as a Percent of All National Health Expenditures: Calendar Years 1966 and 1998


SOURCE: Health Care Financing Administration, Office of the Actuary: Data from the National HealthStatistics Group, 2000.


0

100

120

140

40

20

60

80

1978 19821980 1984 1986 1988

Fiscal Year

1990 1992 1998

Rea

l Exp

end

itu

res

in B

illio

ns

$200

180

160

Medical Inflation

19961994

Federal FinancialParticipation Cuts

Taxes and Donations

Eligibility Expansions

Statewide MedicaidDemonstration Projects, State-

Level Welfare Waivers andNational Welfare Reform

Figure 13

Total Medicaid Spending, by Era: Fiscal Years 1978-1998

NOTE: The data are expressed in 1998 dollars.

SOURCE: Health Care Financing Administration, Office of the Actuary: Data from the Medicare and Medicaid CostEstimates Group, 2000.


0

5

10

15

1978 19821980 1984 1986 1988

Fiscal Year

1990 1992 1998

Per

cen

tag

e C

han

ge

Ove

r P

revi

ou

s Y

ear

30

25

20

Medical Inflation

19961994

Federal FinancialParticipation Cuts

Taxes and Donations

Eligibility Expansions

Statewide MedicaidDemonstration Projects,

State-Level Welfare Waivers and

National Welfare Reform

Figure 14

Percent Change in Total Medicaid Spending in Real Terms, by Era: Fiscal Years 1978-1998

NOTE: The data are expressed in 1998 dollars.

SOURCE: Health Care Financing Administration, Office of the Actuary: Data from the Medicare and Medicaid CostEstimates Group, 2000.


Higher Education13%

State Spending: General Funds State Spending: Federal Funds Provided to States

Elementary andSecondaryEducation

34.9%

Transportation0.7%

Corrections6.8%

All Other27.1%

Medicaid14.6%

PublicAssistance

2.7%

Higher Education3.5%

Elementary andSecondaryEducation

10.3%

Transportation9.2%

Corrections0.4%

All Other28.8%

Medicaid43.6%

PublicAssistance

4.2%

Figure 15

State Medicaid Spending Compared With Other Expenditures, by Fund Sources: Fiscal Year 1999


SOURCE: Health Care Financing Administration, Office of Strategic Planning: Data development byPlanning and Policy Analysis Group, data from the National Association of State Budget Officers, 1999State Expenditure Report, 2000.


0

55

60

75

20

10

30

40

Persons Served Payments

Per

cen

t

100

90

80

8% Unknown

Adults

Children

Aged, Blind and Disabled

20%

47%

26%

3%

10%

16%

71%

Figure 16

Distribution of Persons Served Through Medicaid and Payments, by Basis of Eligibility:Fiscal Year 1998

NOTES: Totals may not equal 100 percent because of rounding. Payments describe direct Medicaid vendor payments and Medicaid program expenditures for premium payments to third parties for managed care (but excludedisproportionate share hospital payments, Medicare premiums and cost sharing on behalf of beneficiaries duallyenrolled in Medicaid and Medicare). Disabled children are included in the aged, blind and disabled category.

SOURCE: Health Care Financing Administration, Office of Strategic Planning: Data development by Planning andPolicy Analysis Group, data from 1998 HCFA 2082, 2000.


0

20,000

30,000

Fiscal Year

40,000

10,000

1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997

Children

Adults

Aged

Disabled

Rea

l Pay

men

ts in

Mill

ion

s

$60,000

50,000

Figure 17

Medicaid Payments, by Eligibility Group: Fiscal Years 1975-1997

NOTE: Expenditures expressed in 1997 dollars.

SOURCE: Health Care Financing Administration, Office of Strategic Planning: Data development by Division ofBeneficiary Research, data from 1975-1997 HCFA 2082, 2000.


0

4,000

6,000

Fiscal Year

8,000

2,000

1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998

Age 65 and Over

Blind and Disabled

Children Under Age 21

Adults

Rea

l Per

Cap

ita

Pay

men

ts

$12,000

$4,364

$10,243

$9,095

$1,876

$1,203

$3,943

$1,215

$619

10,000

Figure 18

Average Real Medicaid Payments per Person Served: Fiscal Years 1978-1998

NOTES: Data shown expressed in 1998 dollars. For fiscal year 1998 payments describe direct Medicaid vendorpayments and Medicaid program expenditures for premium payments to third parties for managed care (but excludedisproportionate share hospital payments, Medicare premiums, and cost sharing on behalf of beneficiaries duallyenrolled in Medicaid and Medicare), while data from previous years only include direct vendor payments. The termadults as used refers to a category of non-elderly, non-disabled adults. Disabled children are included in the blindand disabled category.

SOURCE: Health Care Financing Administration, Office of Information Services: Data development by EnterpriseDatabases Group, data from 1978-1998 HCFA 2082, 2000.


0

5

Year

10

1991

9.53%11.75%

14.39%

23.17%29.37%

40.10%

47.82%53.64%

1992 1993 1994 1995 1996 1997 1998

Mill

ion

s o

f E

nro

llees

20

15

Figure 19

Number and Percent of Medicaid Beneficiaries Enrolled in Managed Care, by Year1: 1991-1998

1 June 30 reporting date.

NOTE: State-reported managed care data prior to 1996 may include duplicated enrollment.

SOURCE: Health Care Financing Administration, Center for Medicaid and State Operations: Data from the 1998Medicaid Managed Care Enrollment Report, 2000.


0 Percent

AlaskaVirgin IslandsWyoming

1-25 Percent

IllinoisLouisianaMaineNew HampshireSouth CarolinaTexas

26-50 Percent

CaliforniaDistict of ColumbiaIdahoKansasMississippiMissouriNevadaNew YorkOhioOklahomaVermontWest VirginiaWisconsin

51-75 Percent

AlabamaArkansasConnecticutFloridaIndianaKentuckyMarylandMassachusettsMichiganMinnesotaNebraskaNew JerseyNorth CarolinaNorth DakotaPennsylvaniaRhode IslandSouth DakotaVirginia

76-100 Percent

ArizonaColoradoDelawareGeorgiaHawaiiIowaMontanaNew MexicoOregonPuerto RicoTennesseeUtahWashington

Figure 20

Medicaid Managed Care Penetration, 1998

SOURCE: Health Care Financing Administration, Center for Medicaid and State Operations: Data from the 1998Medicaid Managed Care Enrollment Report, 2000.


Separate Child Health Program64.9% Medicaid Expansion

35.1%

695,0631,284,387

Figure 21

State Children’s Health Insurance Program Enrollment: Fiscal Year 1999

SOURCE: Health Care Financing Administration, Office of Strategic Planning: Datadevelopment by Planning and Policy Analysis Group, data from fiscal year 1999 State Children’s Health Insurance Program Annual Enrollment Report, 2000.

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