K A I S E R C O M M I S S I O N O N Medicaid and the Uninsured Figure 0 Medicaid: The Basics Diane Rowland, Sc.D. Executive Director Kaiser Commission.

K A I S E R C O M M I S S I O N O N

Medicaid and the Uninsured

Figure 1

Medicaid: The Basics

Diane Rowland, Sc.D.

Executive Director

Kaiser Commission on Medicaid and the Uninsured

and

Executive Vice President Kaiser Family Foundation

June 2005KaiserEDU.org Tutorial



Figure 2

Medicaid’s Origin

• Enacted in 1965 as companion legislation to Medicare (Title XIX)

• Established an entitlement

• Provided federal matching grants to states to finance care

• Focused on the welfare population: – Single parents with dependent children– Aged, blind, disabled

• Included mandatory services and gave states options for broader coverage



Figure 3

Medicaid Today

• Medicaid provides health and long-term care coverage for over 52 million low-income people:

– Comprehensive, low-cost health coverage for 39 million people in low-income families

– Acute and long-term care coverage for over 13 million elderly and persons with disabilities, including over 6 million Medicare beneficiaries

• Guarantees entitlement to individuals and federal financing to states

• Federal and state expenditures of $300 billion—with federal government funding 57%

• Pays for nearly 1 in 5 health care dollars and 1 in 2 nursing home dollars



Figure 4

Medicaid’s Role for Selected Populations

Note: “Poor” is defined as living below the federal poverty level - $14,680 for a family of three in 2003. SOURCE: KCMU, KFF, and Urban Institute estimates; Birth data: NGA, MCH Update.

60%

44%

19%

50%

18%

20%

26%

40%

37%

21%

Percent with Medicaid Coverage:

Families

Aged & Disabled

Poor

Near Poor

All Children

Low-Income Children

Low-Income Adults

Births (Pregnant Women)

Medicare BeneficiariesPeople with Severe Disabilities

People Living with HIV/AIDS

Nursing Home Residents



Figure 5

Minimum Medicaid Eligibility Levels, 2004

133%133%

100%

42%

74%

0%0%

100%

200%

PregnantWomen

Pre-SchoolChildren

School-Age

Children

Parents Elderly andIndividuals

withDisabilities

ChildlessAdults

Note: The federal poverty level was $9,310 for a single person and $15,670 for a family of three in 2004. SOURCE: Cohen Ross and Cox, 2004 and KCMU, Medicaid Resource Book, 2002.

Income eligibility levels as a percent of the Federal Poverty Level:



Figure 6

Medicaid 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 under 21

• Family planning

• Rural and federally-qualified health center (FQHC) services

• Nurse midwife services

• Nursing facility (NF) services for individuals 21 or over

• 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 under 21

• Home health care services

• Personal care services

• Hospice services

“Mandatory” Items and Services “Optional” Items and Services



Figure 7

Medicaid Expenditures by Service, 2003

Total = $266.1 billionSOURCE: Urban Institute estimates based on data from CMS (Form 64), prepared for KCMU.

Inpatient Hospital 13.6%

Physician/ Lab/ X-ray 3.7%

Outpatient/Clinic 6.7%

Drugs 10.0%

Other Acute 6.3%

Payments to MCOs 15.6%

Nursing Facilities 16.8%

ICF/MR 4.4%

Mental Health 1.8%

Home Health and Personal Care 13.0%

Payments to Medicare 2.3%

DSH Payments5.4%

AcuteCare

58.2%

Long-TermCare

36.0%



Figure 8

Enrollees Expenditures

Medicaid Enrollees and Expendituresby Enrollment Group, 2003

Note: Total expenditures on benefits excludes DSH payments. SOURCE: KCMU estimates based on CBO and OMB data, 2004.

Children 19%

Elderly26%

Disabled43%

Adults 12%Children

48%

Elderly9%

Disabled16%

Adults27%

Total = 52.4 million Total = $252 billion



Figure 9

Medicaid Payments Per Enrolleeby Acute and Long-Term Care, 2003

Children Adults Disabled Elderly

$1,700 $1,900

$12,300 $12,800

SOURCE: KCMU estimates based on CBO and Urban Institute data, 2004.

Long-TermCare

AcuteCare



Figure 10

Federal Medical Assistance Percentages (FMAP), FY 2005

50 percent (13 states)

61 to <71 percent (15 states & DC)

51 to <61 percent (13 states)

71 + percent (9 states)

SOURCE: Federal Register, December 3, 2003



Figure 11

16%

28%

16%

37%

40%

61%

43%

26%

51%

20%

42%

16%

40%

46%

33%

43%

17%

23%

Medicaid/Other Public Employer/Other Private Uninsured

Poor

Near-Poor(<100% Poverty)

(100-199% Poverty)

Poor


(100-199% Poverty)

Poor


(100-199% Poverty)

Children

Parents

Adults without children

Note: Medicaid/Other Public includes SCHIP and other state programs, Medicare, and military-related coverage. The federal poverty level was $14,680 for a family of three in 2003. SOURCE: KCMU and Urban Institute analysis of March 2004 Current Population Survey.

Medicaid’s Role for Children and Adults, 2003



Figure 12

Medicaid’s Impact on Access to Health Care

13%16%

6%7%

20%

5%

30%

41%

24%

Medicaid Private UninsuredPercent Reporting

Did Not ReceiveNeeded Care

No Pap Test in Past Two Years

No Regular Source of Care

Adults Women Children

SOURCES: The 1997 Kaiser/Commonwealth National Survey of Health Insurance; Kaiser Women’s Health Survey, 2004; Dubay and Kenney, Health Affairs, 2001.



