Medicaid As a Platform for Health Reform Barbara Lyons, Ph.D. Vice President and Deputy Director Kaiser Commission on Medicaid and the Uninsured Henry J. Kaiser Family Foundation for Health Access and Coverage Panel Washington DC Health Policy Seminar University of St. Thomas, Opus College of Business April 21, 2009

Medicaid’s Role Today MEDICAID Health Insurance Coverage 29.5 million children & 15 million adults in low-income families; 14 million elderly and persons with disabilities Assistance to Medicare Beneficiaries 8.8 million aged and disabled — 19% of Medicare beneficiaries Long-Term Care Assistance 1 million nursing home residents; 2.8 million community-based residents MEDICAID HI Coverage data from FY 2004….MSIS Duals—2003, based on MSIS and Medicare State Enrollment data from CMS LTC assistance—NH residents from SHFO; Support for System and % of LTC services from Natl Health Expendure data released January 2009. State Capacity—for 2006, source: NASBO, fall 2007 state expenditure report Support for Health Care System and Safety-net 16% of national health spending; 40% of long-term care services; about 1/3rd of CHC and public hospital revenues State Capacity for Health Coverage Federal share ranges 50% to 76%; 44% of all federal funds to states

Percent of Nonelderly Residents Covered by Medicaid, 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 <10%: NH, NV, VA, NJ, CO, ND, MD, NE (8 states) 10-12%: WY, UT, FL, HI, MN, DE, SD, IL, IN, OR, ID, AK (12 states) 13-15%: CT, MT, TX, WI, PA, IA, MO, GA, NC, OH, OK, SC, MI, AL, WA, KS (16 states) >15%: AR, CA, TN, WV, AZ, NM, RI, MS, NY, ME, VT, DC, LA, KY, MA (15 states plus DC) AK FL HI >15% (15 states including DC) 13-15% (16 states) US Average = 13% 10-12% (12 states) < 10% (8 states) SOURCE: Urban Institute and KCMU analysis of the March 2006 and 2007 Current Population Survey. Two-year pooled estimates for states and the US (2006-2007).

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.

Medicaid As a Logical Building Block to Broaden Coverage

Health Insurance Coverage of the Total Population, 2007 Total = 298.2 million SOURCE: KCMU and Urban Institute analysis of March 2008 CPS.

Health Insurance Coverage of the Nonelderly by Poverty Level, 2007 The federal poverty level (FPL) was $21,203 for a family of four in 2007. Data may not total 100% due to rounding. SOURCE: KCMU/Urban Institute analysis of March 2008 CPS.

Over Half the Nonelderly Uninsured are Low-Income Adults Nonelderly uninsured by age and income groups, 2007: Other Adults without Children 21% Total = 45.0 Million Uninsured Low-income defined as those with family incomes less than 200% of the federal poverty level. Nonelderly includes <age 65. SOURCE: KCMU/Urban Institute analysis of 2008 ASEC Supplement to the CPS

Children’s Eligibility for Medicaid/CHIP by Income, January 2009 NH VT WA ME MT ND MA MN OR NY ID SD WI MI RI WY CT PA IA IL NJ NE OH IN NV IL WV DE UT VA CO MD CA KS MO KY NC DC TN OK SC AR AZ NM AL GA MS TX LA IMPLEMENTED: <200% FPL: AK (175), OR (185), ID (185), MT (133), ND (140), NE (185), OK (185) – 7 states 200% - 250% FPL: AL (200), AZ (200), AR (200), DE (200), FL (200), IL (200), IA (200), KS (200), KY (200), ME (200), MI (200), MS (200), NV (200), NC (200), OH (200), SC (200), SD (200), TX (200), UT (200), VA (200), WY (200), CO (205), WV (220), GA (235), NM (235), CA (250), IN (250), LA (250), NY (250), RI (250), TN (250), WA (250), WI (250) >250% FPL: MN (280), CT (300), DC (300), HI (300), MD (300), MA (300), MO (300), NH (300), PA (300), VT (300), NJ (350) AK FL HI < 200% FPL (7 states) 200-250% FPL (33 states) *The Federal Poverty Line (FPL) for a family of three in 2008 is $17,600 per year. ***IL uses state funds to cover children above 200% FPL.; MA uses state funds to cover children above 300% FPL; NY uses state funds to cover children from 250% to 400% FPL; WI uses state funds to cover children from 250% to 300% FPL. SOURCE: KCMU/CBPP annual survey of state eligibility and enrollment policies, 2009. >250% FPL (11 states including DC)

