Robin Rudowitz Associate Director Kaiser Commission for Medicaid and the Uninsured For KaiserEDU.org January 2012

1. Medicaid 101 Robin Rudowitz Associate Director Kaiser Commission for Medicaid and the Uninsured For KaiserEDU.org January 2012

2. Enacted in 1965 as companion legislation to Medicare Parts A and B (Title XIX) Entitles eligible individuals to defined set of benefits Guarantees participating states federal matching funds on open-ended basis Means-tested, with focus on welfare population: -- Children, Single parents with dependent children -- Aged, Blind, and Disabled Jointly financed by federal and state government Mandatory services and populations for participating states States have some flexibility to set eligibility, benefits, and establish payment design and care delivery Medicaid’s Origins

3. Medicaid Has Many Vital Roles In Our Health Care System Health Insurance Coverage 29 million children & 15 million adults in low-income families; 15 million elderly and persons with disabilities Assistance to Medicare Beneficiaries 8.9 million aged and disabled — 21% of Medicare beneficiaries Long-Term Care Assistance 1 million nursing home residents; 2.8 million community-based residents MEDICAID Support for Health Care System and Safety-net 16% of national health spending; 40% of long-term care services State Capacity for Health Coverage Federal share can range from 50% to 83%; For FFY 2012, ranges 50% to 74.2%

4. Medicaid’s Role for Selected Populations Percent with Medicaid Coverage: Families Aged & Disabled SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute analysis of 2009 ASEC Supplement to the CPS; Birth data from Maternal and Child Health Update: States Increase Eligibility for Children's Health in 2007, National Governors Association, 2008; Medicare data from USDHHS.

5. Medicaid Enrollees and Expenditures, FY 2008 25% 68% Total = 59.5 million Total = $317.7 billion NOTE: Percentages may not add up to 100 due to rounding. SOURCE:KCMU/Urban Institute estimates based on data from FY 2008 MSIS and CMS Form-64, 2010.

6. Medicaid Spends 40% of Dollars on Dual Eligibles Medicaid Spending Medicaid Enrollment Premiums 4% Other 8% Parents/ other Non-disabled Adults 25% Other Aged & Disabled 10% Non-Dual Spending 60% Duals 15% Duals 15% Long-Term Care 27% Dual Spending 40% Children 50% Total = 58 Million Total = $311 Billion SOURCE: Urban Institute estimates based on data from MSIS and CMS Form 64, prepared for the Kaiser Commission on Medicaid and the Uninsured, 2010.

7. Medicaid Expenditures by Service, 2009 Disproportionate Share Hospital Payments 5% Inpatient 14% Home Health and Personal Care 14% Physician/ Lab/ X-ray 4% Mental Health 1% Outpatient/Clinic 7% Acute Care 62% Long-Term Care 33% ICF/MR* 4% Drugs 4% Nursing Facilities 14% Other Acute 8% Payments to Medicare 3% Payments to Managed Care Organizations 21% Total = $366.5 billion *Intermediate Care Facilities for Persons with Mental Retardation NOTE: Total may not add to 100% due to rounding. Excludes administrative spending, adjustments and payments to the territories. SOURCE: Urban Institute estimates based on data from CMS (Form 64), prepared for the Kaiser Commission on Medicaid and the Uninsured.

8. Mandatory and Optional Medicaid Benefits Mandatory Benefits Optional Benefits • Physician services • Laboratory and x-ray services • Inpatient hospital services • Outpatient hospital services • Early and periodic screening, diagnostic, and treatment (EPSDT) services for individuals <age 21 • Family planning services • Rural and federally-qualified health center (FQHC) services • Nurse midwife services • Nursing facility services for individuals >age 21 • Home health care services for individuals entitled to nursing facility care • Smoking cessation services for pregnant women* • Free-standing birth center services * • Prescription drugs • Clinic services • Dental services, dentures • Physical therapy and rehab services • Prosthetic devices, eyeglasses • Primary care case management • Intermediate care facilities for the mentally retarded (ICF/MR) services • Inpatient psychiatric care for individuals <age 21 • Home health care and other services provided under home and community-based waivers • Personal care services • Hospice services • ‘Health home’ services for individuals with chronic conditions * • Home and community-based attendant services and supports* *Benefit classification established by the Patient Protection and Affordable Care Act (ACA) on March 23, 2010. NOTE: As of August 2011.

9. Median Medicaid/CHIP Eligibility Thresholds, January 2011 Part 1 Minimum Medicaid Eligibility under Health Reform 133% FPL ($24,353 for a family of 3 in 2010) SOURCE: Based on the results of a national survey conducted by the Kaiser Commission on Medicaid and the Uninsured and the Georgetown University Center for Children and Families, 2011

10. Median Medicaid/CHIP Eligibility Thresholds, January 2011 Part 2 • The ACA establishes a national eligibility standard for Medicaid at 133% FPL beginning in 2014 • This will increase coverage for many parents and adults without dependent children • ACA requires states to streamline and simplify the Medicaid enrollment process and coordinate eligibility SOURCE: Based on the results of a national survey conducted by the Kaiser Commission on Medicaid and the Uninsured and the Georgetown University Center for Children and Families, 2011

11. Medicaid Eligibility for Working Parents by Poverty Level, 2011 ME VT WA NH MT ND MN OR MA NY WI SD ID MI RI CT WY PA NJ IA NE OH DE IN IL NV MD CO UT WV DC VA CA KS MO KY NC TN AZ SC OK AR NM GA AL MS LA LA TX FL AK HI <50% FPL (16 states) 50% - 99% FPL (17 states) 100% FPL or Greater (17 states including DC) NOTE: The federal poverty level (FPL) for a family of three in 2011 is $18,530 per year. Several states also offer coverage with a benefit package that is more limited than Medicaid at higher income levels. SOURCE: Kaiser/Georgetown Medicaid Eligibility and Enrollment Survey, 2011.

