Medicaid

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Medicaid is an entitlement program in the United States that provides health coverage to low- income individuals and families. Medicaid is often associated with Medicare, a social insurance program aimed to benefit the elderly and individuals with certain disabilities. Unlike Medicare, which is fully funded by the government, Medicaid is jointly funded by federal and state governments. Medicaid was first enacted on July 30, 1965 through Title XIX of the Social Security Act. By structure, each individual state presides over its own Medicaid program: “MediCal” (California), “TennCare” in Tennessee, etc., while the federal Centers for Medicare and Medicaid Services (CMS) provide oversight of the state-run programs, as well as certain mandates for service, quality control, funding expenditures, and eligibility standards.

Medicaid is basically a joint federal-state program that provides health insurance benefits to certain categories of low-income individuals, including children, expectant mothers, senior citizens, and people with certain types of disabilities, primarily those with no health insurance or substandard coverage. However, Medicaid is also an option for qualifying middle to high income individuals who seek to preserve some of their assets in the event of costly medical happenstance, such as stroke, heart attack, degenerative disease, etc., which often requires exorbitant nursing home care. Medicaid serves as a safety net not only for those individuals and families of limited means requiring health coverage, but also those who want to protect their assets for purposes of inheritance to benefit future generations.

Introduction

Medicaid is the United States health program for individuals and families with low incomes and resources. It is an entitlement program that is jointly funded by the states and federal government, and is managed by the states. Among the groups of people served by Medicaid are eligible low-income parents, children, seniors, and people with disabilities. Being poor, or even very poor, does not necessarily qualify an individual for Medicaid. Nor does a middle class or higher income necessarily disqualify from Medicaid benefits. Medicaid is the largest source of funding for medical and health-related services for people with limited income.

History and participation

Medicaid was created on July 30, 1965 through Title XIX of the Social Security Act. Each state administers its own Medicaid program while the federal Centers for Medicare and Medicaid Services (CMS) monitors the state-run programs and establishes requirements for service delivery, quality, funding, and eligibility standards.

Each state may have its own name for the program. Examples include "Medi-Cal" in California, "MassHealth" in Massachusetts, and "TennCare" in Tennessee. States may bundle together the administration of Medicaid with other separate programs such as the State Children's Health Insurance Program (SCHIP), so the same organization that handles Medicaid in a state may also manage those additional programs. Separate programs may also exist in some localities that are funded by the states or their political subdivisions to provide health coverage for indigents and minors.

State participation in Medicaid is voluntary; however, all states have participated since 1982 when Arizona formed its Arizona Health Care Cost Containment System (AHCCCS) program. In some states Medicaid is subcontracted to private health insurance companies, while other states pay providers (such as doctors, clinics, and hospitals) directly.

Another service in the Social Security program under Medicaid are dental services. These dental services are an optional service for adults above the age of 21; however, this service is a requirement for those eligible for Medicaid and below the age of 21.

Dental services must be given in order to meet standards of dental practice. These standards should be determined by the state, following discussion regarding the health of the child. Minimum services should include pain relief, restoration of teeth and maintenance for dental health. EPSDT individuals below the age of 21 are not to be limited emergency services. Oral Screenings are not required for EPSDT recipients and they do not suffice as a direct dental referral. If a condition requiring treatment is discovered during an oral screening, the state is responsible for taking care of this service, regardless if it is covered on that particular Medicaid plan.

Early and Periodic Screening, Diagnostic and Treatment (EPSDT) is a mandatory Medicaid program for children that aims to focus on prevention on early diagnosis and treatment of medical conditions.

The Medicaid Drug Rebate Program was created by the Omnibus Reconciliation Act of 1990. This act helped to add Section 1927 to the Social Security Act of 1935 which became effective on January 1, 1991. This program was formed due to the costs that Medicaid programs were paying for outpatient drugs at their discounted prices.

The Veteran's Health Care Act of 1992 (VHCA) became active on November 4, 1992 as it amended Section 1927(a) of the Omnibus Reconciliation Act. This act includes amendments that relate to the coverage of manufacturers' drugs, duplicate payments, and rebate calculations.

The Omnibus Reconciliation Act of 1993 (OBRA 93') amended Section 1927 of the Act as it brought changes to the Medicaid Drug Rebate Program.

