The Center's work on 'Medicaid' Issues

Wisconsin’s Growing Cost of Not Adopting Medicaid Expansion

February 20, 2015 at 1:05 pm

Governor Scott Walker’s decision not to adopt health reform’s Medicaid expansion will cost the state $345 million in forgone budget savings over the next two fiscal years, the nonpartisan Legislative Fiscal Bureau estimates.  That’s $30 million more than the bureau estimated in August.  (The August report also estimated that adopting the expansion would have saved the state $206 million in the past two years.)

Under health reform, the federal government picks up 100 percent of the cost of expanding Medicaid through 2016 and at least 90 percent thereafter.  To receive this special matching rate, though, states have to expand Medicaid eligibility for adults up to 138 percent of the poverty line.

Governor Walker chose instead to extend Medicaid to adults only up to the poverty line through a separate waiver, so Wisconsin receives its regular matching rate, under which the federal government pays 58 percent of the cost of covering this population.  The $345 million in projected savings reflects the higher matching rate Wisconsin would receive by adopting the full expansion.

Other states also face forgone savings if they don’t adopt the Medicaid expansion this legislative session.  In Idaho, a workgroup put together by Governor Butch Otter estimates the expansion would save the state $173 million over the next ten years.  And in Alaska, Governor Bill Walker’s administration estimates the expansion would save the state $6 million next year.

Obama Budget Would Boost Medicaid, CHIP Enrollment for Children and Adults

February 4, 2015 at 9:00 am

President Obama’s fiscal year 2016 budget would wisely enable states to cut red tape and enroll more eligible children and adults in Medicaid and the Children’s Health Insurance Program (CHIP) by making permanent Express Lane Eligibility (ELE) for children and letting states extend Continuous Eligibility (CE) to adults.

ELE, which is slated to expire at the September 30 end of fiscal year 2015, gives states the option to use the information they’ve already collected and verified to establish eligibility in other programs such as SNAP (food stamps) to streamline enrollment of eligible children into Medicaid and CHIP.  ELE can boost enrollment and reduce administrative costs, according to a recent Government Accountability Office report and a federal evaluation by Mathematica Policy Research.

The President’s budget also proposes to let states provide continuous Medicaid coverage of up to 12 months to adults — which is already an option for children, and which about half of states take up in their Medicaid and/or CHIP programs.

In Medicaid, once individuals are found eligible, they must generally report any change that may affect their eligibility during the year and states must act on these changes.  That’s especially hard for Medicaid beneficiaries and state agencies because peoples’ incomes often fluctuate over the course of a year, sometimes even month to month. Thus, beneficiaries may have to switch back and forth between Medicaid and subsidized marketplace coverage under health reform, and they may experience coverage gaps if the paperwork proves overly burdensome and too difficult to complete.

Moving beneficiaries back and forth repeatedly between Medicaid and the marketplace is costly for state Medicaid agencies, for marketplaces, and for health plans, and it may cause disruptions in care for Medicaid beneficiaries.  As it has for children, continuous eligibility for adults would avoid this unnecessary paperwork and any resulting coverage gaps.

Indiana’s New Medicaid Waiver Requires Close Watch

February 3, 2015 at 3:37 pm

With Indiana becoming the 29th state to adopt health reform’s Medicaid expansion, we’re happy to see another state expand Medicaid (see map below) — but it remains to be seen whether Indiana will meet its coverage goals and whether enrollees will get the care they need.

The Department of Health and Human Services (HHS) last week approved the Healthy Indiana Plan (HIP) 2.0 Medicaid waiver, which the state expects will cover about 350,000 uninsured Hoosiers.  Last October, we wrote about several features of Indiana’s waiver proposal that could create barriers to coverage and care.  Unfortunately, not much changed in the final plan.

As extensive research shows, charging poor people premiums and co-payments keeps many from enrolling in coverage and getting needed medical care.  Yet under its new waiver, Indiana can require poor people to pay a monthly premium to get a benefit package that includes dental and vision care.