12. Medicaid Beneficiaries Have Access Comparable to Private Insurance and Experience Fewer Barriers to Care Than the Uninsured PercentReporting: Adults Children Adults Children No Usual Source of Care Needed Care but Did Not Get It Due to Cost * *In the past 12 months NOTE: Respondents who said usual source of care was the emergency room were included among those not having a usual source of care SOURCE: KCMU analysis of 2008 NHIS data

13. Most Medicaid Enrollees Receive Care Through Managed Care Arrangements ME VT WA NH MT ND MN OR MA NY WI SD ID MI RI CT WY PA NJ IA NE OH DE IN IL NV MD CO UT WV VA CA DC KS MO KY NC TN AZ SC OK AR NM GA AL MS LA TX AK FL HI 0% - 50% (9 states) 51% - 65% (15 states) 66% - 80% (18 states including DC) U.S. Overall = 66% of Medicaid enrollees 80%+ (9 states) NOTE: Data as of October 2010. Includes enrollment in MCOs and PCCMs. SOURCE: Smith, V. et al. A Profile of Medicaid Managed Care Programs in 2010: Findings from a 50-State Survey. Kaiser Commission on Medicaid and the Uninsured, September 2011.

14. Medicaid is Financed by States and the Federal Government (Federal Medical Assistance Percentages (FMAP), FY 2012) ME WA VT NH MT ND MN OR MA NY WI SD ID MI RI WY CT PA IA NJ NE OH DE IN IL NV MD CO UT WV VA CA DC KS MO KY NC TN AZ SC OK AR NM GA AL MS LA TX FL AK 50 percent (15 states) HI 51 – 59 percent (11 states) 60 – 66 percent (13 states) 67 – 74 percent (12 states including DC) NOTE: Rates are rounded to nearest percent. These rates will be in effect Oct. 1, 2011 – Sept. 30, 2012. SOURCE: Federal Register, Nov 10, 2010 (Vol. 75, No. 217), pp. 69082-69083. http://edocket.access.gpo.gov/2010/pdf/2010-28319.pdf

15. Medicaid is a Budget Item and a Revenue Item in State Budgets Elementary & Secondary Education Medicaid All Other $1,547 Billion $457 Billion $656 Billion SOURCE: National Association of State Budget Officers, 2009 State Expenditure Report, Dec. 2010

16. Percent Change in Total Medicaid Spending and Enrollment, FY 1998 – FY 2012 NOTE: Enrollment percentage changes from June to June of each year. Spending growth percentages in state fiscal year. SOURCE: Moving Ahead Amid Fiscal Challenges: A Look at Medicaid Spending, Coverage and Policy Trends. KCMU, http://www.kff.org/medicaid/8248.cfm

17. Medicaid spending growth per enrollee has been slower than growth in private health spending SOURCE: Urban Institute, 2010. Estimates based on data from Medicaid Financial Management Reports (HCFA/CMS Form 64), Medicaid Statistical Information System (MSIS), and KCMU/HMA enrollment data. Expenditures exclude prescription drug spending for dual eligibles to remove the effect of their transition to Medicare Part D in 2006.

18. Expanding Medicaid is a Key Element in Health Reform Universal Coverage Employer-Sponsored Coverage Exchanges (subsidies 133-400% FPL) Individual Mandate Health Insurance Market Reforms Medicaid Coverage (up to 133% FPL) Note: In 2009, 133% FPL for family of 4 is $29,327 and 400% FPL is $88,200

19. Medicaid Today and Tomorrow Minimum Floor for Health Insurance Coverage to 133% FPL Health Insurance Coverage for Certain Categories Additional Federal Financing for Coverage MEDICAID Shared Financing States and Federal Govt. Additional Options Long-Term Care / Coordination for Duals Support for Health Care System Assistance for Duals / Long-Term Care

20. Summary and Outlook • Critical lifeline to care for 60 million low-income and high-needs Americans • Foundation for new coverage for low-income individuals under health reform • Challenges • States still struggling from the effects of the Great Recession, so pressure to control Medicaid spending persists • Federal deficit reduction efforts could have implications for Medicaid and states • States face tight timelines and have limited staff to prepare for the implementation of health reform • Opportunities • States implementing new payment and delivery system reforms (particularly for dual eligibles) designed to better serve beneficiaries and reduce costs • Health reform presents opportunities to significantly reduce the number of uninsured

21. For more information… • Kaiser Commission for Medicaid and the Uninsured • http://www.kff.org/about/kcmu.cfm • Centers for Medicare & Medicaid Services • www.cms.gov • Medicaid and CHIP Payment and Access Commission • www.macpac.gov • Center on Budget and Policy Priorities • www.cbpp.org • The Commonwealth Fund • www.commonwealthfund.org • National Association of State Medicaid Directors • www.nasmd.org