Comparisons with Medicare

Although their names are similar, Medicaid and Medicare are very different programs. Medicare is an entitlement program funded entirely at the federal level. It is a social insurance focusing primarily on the older population. As stated in the CMS website, Medicare is a health insurance program for people age 65 or older, people under age 65 with certain disabilities, and people of all ages with end stage renal disease. The Medicare Program provides a Medicare part A which covers hospital bills, Medicare Part B which covers medical insurance coverage, and Medicare Part D which covers prescription drugs.

Medicaid is a means-tested program that is not solely funded at the federal level. Medicaid is a needs-based social welfare or social protection program rather than a social insurance program. Eligibility is determined by income. States provide up to half of the funding for the Medicaid program. In some states, counties also contribute funds. The main criterion for Medicaid eligibility is limited income and financial resources, a criterion which plays no role in determining Medicare coverage. Medicaid covers a wider range of health care services than Medicare.

Some individuals are eligible for both Medicaid and Medicare (also known as Medicare dual eligibles). In 2001, about 6.5 million Americans were enrolled in both Medicare and Medicaid.

Eligibility and Social Issues

The complexities surrounding the availability and eligibility of Medicaid to those in need have caused numerous social concerns, especially to those individuals who “fall through the cracks.” Having a limited income is one of the primary requirements for Medicaid eligibility, but poverty alone does not qualify a person to receive Medicaid benefits unless they also fall into one of the defined eligibility categories. According to the CMS website, "Medicaid does not provide medical assistance for all poor persons. Even under the broadest provisions of the Federal statute (except for emergency services for certain persons), the Medicaid program does not provide health care services, even for very poor persons, unless they are in one of the designated eligibility groups."

As Medicaid, as previously stated, is an entitlement program designed primarily to provide low-income families and individuals with health care coverage, certain limitations prevent this program from helping all who view themselves as qualifying for benefits. Budgetary constraints, for example, limit the distribution of benefits to those who fit certain guidelines respective to three distinct qualifiers: category (age and/or disability), income level, and real assets (home value, bank accounts, stocks, etc.) (Bove, Alexander D. Jr., 1996). There are a number of different Medicaid eligibility categories; within each category there are requirements other than income that must be met. These other requirements include, but are not limited to, age, pregnancy, disability, blindness, income and resources, and one's status as a U.S. citizen or a lawfully admitted immigrant.

As a result, many individuals may be denied benefits if their income, assets, age, or even the type of illness or disability suffered do not fit state or federal guidelines. Also, amid slight controversy, some middle to high-income individuals may qualify for Medicaid benefits over their lower-income counterparts because their ages, illnesses, disabilities, etc. do happen to fit said guidelines. Some people may argue that middle to high income individuals should not be entitled over the poor in most cases. But the middle class and moderately wealthy often present the case of asset preservation for purposes of inheritance. In other words, these individuals may seek Medicaid coverage in order to protect their assets and life savings from being swallowed up by exorbitant medical bills, including nursing home costs, which average $75,000 per annum. Some states have a “spend down” policy in which higher-income individuals must spend down or decrease their real assets in order to qualify for Medicaid benefits. Special rules also exist for those living in a nursing home and disabled children living at home. A child may be covered under Medicaid if she or he is a U.S. citizen or a legal immigrant of the U.S. A child may be eligible for Medicaid regardless of the eligibility status of his or her parents or guardians. Thus, a child can be covered by Medicaid based on their individual status even if his or her parents are not eligible. Similarly, if a child lives with someone other than a parent, he or she may still be eligible based on his or her individual status. Child welfare agencies also ensure that foster children, as well as those in adoption placement are also eligible for Medicaid benefits.

Another area of social concern in regards to Medicaid eligibility is that of the underinsured, or people with declining employee sponsored insurance (ESI) whose private coverage, however ineffective, may disqualify these individuals for Medicaid. For this reason, Medicaid initiated the State Children’s Health Insurance Program (SCHIP) to ease the health care burden for parents of uninsured or underinsured children. SCHIP may also extend to children of middle to higher-income parents under certain conditions. Although Medicaid is largely perceived as a safety net for the poor and uninsured, specific conditions may qualify or disqualify certain individuals regardless of income level.

Both the federal government and state governments have made changes to the eligibility requirements and restrictions over the years. In 2005, the Deficit Reduction Act (DRA) (Pub.L. No. 109-171) significantly changed the rules governing the treatment of asset transfers and homes of nursing home residents.

The DRA now requires that anyone seeking Medicaid must produce documents to prove that he or she is a United States citizen or resident alien.

Medicaid does not pay benefits to individuals directly; Medicaid sends benefit payments to health care providers. Medicaid helps individuals who have no medical insurance or poor health insurance. In some states Medicaid beneficiaries are required to pay a small fee (co-payment) for medical services.