Views of Public Coverage Among Low-Income Parents with an Uninsured Child Medicaid/SCHIP a good program* Parent would enroll child if eligible for public coverage *Based on those who have heard of Medicaid/SCHIP SOURCE: Kaiser Survey of Children’s Health Coverage, 2007.

Median Medicaid/SCHIP Income Eligibility Thresholds, 2008 Federal Poverty Line (For a family of four is $21,200 per year in 2008) SOURCE: KCMU/Urban Institute analysis of March 2008 CPS.

Medicaid Eligibility for Working Parents by Income, January 2009 NH VT WA ME MT ND MN MA OR NY ID SD WI MI RI WY CT PA IA NJ NE OH IN NV IL IL WV DE UT VA CO MD CA KS MO KY NC DC TN OK SC AR AZ NM AL GA MS TX LA <50% FPL: AL (25), AR (20%), ID (28), IN (26%), KS (34), LA (26), MS (46), MO (26), OK (48), PA (36), TX (27), VA (30), WV (34) 13 states 50-99% FPL: AK (85), CO (66), FL (55), GA (52), IA (86), KY (62), MI (66), MT (58), NE (58), NV (91), NH (51), NM (69), NC (51), ND (62), OH (90), SC (90), SD (54), UT (68), WA (77), WY (54): 20 states 100% or higher: AZ (200), CA (106), CT (191), DE (121), DC (207), HI (100), IL (185), ME (206), MD (116), MA (133), MN (275), NJ (200), NY (150), OR (100), RI (181), TN (134), VT (191), WI (200): 18 states AK FL HI 20-49% FPL (13 states) 50- 99% FPL (20 states) US Median Eligibility = 68% FPL: $11,968 per year > 100% FPL (18 states including DC) *The Federal Poverty Line (FPL) for a family of three in 2008 is $17,600 per year. SOURCE: Based on a national survey conducted by the Center on Budget and Policy Priorities for KCMU, 2009.

Options for Expanding Coverage Percent of registered voters who favor each way to expand coverage: Tax breaks to businesses Expanding Medicaid/ SCHIP Expanding Medicare Tax credits to people Employers pay or play Individual mandate Single government plan Note: Not exact wording of options Source: Kaiser Health Tracking Poll: Election 2008 (conducted Sep. 8 -13 , 2008).

How Can Medicaid be Strengthened in Health Reform?

Barriers to Health Care Among Low-Income Nonelderly Adults, by Insurance Status, 2007 * In the past 12 months 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 2007 NHIS data.

Samples adjusted for health differences Per Capita Spending For Medicaid Enrollees vs. Low-Income Privately-Insured Samples adjusted for health differences Adults Children SOURCE: Hadley and Holahan, “Is Health Care Spending Higher under Medicaid or Private Insurance? “ Inquiry, Winter 2003/2004.

Health Conditions that Limit Work Medicaid Enrollees are Poorer and Sicker Than the Low-Income Privately-Insured Percent of Enrolled Adults: Medicaid Low-Income and Privately Insured Poor Health Conditions that Limit Work Fair or Poor Health SOURCE: Coughlin et al, “Assessing Access to Care Under Medicaid: Evidence for the Nation and Thirteen States,” Health Affairs, July/August 2005.

