Understanding Medicaid

Understanding Medicaid: a program frequently mentioned in the health care debates. How familiar are you with the Medicaid program, who it covers, how it is funded, and why this is such a critical discussion for health care’s future in the United States?

Understanding Medicaid: What is it?

Created by President Lyndon B. Johnson, this federal government provides general programmatic guidelines and matching funds to states for costs associated with purchasing covered health services and program administration. There are 51 separate and distinct Medicaid programs (each state and D.C.). Participants must be in a defined low-income category or receiving Supplemental Security Income (SSI) benefits to qualify for coverage. It is currently the largest source of health coverage in the United States.

Understanding Medicaid:Who Is Eligible?

Federal law guarantees Medicaid coverage to pregnant women, children, elderly and disabled people with income levels at or below 133% of the federal poverty level.

Over 72.5 million people are currently covered by Medicaid; almost one in five Americans.

One third of children in the United States are covered by Medicaid through the CHIP program.

Two thirds of nursing home residents are eligible for Medicaid; many middle-class individuals having spent their savings on their medical care before becoming eligible for Medicaid.

States have the option of covering other groups, such as young adults up to the age of 26 who were once in foster care.

What is Expanded Medicaid?

This option became available through the passing of the Affordable Care Act. Adults with an income up to 138% of the defined federal poverty level, $16,643 in 2017, can participate in the expanded Medicaid program. Presently 31 states participate in this expanded program.

The federal government initially provided full financial coverage for the 11 million individuals who enrolled in Medicaid through the Affordable Care Act expansion of the program. This funding will decrease gradually to 90% of the costs of the expanded Medicaid program in 2020.

Understanding Medicaid: What are the financial considerations?

Medicaid currently accounts for 9% of federal domestic spending.

It is the largest source of federal funding to the states; usually a state’s second largest budget item after education.

Anyone who meets the eligibility rules has a right to Medicaid coverage.

The largest expenditures in the Medicaid program are for the elderly and the disabled because of their long-term nursing home stays and ongoing health care needs.

States are currently guaranteed open-ended financial support for their Medicaid programs from the federal government. (Hence the push to severely limit the federal government’s financial obligations with the recently proposed legislation.)

Understanding Medicaid:What changes are being proposed?

Federal funding of the Medicaid programs would be on a per-person limit, adjusted annually for inflation, rather than the current cost based and program administration formulas.

The Medicaid expansion program would be phased out by 2020, as the federal government reduces their financial support of this program. Those receiving  benefits through the expansion program would lose their health care coverage unless they are eligible under the traditional Medicaid guidelines.

What are the long-term effects?

It is estimated that up to 30 million individuals would lose their health care coverage under the most recent Senate Republican proposal. Hospitals will continue to treat these individuals, often in the Emergency Room, with those who do have insurance seeing increased prices for their care to cover these now uncovered costs.

Nursing homes will have to determine if they will be able to care for patients who lose their Medicaid coverage. This is a very low margin business. If there isn’t a family member to assume this care in their own homes, where are the elderly and disabled going to live and receive their required daily care?

Rural health care will continue to be more difficult to obtain. Small hospitals and clinics will close and health providers will likely choose to practice in geographic areas where the financial rewards are greater.

Our future, too

This is only an overview of a very complicated program. I encourage you to become familiar with the ongoing health care proposals and discussions. November’s open enrollment period for 2018 health insurance coverage is not that far away. The system seems to be getting more complicated, not easier, to navigate. Contact me with any specific questions you might have regarding your coverage or enrollment needs.

Finally, here are some recent articles on health care which I hope you find of interest.

Pre-existing condition concerns:     http://www.npr.org/sections/health-shots/2017/06/29/534753016/patients-with-pre-existing-conditions-fear-bias-under-gop-health

Trumpcare and women’s coverage:         https://shar.es/1Blrod

Malpractice proposed changes: http://click.et.npr.org/?qs=3edaa753431f7a9e4184a11d15c5f1f557472e3afa85f74bb9901441d3c6708f9e9bdbae28a82e09d195179dc9880ecebea64d9b1f1d337a200e7846c2294a99

Is compromise possible? https://shar.es/1TAcKs

 

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