Medicaid and SCHIP: Eligibility and Benefits

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1 Medicaid and SCHIP: Eligibility and Benefits Solving the Puzzle Judith D. Moore Senior Fellow National Health Policy Forum

2 Medicaid A Growing Program Medicaid - the largest health insurance program in the U.S.; 15.9 percent of the nation s total health spending of $1.9 trillion in $298 billion in 2004; 58 million people , Medicaid expenditures increased at a faster rate (65%) than private insurance (51%) and Medicare (45%) Covers 26 percent of all children in the U.S.; 8 percent of all non-elderly adults

3 Medicaid The Basics Jointly funded state-federal partnership State-administered within broad federal guidelines (CMS) No two state programs are alike Entitlement program open ended funding Comprises nearly 22 percent of the average state s budget; Medicaid is highest spender in most states

4 Medicaid Eligibility 25 Mandatory eligibility groups defined by the Medicaid statute Optional eligibility groups states may elect to cover Two-thirds of Medicaid spending is for optional groups More than 50 Eligibility groups in all.

5 The Federal Poverty Level The Federal Poverty Level (FPL) -- The amount of income to provide a bare minimum for food, clothing, transportation, shelter, and other necessities Updated annually by HHS and varies according to family size - 100% of the FPL is $20,650 for family of 4 in 2007 Many of the Medicaid eligibility groups are expressed as a percentage of the FPL (e.g. 133% of FPL).

6 Mandatory Eligibility -- Families and Children Children Under Age 19 with incomes up to 100% of the Federal Poverty Level ($17,170 for a family of three in 2007) Under age 6 with incomes below 133% of the FPL In Foster care or adoption assistance programs. Pregnant Women incomes below 133% FPL ($13, 613 family of 1, 2007)

7 Medicaid s Relationship with Welfare Pre-welfare reform automatically eligible for Medicaid if receiving cash welfare benefits Welfare reform (1996) TANF severed official eligibility link between welfare and Medicaid Now Eligible if would have been eligible under rules in effect in 1996 Allows states to cover families at higher incomes. Transitional Medical Assistance (TMA) up to 12 months eligibility while moving from welfare to work (incomes up to 185% FPL)

8 Medically Needy Medicaid serves many people who have extreme medical costs that can completely deplete income and assets. (e.g. nursing home, high hospital expenses) Eligibility calculated by deducting medical care costs from income. Allows individuals to spend down to Medicaid eligibility. 39 States have elected to cover medically needy individuals

9 Eligibility Aged and Disabled All elderly and disabled who qualify for SSI cash benefits Must meet the SSI disability definitions, inability to perform substantial gainful activity Elderly and disabled individuals who qualify as medically needy Disabled individuals who qualify based on income

10 Low-Income Medicare Beneficiaries Qualified Medicare Beneficiaries (QMBs) Medicaid pays all premiums and cost sharing for Medicare beneficiaries with incomes below 100% of the FPL (and limited resources) Specified Low-Income Medicare Beneficiaries (SLMBs) Medicaid pays the Medicare Part B premium for individuals with incomes up to 120% of the FPL and limited resources; and for some Qualifying Individuals (QIs) with incomes up to 135% of the FPL Qualified Disabled Working Individuals (QDWIs) Medicaid pays the Medicare Part A premium for certain disabled individuals with incomes below 200% of the FPL who have not worked long enough to be eligible for full Medicare benefits.

11 Optional Eligibility Groups 39 States have medically needy programs More than half of the states have expanded eligibility for pregnant women and infants to 185% of the FPL 41 states have expanded coverage for children up to at least 200% of the FPL ($34,340 for a family of three in 2007) When you ve seen one Medicaid program, you ve seen one Medicaid program.

12 Mandatory Benefits Services required for all mandatory eligibility groups: Inpatient and outpatient hospital services Physician services Medical and surgical Dental services Nursing facility services for age 21 or older (including home health services) Health clinic services Laboratory and X-ray services Pediatric/family nurse practitioner services Nurse-midwife services Family planning services and supplies EPSDT Early, Periodic Screening, Diagnosis and Treatment services for <age 21

13 Optional Benefits States also provide a range of optional services to both mandatory and optional groups, including: Prescription drugs (which all states cover) Other clinic services Nursing facility services for those under age 21 Services in an intermediate care facility for the mentally retarded (ICF/MR) Optometrist services/eye glasses Dental services Home and community-based services Assist individuals in need of long-term care services (e.g. case management, personal care services and adult day health services) to live in the community.

14 Cost Sharing Because of the limited disposable income of most Medicaid beneficiaries, traditional Medicaid has strict limits on cost sharing. No cost sharing for children and pregnant women Nominal (no more than $3) copayments for services provided to adults Some premiums, etc. permitted for optional populations (this approach has increased under waivers in recent years). Under DRA, States have new options regarding cost sharing based on beneficiary income level and some types of service

15 State Children s Health Insurance Program (SCHIP) Began in 1997, needs to be reauthorized by the end of this fiscal year (Sept. 30 th ). $39 billion over 10 years ( ) to states for coverage of uninsured low-income children Targeted children under age 19 with family incomes below 200% of the FPL Periodic financial shortfalls chip dip

16 SCHIP and Medicaid Medicaid: More than 58 million beneficiaries in 2004 More than $298 billion in combined state/federal expenditures in 2004 SCHIP: 6.6 million children served in 2006 $39 billion available over 10 years

17 SCHIP and Medicaid Differences SCHIP: Capped funding structure (with enhanced matching) Statutory flexibility with benefits/cost sharing Targeted at relatively low-cost child population More flexibility to control spending Politically popular bipartisan bill

18 Waivers Program Waivers: Home and community-based services 1915(c) Mandatory managed care programs 1915(b) Section 1115 Demonstrations: Long standing authority under SSA 1990s -- Statewide experimentation with financing mechanisms, managed care, coverage expansions 2000s - Health Insurance Flexibility and Accountability (HIFA) waivers permit limited benefits and increased cost sharing to pay for coverage expansions

19 Summary The Medicaid Program has three primary functions: Provide acute care for low-income children and families; Provide long-term care services for the elderly and the disabled; Provide Medicare cost sharing assistance for low-income elderly