The Role of Medicaid and the State Children’s Health Insurance Program in State Health Reform Jennifer Tolbert, Principal Policy Analyst Kaiser Commission on Medicaid and the Uninsured for National Congress on the Un and Underinsured September 23, 2008 Washington, DC

Number of Nonelderly Uninsured Americans, 2004 - 2007 Uninsured in Millions 46.5 44.4 45.0 43.0 The reasons we are focused on health care during this presidential election are twofold: the number of uninsured continues to rise and skyrocketing health care costs jeopardize coverage for many Americans, including those in the middle class. In 2006, 46.5 million people in the U.S. lacked health insurance, an increase of 2.2 million from 2005. In a disturbing trend, the number of uninsured children continued to rise. Importantly, over 70% of the increase in uninsured children occurred among children with family incomes between 200-400% FPL. SOURCE: KCMU/Urban Institute analysis of March CPS for each year.

Uninsured Rates Among the Nonelderly, by State, 2006-2007 NH VT ME WA MT ND MN MA OR NY ID SD WI MI RI WY CT PA IA NJ NE OH NE IN NV IL DE WV UT VA CO MD CA KS MO KY NC DC TN OK SC AR AZ NM GA MS AL TX LA TWO YEAR POOLED ESTIMATES FOR US RATE AK FL HI ≥ 18% (18 states) US Average = 18% 13-17% (19 states) < 13% (13 states & DC) SOURCE: Urban Institute and KCMU analysis of the March 2007 and 2008 Current Population Survey. Two-year pooled estimates for states and the US (2006-2007).

The Nonelderly Uninsured, by Age and Income Groups, 2007 Other Adults without Children 21% Total = 45.0 million uninsured Low-income includes those with family incomes less than 200% FPL. SOURCE: KCMU/Urban Institute analysis of March 2008 CPS.

Medicaid Today MEDICAID Health Insurance Coverage 29 million children & 15 million adults in low-income families; 14 million elderly and persons with disabilities Assistance to Medicare Beneficiaries 7.5 million aged and disabled — 18% of Medicare beneficiaries Long-Term Care Assistance 1 million nursing home residents; 43% of long-term care services MEDICAID Data in boxes may need to be updated—unsure of source. Support for Health Care System and Safety-net 15% of national health spending State Capacity for Health Coverage 43% of federal funds to states

Health Insurance Coverage of Low-Income Adults and Children, 2007 Poor Near-Poor (<100% Poverty) (100-199% Poverty) Children Poor Near-Poor Parents corrected near poor child data Adults without Children Poor Near-Poor SOURCE: KCMU/Urban Institute analysis of March 2008 CPS.

Medicaid Enrollees and Expenditures by Enrollment Group, 2005 Elderly 10% Elderly 28% Disabled 14% Adults 26% Disabled 42% Children 50% Adults 12% Children 18% Total = 59 million Total = $275 billion SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute estimates based on 2005 MSIS data.

Percentage of Children Without Health Insurance, By Poverty Level, 1997-2005 23% Children below 200% of poverty 21% 14% 6% Children above 200% of poverty 5% 5% * Survey method change in 2005 affects comparison with earlier years slightly. Children less than 18 years old. Source: L. Ku, “Medicaid: Improving Health, Saving Lives,” Center on Budget and Policy Priorities analysis of National Health Interview Survey data, August 2005.

The Uninsured by Income and Eligibility for Public Coverage, 2004 Not Eligible, 300%+ FPL 15% Not Eligible, 300%+ FPL 21% Eligible 14% Not Eligible, <300% FPL 11% Eligible 74% Not Eligible, <300% FPL 65% Children 8 Million Uninsured Adults 36.6 Million Uninsured *The Federal Poverty Line (FPL) for a family of three in 2004 is $15,067 per year SOURCE: Urban Institute analysis of 2005 CPS for KCMU.

Medicaid and SCHIP as Building Blocks Medicaid provides: Mechanism for expanding coverage to children and some adults Source of federal assistance through matching funds for increased coverage and provider payments Delivery system on which to build Additional financing vehicle through redirected DSH funds SCHIP provides: Successful model for covering children Enhanced federal financing, though amount is fixed

Challenges to Building on Medicaid and SCHIP Federal rules limit coverage options (childless adults excluded except with waiver) Budget neutrality requirements Partnership with federal government sometimes uncertain SCHIP Federal funding capped August 17th directive limited expansion efforts Reauthorization debate raises questions about future of program States must still raise matching funds

Medicaid and SCHIP Expansions for Children 25 states plus DC expanded eligibility for children Several states expanded eligibility up to 300% FPL Focus on outreach and simplifying enrollment processes Ten states enacted universal coverage for children Hawaii, Illinois, Iowa, Maine, Massachusetts, New Jersey, Pennsylvania, Vermont, Washington, Wisconsin Universal coverage builds on Medicaid/SCHIP coverage Full buy-in for families with higher incomes Connecticut: automatic enrollment of all uninsured newborns

Leveraging Medicaid/SCHIP to Expand Coverage for Adults Raising eligibility levels for parents (Maryland, New Jersey) Using/expanding waivers to cover childless adults (Wisconsin, Minnesota) Using Medicaid funding to purchase private insurance (Indiana, Vermont) Targeting small businesses (Oklahoma, New Mexico) New group insurance options for small employers Premium subsidies for low-income workers Financed with Medicaid funds

Using Medicaid to Address Other Health System Reforms Access to care medical homes model Chronic care management development of chronic care programs advancing HIT Quality improvement paying for performance non-payment for medical errors Focus on prevention, consumer responsibility

Massachusetts: Medicaid as Foundation for Broader Reform MassHealth Expanded eligibility for children up to 300% FPL Enrollment increase – 90,000 Commonwealth Care New public coverage option for adults up to 300% FPL Care provided by Medicaid managed care plans Financed with state and federal Medicaid funds Enrollment – 175,000 Other components Individual and employer mandates Commonwealth Connector

Public Programs and Health Reform Recent public program expansions show opportunities for gains in coverage States continuing to implement enacted expansions Poor fiscal outlook for states may limit future efforts Problems with health care system remain uninsured, rising health care costs, quality and access issues public programs offer states mechanism for addressing some of these problems Despite challenges to health reform, states are not waiting on federal action