Medicaid

Recuerdas que... Medicaid is the final layer of the “three-layer cake” that was signed into law by President Johnson in 1965 The other two layers are Medicare Part A and B

The Structure of Medicaid: Government Medicaid is a joint federal government-state government program This means that state participation is voluntary and cannot be coerced (like the Medicaid expansion under the ACA--some states participated and some did not) All 50 states signed up by 1982 Overseen at the national level by the CMS (Centers for Medicaid Services) Sets what is known as the FMAP for each state (Federal Medical Assistance Percentage, also known as the Match Rate--no, not that Match rate….) which reimburses states for their Medicaid expenses based on poverty rates within the states State governments offer a set of Medicaid benefits to all beneficiaries and are free to offer more if they wish

Structure: Medicaid Managed Care You can think of these as states outsourcing their Medicaid enrollees to private insurers States tend to put low-income families and children on these plans rather than the elderly, disabled, etc. (Senior citizens would be pissed at any change and they vote a lot) Historically good at getting patients to go to the same primary care doctor However they often have very strict provider networks “If you like your doctor, you can keep him or her” ACA sent more Medicaid recipients to these type of plans (certainly not the typical liberal Democrat proposal) Cost-effectiveness is debated as well as if they improve health outcomes of patients

Structure: Coverage Covers outpatient and inpatient services, ER, maternity benefits (crucially important in this sector), and long-term care costs for its recipients States are also free to offer prescription drug coverage (all 50 + D.C. do now; the growth of prescription drug coverage has been a crucial development in Medicare and Medicaid over the past couple decades), dental and vision coverage (of variable quality), and reimbursement for medical device costs (I may get back to this later….) Copays are allowed to be up to 5% of income Uniquely covers medical transportation as a lot of Medicaid recipients have chronic illnesses, disabilities, etc. that can require frequent care

Who Gets Medicaid Coverage? Question is not easy to answer thanks to different state guidelines & whether or not a state expanded Medicaid under the ACA (It’s all lost in the sauce) Prior to the ACA: Pregnant women (Medicaid pays for almost 50% of all U.S. births) Low and middle-income children (under 19, covers about 40% of all kids) Poor elderly and disabled people (largest nursing home payer) NOT all people below a certain perception of the federal poverty line Have to be a U.S. citizen or legal permanent resident (green card) Variable Eligibility: WHERE YOU LIVE MAKES A DIFFERENCE Low income-parents with children (ex. Texas covers parents only up to 26% of Federal Poverty Level while New York covers up to 150% of FPL) → a state’s policy here correlates directly w/uninsured levels Non-elderly disabled Childless adults (even if you had zero income)

Eligibility Changes: SCHIP and ACA SCHIP (State Children’s Insurance Program) was passed in 1997 after “Hillarycare” failed Extended Medicaid eligibility for children to some previously just above the designated federal poverty line percentage ACA (Affordable Care Act) Raised the eligibility level for benefits to 133% of the federal poverty line (SCOTUS in King v. Burwell ruled that the federal government could not force states like Texas to adhere to this standard) Extended eligibility for the so-called “childless adults” Point was to hopefully get more healthy low-income people on the Medicaid rolls so that per-person spending would decrease (It kind of has? But is it a success? Depends on who you ask…) NOTE FOR THE FUTURE: If you know Romneycare, you know the ACA/Obamacare

How is it Paid For? Taxes Citizens pay both state and federal taxes States then pay for the costs of their Medicaid recipients and are then reimbursed by the FMAP Reimbursement is divested to providers and not patients directly “Present your Medicaid card to the pharmacist and the bill gets sent to the state.” (This is called fee- for-service medicine) Medicaid is the fastest-growing benefit on the rolls of state budgets (gets back to the cost sustainability issue discussed in previous Medicare presentations)

Some Possible Cost Solutions Managed Care (“evidence that it saves money is equivocal, but states are optimistic”) Cutting benefits Requiring cost-sharing among states Cutting provider reimbursement (controversial because rates are already so low in some states that some private physicians have started turning away Medicaid patients) “Payment reform and care delivery design” (paying for good care and better outcomes rather than amount of procedures or tests performed) Give states “Block Grants” (lump sum of money) directly to states instead of reimbursing 50-75% for eligible services (shifts burden of saving money to states) Paul Ryan “A Better Way” Plan

Some Overarching Observations It’s hard to call Medicare and Medicaid a cohesive system Single-payer components (Medicare A and B) mixed with dual state-federal components (Medicaid) and private components (Medicare C, D, HMOs/PPOs, and Medicaid Managed Care) There are definitely competing incentives (profit, patient outcomes, limiting spending, etc.); could this competition be causing the current chaos in our system? You can often predict political party affiliation by seeing which cost-slowing solutions one prefers Democrats: Eligibility expansions to more healthy populations to balance costs (immigration expansion related to this), cost-sharing among states, in general more “federal” solutions Republicans: Block grants, privatization, in general more “state and free market” solutions Bipartisan (Kinda?): Focusing on health outcomes rather than number of procedures NO ONE WANTS TO DO THESE: Benefit cuts, provider reimbursement cuts

Medical School Interview Questions! How would you go about improving access to health care in this country? What are your views on the latest changes to the Medicare program? Do physicians have the right to deny care to patients on Medicaid? What do you think should be done to control health care costs in this country?