Introduction and Overview

Transcription

1 Introduction and Overview The purpose of this primer is to help you understand the Medicaid program in Michigan and its role in today s health care system. Because they are both publicly funded and serve many of the same beneficiaries, the primer provides some general information about the Medicare program as well. The primer includes a brief history of the Medicare and Medicaid programs, a general explanation of Medicare program structure and requirements, information about how Medicaid is funded and administered, a discussion of the various categories of Medicaid eligibility, and an overview of services that are covered by Medicaid in Michigan. There is information regarding special health care programs for children and for the elderly and disabled, some available under the Medicaid umbrella and others under different authority. There is a section on the rights, responsibilities and protections afforded to Medicaid beneficiaries, a list of some of the advocacy organizations that assist Medicaid beneficiaries, and a glossary of key terms. The primer may not provide an answer for every situation that you might encounter related to the program but it will hopefully guide you to an individual or agency that might provide an answer for you. Before Medicare and Medicaid: A Brief History of Early Federal Initiatives The roots for Medicare and Medicaid go back at least to the beginning of the Twentieth Century, to early efforts to achieve health coverage for the elderly and the poor. Beginning in 1906, the American Association for Labor Legislation campaigned for over a decade for the adoption of worker compensation and sickness insurance. Interest in health reforms grew during this period but these efforts were suspended with the United States entry into World War I. Discussions about national health coverage again were part of the debate leading up to enactment of Social Security in 1935, but no health Health Management Associates 6

2 programs were included in the adopted version of the Social Security Act. In 1939, Senator Robert Wagner introduced the National Health Act of 1939, which would have created a compulsory health insurance program for almost all employees and their dependents in the country. The bill was fought vigorously by the American Medical Association and other interests and died in committee (Centers for Medicare and Medicaid Services, History of Medicare and Medicaid, 2002). During the 1940s, Congress held hearings on several health insurance bills, and in 1948 President Harry S. Truman became the first sitting president to officially endorse national health insurance. But enactment failed to follow, in part because the initiative was caught up in a wave of anti-communist opposition (Birn, Brown, Fee & Lear, 2003). Congress took a small but in retrospect a most significant step in 1950 when it created a grant program to provide federal matching funds to states for health care payments for individuals on welfare (Health Care Financing Administration, 2000). Building on this model, in 1960 Congress passed the Kerr-Mills Act that created the Medical Assistance for the Aged program. Kerr-Mills was the immediate predecessor to Medicaid. Like the Medicaid program that would follow, Kerr-Mills was an optional program for states, and participating states could receive federal matching funds when they made payments to physicians and other health care providers for services provided to elderly individuals receiving old age assistance, or certain individuals with incomes above public assistance levels (Health Care Financing Administration, 2000). However, Kerr-Mills was never regarded as completely successful. At its peak fewer than half the states participated, but Michigan was one of those states. Some states complained that the federal funds were not worth the effort required to comply with the federal rules. The debate intensified in the early 1960s, culminating in the adoption of several Great Society programs. In 1965, President Lyndon B. Johnson signed the Medicare and Medicaid Bill into law at the Truman Presidential Library in Independence, Missouri. Health Management Associates 7

3 Public Law amended the Social Security Act by adding Titles XVIII for Medicare and XIX for Medicaid (Centers for Medicare and Medicaid Services, History of Medicare and Medicaid, 2002). Former President Truman was present at the ceremony, and President Johnson presented him the first Medicare card in honor of his long-standing advocacy for national health coverage. Title XVIII created a hospital insurance program, called Medicare Part A, to cover most elderly individuals and a supplementary insurance program, called Medicare Part B, to cover certain other medical expenses, notably physician services. The Medicare program extended health coverage to almost all Americans aged 65 and older, and about 19 million beneficiaries enrolled in the first year (Centers for Medicare and Medicaid Services, Medicare Milestones, 2002). Title XIX established the Medical Assistance program, which became known as Medicaid. Title XIX expanded the Kerr-Mills Medical Assistance for the Aged program so it could help low-income elderly individuals with the cost of premiums, coinsurance and deductibles associated with the new Medicare program. It also provided additional medical coverage for low-income elderly individuals as well as medical care for the blind, the disabled, and families with dependent children. Medicare and Medicaid are Two Very Different Programs Federal funding helps pay for both Medicare and Medicaid. The Medicare program is an insurance program, supported in part by federal funds and in part by premiums paid by enrolled beneficiaries. It is administered by the federal Department of Health and Human Services Centers for Medicare and Medicaid Services (CMS) 1 through contracted fiscal intermediaries. It is a national program, meaning that coverage does not vary from state to state. It is an entitlement program, in the sense that every American 1 The CMS was created in 1977 (as the Health Care Financing Administration or HCFA) to administer both the Medicare and Medicaid programs. Health Management Associates 8

4 who meets the age or disability requirements qualifies. There is no income or resource (asset) test required to qualify for coverage. Unlike Medicare, Medicaid is a means-tested program. That is, to be eligible for Medicaid, every applicant must meet certain tests to assess whether the household has the means (income and resources/assets) to cover the cost of health care. Medicaid is also an entitlement program, in that a state cannot limit the number of persons it will cover under its program if they meet the established criteria for coverage. Medicaid is sometimes described as a joint state and federal partnership. The partnership means that both federal and state governments have important roles in Medicaid. The basic structure for Medicaid, including what a state must do and what it can do, is spelled out in federal law. Within that structure, states design and operate their Medicaid programs. The Medicaid program is funded by both state and federal dollars, with the federal share of spending an average of 57 percent. The state share, which includes local funds in some states, averages 43 percent. The proportion of funding provided by the federal government is called the Federal Medical Assistance Percentage (FMAP) in statute and is often called Federal Financial Participation (FFP) by state Medicaid agency staff. The formula for calculating the FMAP is specified in federal law. The FMAP percentage is related to the state s average personal income level relative to the national average personal income level. 2 Generally, states with more poor families receive a higher matching rate from the federal government. The federal government never contributes less than 50 percent or more than 83 percent of the dollars spent on Medicaid services in any state, no matter what the average personal income level is. 3 Currently, a dozen higher 2 Section 1905(b) of the Social Security Act, being 42 USC 1396d(b). 3 Current Federal Medical Assistance Percentages are available online at: Health Management Associates 9

5 income states are at the minimum FMAP of 50 percent, and about the same number have an FMAP of 70 percent or higher. Michigan s FMAP for fiscal year 2004 is percent and will rise to percent in fiscal year To alleviate some of the budget problems faced by states since 2001, Congress passed a temporary increase in the FMAP for five calendar quarters beginning in July This increase, in two pieces but producing a minimum bump of 2.95 percent in each state s FMAP through September 2004, was projected to generate an additional $317 million in federal funds for Michigan s Medicaid program. Health Management Associates 10