Even people with no income will have to pay $1 a month.  If they don’t, the state will shift them to a plan that lacks dental and vision care and imposes $4 copayments for doctor visits and prescriptions.

People at or slightly above the poverty line who don’t pay their premiums will lose coverage altogether and won’t be able to re-enroll for six months.

We’ll watch closely as Indiana reports on its progress to see if the HIP 2.0 premiums and co-pays have negative impacts.  HHS, too, should wait to see the results of HIP 2.0 before approving similar features in other Medicaid waivers.

Restoring Medicaid Payment Bump Would Improve Access to Care

February 3, 2015 at 2:21 pm

The President’s 2016 budget would reinstate health reform’s temporary boost in Medicaid payments for primary care services and extend it to more providers.  It’s a sound proposal, as new evidence shows the rate increase accomplished its goal of improving access to health care by encouraging providers to accept new Medicaid patients.

Medicaid enrollment has risen significantly since health reform’s coverage expansions took effect in January 2014.  Enrollment now tops 69 million — an increase of more than 10 million since October 2013, according to the Centers for Medicare & Medicaid Services.  To help ensure that both current and newly eligible Medicaid beneficiaries had access to care, health reform required states to boost Medicaid payment rates for certain primary care services to Medicare levels in 2013 and 2014, with the federal government picking up 100 percent of the added cost.

The rate increase worked.  A study recently published in the New England Journal of Medicine looked at appointment availability for new patients among primary care physician offices that participate in Medicaid in ten states.  The authors found that it was easier to obtain an appointment after the higher reimbursements took effect.  They also found that states with the largest increases in reimbursements tended to have the largest increases in appointment availability.

The President’s budget would reinstate the rate bump (which expired at the end of 2014) through 2016 and extend it to more practitioners who provide primary care services, including obstetricians, gynecologists, physician’s assistants, and nurse practitioners.  With more people than ever enrolled in Medicaid and the need for cost-effective Medicaid primary care rising across the country, the higher payment rates would help ensure that primary care providers now participating in Medicaid continue to do so.

Projected Health Spending Has Fallen Since 2010, Even With Health Reform’s Coverage Expansions

January 28, 2015 at 11:20 am

The Congressional Budget Office (CBO) now projects that federal health spending — including the costs of health reform’s coverage expansions — will be about $600 billion less over 2011-2020 than CBO projected in January 2010 without health reform (see figure).

In other words, projected health spending over the decade has fallen by $600 billion since 2010, despite $1 trillion in additional spending for premium tax credits and expanded Medicaid to help cover 27 million more Americans.

The decline in projected spending, which continues a pattern of downward revisions to CBO’s projections in recent years, stems from several factors.  One is health reform’s cuts in payments to Medicare providers and health plans.  Another is the recession, which has reduced the demand for health care services by slowing income growth.

But CBO and other experts have also concluded that a substantial part of the health care cost slowdown reflects structural changes in the health care system.  Professional associations, hospitals, and doctors are taking steps to curb costly and ineffective procedures and treatments.

CBO’s new report says, “Although views differ on how much of the slowdown is attributable to the recession and its aftermath and how much to other factors, the slower growth has been sufficiently broad and persistent to persuade [CBO and the Joint Committee on Taxation] to significantly lower their projections of federal health care spending.”

Health reform itself has most likely contributed to the slowdown as well.  As Kaiser Family Foundation President Drew Altman has written, “Even though its direct effects on system-wide costs may be limited so far, I believe Obamacare is having a significant indirect effect, although cause and effect and the magnitude are hard to prove. . . .  [It] is entirely likely that Obamacare has played and will continue to play a role in the slowdown in health-care cost growth and accelerating market change.”

To be sure, federal health spending — even if cost growth remains moderate — will keep rising as more baby boomers become eligible for Medicare and Medicaid.  Making the U.S. health care system more efficient thus remains a major budget challenge.  But CBO’s latest projections show that we’ve already made substantial progress.