Medicaid at the Crossroads
Cindy MannCenter for Children and Families
Georgetown University Health Policy [email protected]
Medicaid SummitChicago, Illinois
November 3, 2005
What’s At Stake?
• Coverage– Children, families– Pregnant women– Adults and children with disabilities– Elderly
• Integral to other systems/programs• Major source of financing
– States– Health care providers– Communities
Slide 1
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 2
Why the Attention to Medicaid?
Slide 3
Average Annual Growth in Medicaid Expenditures, 1991-2003
27.0%
10.0%
3.6%
7.8%
11.8%
7.1%
1991-1992 '92-'95 '95-'98 '98-2000 '00-'02 '02-'03
Source: Urban Institute, 2005; data from HCFA Financial Management Reports, 2004 (HCFA-64/CMS-64).
Slide 4
Education*45.5%
All Other28.6%
Public Assistance
0.5%
0.3%
Medicaid19.0%
Corrections6.1%
Transportation
Corrections3.3%
Medicaid25.4% 11.2%
Public Assistance
0.4%
All Other29.5%Education*
30.2%
Transportation
Medicaid as a Percent of Illinois’ Expenditures
General Fund Expenditures Total Expenditures
Total= $19.0 billion Total= $37.7 billion*“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
Percentage of All Firms Offering Health Benefits, 2000-2005
69%
60%
2000 2005*The difference between the offer rate in 2000 and the offer rate in 2005 is statistically significant at p<.05.Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2005; KPMG Survey of Employer-Sponsored Health Benefits, 1996
Slide 6
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 7
Source: Georgetown Center for Children and Families analysisbased on FY 2002 CMS MSIS data.
Ideological Divide
• “Medicare and Medicaid have grown exponentially, beyond original fiscal projections, and their trajectories pose a serious threat to other budgetary priorities and to overall long-term economic growth.. (They) must evolve into individual-centered health systems..”– Newt Gingrich, AEI
• “Jeb Bush, has a different, better cure -- a consumer-driven program that fundamentally alters Medicaid's power equation: it allows consumers to allocate their own health care, instead of bureaucrats doing so on their behalf.”– Herzlinger and Nerney, Manhattan Institute
Slide 8
Solutions?
• Reduce scope of coverage
• Increase beneficiary costs
• Reduce federal role– Financial support– Minimum program standards
• Move from defined benefits to defined contribution
Slide 9
What’s At Stake?Key Elements of Medicaid
• Affordable
• Comprehensive and defined benefits; “EPSDT” for children– Covers services typically not covered under
ESI
• Guarantee of coverage if eligible (“entitlement”)
• Open-ended federal financing
Slide 10
House proposal Selected state waivers
Entitlement Generally retained– but for what?
Enrollment freezes/caps for some populations
Open- ended federal
financing
Retained Aggregate and per capita caps on federal funding
Slide 11
House proposal Selected state waivers
Affordable Cost sharing allowed up to 5% of income for many groups of beneficiaries
New premiums and copays; in one state, very broad discretion particularly for adults
“Premium assistance”/
“consumer choice” model would leave many of the rules to private plans
Slide 12
OHP Standard Enrollment January 2002-October 2003
100,952
50,938
95,701
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2
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2
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Oc
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No
v-0
2
De
c-0
2
Ja
n-0
3
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3
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3
Oc
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3
Premiums and Other OHP2 Changes Implemented
Source: McConnell, J. and N. Wallace, “Impact of Premium Changes in the
Oregon Health Plan,” Office for Oregon Health Policy and Research, February 2004.
Slide 13
15
70
28
124
Serious Adverse Events* Emergency Dept. Visits
Pre-copay Post-copay
Drug Copayments Reduced Use of Essential Medications and Led to
Serious Problems88% increaseIn emergencydept. visits78%
increase in adverse events
# Events per 10,000 person-months
*Includes hospitalizations, institutionalizations, and deaths.Source: R. Tarnblyn et al. JAMA 285(4): 421-9, 2001.
Slide 14
House proposal Selected state waivers
Comprehensive and defined
benefits
“EPSDT” eliminated for “optional” children
Broad discretion to state to set benefits
“Health Opportunity Accounts” 10-state demo
Bare bones plan allowed (for adults)
“Premium assistance”/ “consumer choice” model would leave much of the design of the benefit package to private plans
Slide 15
Florida Estimates of Total Medicaid Spending, With and Without Waiver
$8
$9
$10
$11
$12
$13
$14
2006-07 2007-08 2008-09 2009-10 2010-11
Bil
lio
ns
Total 5-year reduction in spending: $4.58 billion
With Waiver
Without Waiver
Slide 16
Source: Georgetown Center for Children and Families analysis of Tables 4 and 5 from
Florida Medicaid Reform Section 1115 Waiver Application, August 31, 2005.
Federal rules for all aspects of the program
State rules only- minimal federal standards
Federal minimum requirements and state options
Federal guarantee of shared financing
Flexibility and Financing: Finding the Right Balance
Capped federal financing needed to limit federal exposure
Full federal financing
Slide 17
Real Issues Facing Medicaid
• Millions of people who are uninsured • State revenue system issues
– Added pressures during downturns
• Broader issues relating to health care costs• Managing care for high cost cases
– Disconnect between Medicaid and Medicare
• Alignment of responsibilities between federal government and states– Cost of “dual” eligibles and aging population
Slide 18
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 19
Medicaid Is An Important Part of the Solution
Slide 20
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 21
Average Annual Medicaid Spending Growth Compared to Growth in
Private Health Spending, 2000-2003
6.9%
9.0%
12.6%
Medicaid Acute CareSpending Per
Enrollee
Health Care SpendingPer Person with
Private Coverage1
Monthly PremiumsFor Employer-
Sponsored Insurance2
Sources: 1 Strunk and Ginsburg, 2004. 2 Kaiser/HRET Survey, 2003.
Slide 22
Trends in the Uninsured Rate of Low-Income Children, 1997 - 2003
22.6% 22.1% 21.5% 21.1%
17.8%15.8% 15.0%
10%
15%
20%
25%
30%
1997 1998 1999 2000 2001 2002 2003
Uninsured rate of children under 18
Source: Georgetown Center for Children and Families calculations based on Cohen, R. et al., Health Insurance Coverage: Estimates from the National Health Interview Survey, January – September 2004, Centers for Disease Control, March 2005 and Trends in Health Insurance and Access to Medical Care for Children Under Age 19 Years: United States, 1998 – 2003, April, 2005.
Slide 23
48%
20%
11% 13%
Adults Children
Medicaid Privately Insured
Self-Reported Health Status Among Low-Income Adults and Children
Source: Urban Institute analysis of MEPS data from 1996, 1997, 1998, and 1999; Hadley and Holahan, Inquiry, Vol. 40, No. 4 (Winter 2003/2004).
Slide 24
*Poverty status is based on family income and family size using the U.S. Census Bureau poverty thresholds for 2002. Federal Poverty Level (FPL) in 2002 in the 48 contiguous states and the District of Columbia is $15,020 for a family of three. Source: National Health Interview Survey, 2003.
94.4% 92.8%
61.2%
96.2% 95.5%
67.9%
Percent of Poor and Near-poor Children with a Usual Place of Care
Public, Private, and Uninsured
Poor Children* Near-Poor Children*
Slide 25
Moving Forward Without Moving Backward
Slide 26
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