PHA 308: Medicaid

Title XIX (1965): Grants to the States for Medical Assistance
Programs (Medicaid) of the Social Security Act was passed to provide
medical assistance to eligible needy Americans. Title XIX was expected
to be what?

a �stopgap� or temporary measure
until universal health insurance passed after a larger Democratic
majority with another Democratic presidential win in 1968

1968: Richard Nixon, a Republican, won the presidency; and the
______________________________________ stalled.

universal health insurance movement

True or False: Medicaid is not the largest source of funding for
health-related services to low-income Americans.

False

What did the Personal Responsibility and Work Opportunities Act of
1996 do?

removed automatic eligibility for individuals who received cash
welfare through Aid to Families with Dependent Children (AFDC)

What was the result of the Personal Responsibility and Work
Opportunities Act of 1996?

- Successfully cut link between Medicaid and cash welfare by
replacing AFDC with the Temporary Assistance for Needy
Families (TANF) program (TANF provides block grants to
states for time-limited cash assistance).- Allows families to
receive cash welfare for no more than five years; and allows states to
impose other requirements related to employment and education.

What is the Personal Responsibility and Work Opportunities Act of
1996 often referred to as?

Welfare Reform

Since Medicaid is a joint state-federal program, ________ have
flexibility to determine criteria within federal guidelines.

states

The 3 broad groups that may be covered by Medicaid

- Mandated categorically needy
- Optionally categorically needy
- Medically needy

Mandated Categorically Needy Criteria

- Families below a state-determined maximum limit on income and resources
- A child living with a parent or other relative that is deprived of
parental support or care due to death, absence, incapacity, or unemployment
- Individuals receiving cash assistance through the Social Security
Income (SSI) program below income and asset limits
- Pregnant women and children under the age of 6 below certain
income limits
- All children <19 in families below the federal poverty level
- Qualified Medicare Beneficiaries (QMBs) below certain income and
asset limits

Optionally Categorically Needy Criteria

- Determined by states
- Do not meet mandated requirements, but share certain
characteristics with the mandated categorically needy
- Must receive same benefits as the mandated group

Medically Needy Criteria

- Optional; determined by states
- Would be eligible in other two groups, except they exceed the
income or asset limits
- Medical expenses reduce �net� income to below the thresholds
(i.e., �spend-down�)
- Used mostly to grant eligibility to institutionalized persons who
incur extremely large medical expenses (e.g., nursing facility patients)
- If available, must also cover certain minors and pregnant women
that would be eligible, except they exceed the income or asset limits

States must operate Medicaid programs within broad guidelines, and
adhere to three general requirements:

- Statewideness � in effect throughout state without variation
- Freedom of choice � able to obtain covered services from any
qualifying provider
- Comparability of services � services equal for all beneficiaries

Under the SSA, CMS can grant two types of waivers:

- Section 1115
- Section 1915b

Section 1115

- 5-year demonstration waiver for innovative ideas- Must be
�budget-neutral� � does not increase costs, but increases eligibility
or provides new benefits- Mostly have been managed care demonstrations

Section 1915b

- Targets only current beneficiaries (will not expand
eligibility)- To implement managed care principles

Over ______ percent of Medicaid beneficiaries are enrolled in managed care.

60

True or False: Medicaid is actually an optional program; it is not
required of the states by the federal government.

True

Financing and Administration of Medicaid

- Federal and state governments share financing and administration �
CMS and a single agency in each state, which actually administers the program.
- States determine eligibility (other than those mandated), scope of
services, and provider payment rates.
- Administrative costs are split evenly.
- Providers must accept whatever amount Medicaid reimburses as
payment in full.

How is the federal portion of Medicaid program costs �
Federal Medical Assistance Percentage (FMAP) � determined?

by comparing a state�s average per capita income to the national
average; by law, max. 83%, min. 50%

Medicaid Required Services Covered

- Inpatient/outpatient hospital services- Physician
services- Rural health clinic services-
Federally-qualified health center services- Labs and
X-rays- Nursing facility services for individuals >21 years
old- Early and periodic screening, diagnosis, and treatment
(EPSDT) for individuals <21 years old- Family planning
services and supplies- Home health services for persons eligible
for skilled nursing services- Nurse-midwife services-
Certified pediatric and family nurse practitioner services-
Prenatal care

Medicaid Optional Services Covered

- Outpatient prescription drugs- Prosthetic devices-
Physical therapy- Rehabilitation therapy- Optometrist
services and eyeglasses- Services in an intermediate care
facility for the mentally retarded- Transportation
services- Home- and community-based care for certain persons
with chronic impairments

Medicaid Medically Needy Program Services

- Prenatal and delivery services for pregnant women
- Ambulatory services to individuals < age 18 and those entitled
to institutional services
- Home health services for those entitled to nursing facility services

Medicaid Cost Sharing

- Many states have recipients contribute to the cost of their health
care by deductibles, co-pays, or co-insurance.
- Cost sharing cannot be so great as to be a
barrier to needed services, however.
- Over 80% of states had copayments for outpatient
prescription drugs, but most ranged from $0.50-$3.00.
- Nursing home patients are expected to contribute most of their
income to help pay for their care.
- Cost sharing not allowed for emergency care,
family planning services, pregnancy-related services, and services
provided to those < age 18.

Medicaid beneficiaries: ~20% of the U.S. population (~60 million
people) at a cost of more than $400 billion annually. What is the
breakdown of expenditures?

- Children are 52%, but only 20% of expenditures- The blind and
disabled are 16%, but 45% of expenditures- The elderly are 8%,
but 22% of expenditures

Distribution of Medicaid payments by service:

- Nursing facilities � 11.6%- Inpatient hospital � 13.5%