Figure 13

Medicaid Enrollees are Poorer and Sicker Than The Low-Income Privately Insured Population

61%

48%

69%

16% 15%

27%

0%

25%

50%

75%

100%

Percent of Enrolled Adults:

Poor Health Conditions that limit work

Fair or Poor Health

SOURCE: Coughlin et. al, 2004 based on a 2002 NSAF analysis for KCMU.

Medicaid Low-Income andPrivately Insured



Figure 14

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.



Figure 15

Other Medicare

Beneficiaries32.4 Million

82%

Full Dual Eligibles

6.1 Million 15%

Partial DualEligibles

1.1 Million 3%

Total Medicare Beneficiaries = 40 million

SOURCE: KCMU estimates based on CMS data and Urban Institute analysis of data from MSIS.

Total Duals =

7.2 million

Medicaid Status of Medicare Beneficiaries, FFY 2002



Figure 16

Medicaid Eligibility & Benefits for Medicare Beneficiaries, 2005

Pathway Income Eligibility

Asset LimitIndividual/Couple

Medicaid Benefits

Medicare Premiums & Cost-sharing

SSI Cash Assistance

< 74% of poverty(SSI income eligibility)

$2,000$3,000

X X

Qualified Medicare Beneficiary (QMB)

< 100% of poverty $4,000$6,000

X

Specified

Low-Income Beneficiary (SLMB)

100-120% of poverty

$4,000$6,000

Premium only

Mandatory Populations



Figure 17

Medicaid Eligibility & Benefits for Medicare Beneficiaries, 2005(cont’d)

Pathway Income Eligibility

Asset LimitIndividual/ Couple

Medicaid Benefits

Medicare Premiums & Cost-sharing

Medically Needy

Individuals who spend income down to a specified level

$2,000$3,000

X* X

Poverty Level < 100% of poverty $2,000$3,000

X X

Special Income Rule for Nursing Home Residents

Institutionalized

individuals with

income < 300%

of the SSI level

$2,000$3,000

X X

HCBS Waivers

Must be eligible for institutional care X X

Optional Populations

*Medicaid benefits may be more limited than for SSI.



Figure 18

14%

24%

28%

22%

52%

11%

24%

13%

2%

9%

17%

71%

Stroke

Diabetes

MentalDisorders

Reside in LTCFacility

Income Below$10,000

Fair/Poor HealthStatus*

Dual Enrollees (MedicareBeneficiaries with Medicaid - 7.2 m)

Other Medicare Beneficiaries (32.4 m)

Dual Enrollees are Poorer and Sicker ThanOther Medicare Beneficiaries

*Community-residing individuals only.SOURCE: KCMU estimates based on analysis of MCBS Cost & Use 2000.



Figure 19

Spending on Dual Eligibles as a Share of Medicaid Spending on Benefits, FY2002

Total Spending on Benefits = $232.8 Billion

SOURCE: Urban Institute estimates prepared for KCMU based on an analysis of 2000 MSIS data applied to CMS-64 FY2002 data.

Spending on Dual Eligibles

42%

Prescription Drugs

($13.4 Billion)

Non-Prescription ($82.7 Billion)

Spending on Other Groups ($136.7 Billion)

36%

59%

6%



Figure 20

National Spending on Nursing Home and Home Health Care, 2003

Total = $110.8 billion

SOURCE: CMS, National Health Accounts, 2005.

Total = $40 billion

Nursing Home Care Home Health Care

Medicaid 46%

Medicare 12%

Out-of-Pocket

28%

Private Insurance

8%

Other 6%

Medicaid 25%

Medicare 32%

Out-of-Pocket

17%

Private Insurance

21%

Other 5%



Figure 21

Growth in Medicaid Long-Term Care Expenditures, 1991-2003

1991 1996 2001 2002 2003

$34

$52

$75

86% 79% 71%

SOURCE: Burwell et al. 2004, HCFA-64 data.

In Billions:

14%

21%

29%31%

69%

$82 $84

33%

67%

Home & community-based care

Institutional



Figure 22

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).



Figure 23

Growing Pressure on Government Spending

Medicaid17%

Public Assistance

2%Higher

Education12%

K-12 Education

35%

All Other34%

SOURCE: CBO, Baseline Budget Outlook, January 2005; National Association of State Budget Officers, 2003 State Expenditure Report, 2004.

State General Fund Spending

Total = $499 BillionTotal = $2.3 Trillion

Federal Outlays

Medicaid/ SCHIP

7%

Net Interest7%

Nondefense Discretionary

18%

Defense Discretionary

19%

Social Security

21%

Medicare12%

Other16%



Figure 24

What’s at Stake in Medicaid Reform

Health Insurance Coverage

25 million children and 14 million adults in low-

income families; 6 million persons with disabilities

State Capacity for Health Coverage

43% of federal funds to states

MEDICAID

Support for Health Care System

17% of national health spending

Assistance to Medicare

Beneficiaries

7 million aged and disabled — 18% of

Medicare beneficiaries

Long-Term Care Assistance

1 million nursing home residents; 43% of long-

term care services

K A I S E R C O M M I S S I O N O N Medicaid and the Uninsured Figure 0 Medicaid: The Basics Diane Rowland, Sc.D. Executive Director Kaiser Commission.

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