Chapter 21 Medicaid

Chapter 21MedicaidChapter OutlineTHE WHAT’S, THE WHO’S AND THE HOW MUCH’SWHY MEDICAID COSTS SO MUCHMEDICAID AND THE ELDERLYThe What’sMedicaid covers health care for the poorwas established in 1964was in full force in 1967part of President Johnson’s Great Society Programspaired with Medicare (which covers health care for those over 65)is a state-administered program with federal matching funds.The Who’sCovers (1994)18 million children 18 million adults60% are female (75% of adults are women)45% white; 24% black; 17% Hispanic (11% “unknown”)Children are eligible ifthey are under 19 and in households with income less than 133% of the poverty rate.they are under 1 and in households with income less than 185% of the poverty rateAdults are eligible if they qualify forTANF (Temporary Aid to Needy Families)SSI (Supplemental Security Income)Not all poor are covered50% of those who live in households with income below 150% of the poverty line are not covered.The How Much’sThe federal government pays states a matching grant (ranging from 50% to 70%) that depends on the income of the state.The total federal government obligation is $120 billionThe total state obligation is $60 billionMore DetailsStates establish reimbursement rates for proceduresrates must be high enough so that patients have adequate coverage.States may choose to exclude some proceduresmost states choose not to cover abortions.Doctors and hospitals may choose not to accept Medicaid patientsIf they accept any patients for any procedure they must accept all patients for all procedures. It is an “all-or-nothing” proposition.Why Medicaid Costs So MuchPer patient expenditures per year on Medicaid are substantially higher (about 20%) than non-Medicaid patients.In part, this is a feature of the clientele The poor tend to be less healthy and need more expensive treatments.Medicaid pays for nursing home expenses of the poor.Medicaid’s Impact on Overall Health Care PricesP*QpoorQnonpoorDpoor+nonpoorDpoor+nonpoorP*QpoorQnonpoorPQ/tSDpoorDnonpoorWithout MedicaidQ/tSPDpoorDnonpoorWith MedicaidMedicaid and the ElderlyMedicare is the program for the elderly. Medicaid is the program for the poor.If a patient is poor and over 65, Medicaid pays for Medicare premiums, deductibles and most of the co-payments.Expenses by Age Group (1996)Medicaid expenses per patient overall $4,250Children under 5 $1,406Elderly 75-84 $8,956Elderly over 85 $12,169Children make up half the Medicaid population and account for 22% of expenses.Those over 65 make up for 13% of the Medicaid population and account for 35% of expenses.Getting Medicaid to Pay for Nursing HomesPeople have to show very little income and have very few assets in order for Medicaid to pay for nursing home care.To determine Medicaid eligibility, the government looks at financial records going back 2 years to ensure that the person did not give away their assets so that Medicaid would pay.The Relationship Between Medicare and MedicaidMedicarePart A is mandatory and has premiums, deductibles and co-payments. Part B is voluntary and has premiums, deductibles and co-payments.When the person is eligible for both Medicare and Medicaid, states choose to have their Medicaid programs pay the Medicare premiums, deductibles and most of the co-payments for both Part A and Part B.Cost Saving Measures in MedicaidMedicaid costs were rising 10% per year in the 1990sHMOsMedicaid has increased it use of HMO’s from 5% coverage in 1990 to 50% by 1998.Primary Care Physicians were established to minimize inappropriate emergency room use by Medicaid patients.