Top 5% of Enrollees Accounted for More than Half of Medicaid Spending in 2004 Bottom 95% of Spenders Top 5% Bottom 95% of Spenders Children 3.5% Adults 1.6% Top 5% Disabled 29.2% 57% Children 0.3% Adults 0.2% 5% Disabled 2.3% Elderly 22.5% Elderly 2.2% Total = 57.4 million Total = $265.4 billion SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute estimates based on MSIS 2004.

More than One in Three Uninsured Low-Income Adults Reports a Mental or Physical Condition (<100% FPL) (100%-199% FPL) Adults includes all individuals age 19-64. “Physical condition” includes heart disease, hypertension, stroke, diabetes, pulmonary conditions and cancer or a malignancy. “Mental condition” includes ever being diagnosed with autism, bipolar, dementia, psychosis, schizophrenia and experiencing memory loss or depression in the past year. Source: KCMU analysis of 2007 NHIS data.

Strengthening Medicaid’s Protection for Low-income People Improve benefits and maintain cost-sharing limits Strengthen EPSDT for children Reduce benefit variability and gaps for adults Improve provider participation Set federal standards for Medicaid payment rates Link payments to performance and quality Utilize additional strategies (ease paperwork, expedite payments, develop workforce) Improve care strategies for complex populations Support community care

How Can Medicaid Financing Support Health Reform Goals?

Total Medicaid Spending Growth, FY 1996-2009 Economic Downturn, Enrollment & Cost Growth, 2000-2003 Health Care Cost Growth 1998-2000 Start Economic Recovery, Slower Enrollment Growth 2004-2006 Strong Economy, Welfare Reform, Enrollment Declines, Managed Care 1995-1998 Economic Downturn & Program Improvements 2008-2009 Adopted Rx Spending for Duals Moved From Medicaid to Part D & Low Enrollment Growth 2006-2007 NOTE: Estimates in State Fiscal Year. Figures for 2009 do not include CA . CA budget was adopted on 9/23/08 but spending projections for FY 2009 were not available. SOURCE: KCMU Analysis of CMS Form 64 Data for Historic Medicaid Growth Rates FY 2007, 2008 and 2009 based on KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, September 2008. Adopted

Federal Medical Assistance Percentages (FMAP), FY 2009 NH VT WA ME MT ND MN MA OR NY ID SD WI MI RI WY CT PA IA NJ NE OH IN NV IL IL WV DE UT VA CO VA MD CA KS MO KY NC DC TN OK SC AR AZ NM AL GA MS TX LA 50% minimum, 83% maximum (not counting any temporary “stimulus” bump AK FL HI 71+ percent (6 states) 62 to <71 percent (19 states including DC) 51 to <61 percent (12 states) 50 percent (14 states) SOURCE: Federal Register, November 28, 2007 (Vol. 72, No. 228), pp 67305-67306, at http://edocket.access.gpo.gov/2007/pdf/07-5847.pdf and correction for North Carolina at Federal Register, Friday, December 7, 2007 (Vol. 72, No. 235), p. 69285, at http://edocket.access.gpo.gov/2007/pdf/C7-5847.pdf.

Total Spending = $ 287.3 billion Spending on Dual Eligibles as a Share of Total Medicaid Spending, FFY 2005 Dual Spending46% Total Spending = $ 287.3 billion Note: Medicare acute includes acute care services that Medicare may already cover in whole or part. Source: Urban Institute estimates based on data from MSIS 2005 and CMS Form 64, prepared for the Kaiser Commission on Medicaid and the Uninsured, 2008.

Medicaid and Health Reform Today….. Medicaid is a cornerstone of coverage for 60 million low- income and disabled Americans Looking forward….. Building on Medicaid to reach the low-income uninsured is a practical and efficient strategy Strengthening Medicaid's focus on access and quality can be a key part of overall health reform Stabilizing and enhancing Medicaid financing supports national coverage goals Beyond health reform…. Medicaid serves key roles in financing long-term care, serving complex populations, and supporting safety net providers