Budget

Unlike Medicare, which is solely a federal program, Medicaid is a joint federal-state program. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive matching funds and grants. The federal matching formula is different from state to state, depending on each state's poverty level. The wealthiest states only receive a federal match of 50% while poorer states receive a larger match.

Medicaid funding has become a major budgetary issue for many states over the last few years, with states, on average, spending 16.8% of state general funds on the program. If the federal match expenditure is also counted, the program, on average, takes up 22% of each state's budget. In 2002, Medicaid enrollees numbered 39.9 million Americans, the largest group being children (18.4 million or 46 percent). It is estimated that 42.9 million Americans will be enrolled in 2004 (19.7 million of them children) at a total cost of $295 billion. Medicaid payments assist nearly 60 percent of all nursing home residents and about 37 percent of all childbirths in the United States.

Medicaid is also the program that provides the largest portion of federal money spent for health care on people living with HIV. Typically, poor people who are HIV positive must progress to AIDS before they can qualify under the "disabled" category. More than half of people living with AIDS are estimated to receive Medicaid payments. Two other programs that provide financial assistance to people living with HIV/AIDS are the Social Security Disability Insurance (SSDI) and the Supplemental Security Income.

Medicaid planners typically advise retirees and other individuals facing high nursing home costs to adopt strategies that will protect their financial assets in the event of nursing home admission. State Medicaid programs do not consider the value of one's home in calculating eligibility, therefore it is often recommended that retirees pursue home ownership. By adopting the recommended strategies, many seniors hope they will quickly qualify for Medicaid benefits if the need for long-term care arises.

During the 1990s, many states received waivers from the Federal government to create Medicaid managed care programs. Under managed care, Medicaid recipients are enrolled in a private health plan, which receives a fixed monthly premium from the state. The health plan is then responsible for providing for all or most of the recipient's healthcare needs. Today, all but a few states use managed care to provide coverage to a significant proportion of Medicaid enrollees. Nationwide, roughly 60% of enrollees are enrolled in managed care plans. Core eligibility groups of poor children and parents are most likely to be enrolled in managed care, while the aged and disabled eligibility groups more often remain in traditional "fee for service" Medicaid.

Some states operate a program known as the Health Insurance Premium Payment Program (HIPP). This program allows a Medicaid Recipient to have private health insurance paid for by Medicaid. Often this allows the recipient to have better coverage, and have more doctors available to them. As of 2008 relatively few states had premium assistance programs, and enrollment was relatively low. Interest in this approach remained high, however.

Important legislation

• 1965 PL 89-97 Medicaid
• 1997 PL 105-33 Balanced Budget Act (Children's Health Insurance Program)
• 1990 OBRA Federal legislation: the beginnings of the Health Insurance Premium Payment Program (HIPP), under the George H. W. Bush Administration
• 1993 Medicaid Estate Recovery Mandate requiring states to sue the estate of decedents for medical care costs paid by Medicaid

Medicaid is an entitlement program that provides medical coverage to those individuals who meet certain eligibility criteria. These criteria can very from state to state. Despite limitations imposed mainly by budgetary constraints, Medicaid, as an entitlement program, has helped millions of uninsured, underinsured, and disabled individuals obtain healthcare coverage otherwise unaffordable. Medicaid also benefits most wards of the state, such as children in group homes, children pending adoption, and foster children. Medicaid inspired special programs such as SCHIP also enables parents with declining employer issued health insurance to access adequate health coverage for their children. Members of the middle class and upper income bracket also benefit from Medicaid as a form of asset protection in cases of unexpected medical costs that might otherwise dissolve heritable assets. Unfortunately, Medicaid does not benefit all individuals in need of it, due to strict qualifications regarding age/disability category, income, and assets; but the program continually serves as a safety net for all who qualify.

References

ISBN links support NWE through referral fees

• Bove, Alexander A. Jr. The Medicaid Planning Handbook: A Guide to Protecting Your Family's Assets from Catastrophic Nursing Home Costs. Little, Brown, and Company, 1996. ISBN 0316103748
• Green, Rob, Anna S. Sommers, and Mindy Cohen. "Medical Spending on Foster Children." Urban Institute, 2005. Retrieved October 3, 2008.
• Heiser, K. Gabriel. How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets. Phylius Press, 2008. ISBN 0979080134
• Jost, Timothy Stoltzfus. "The Tenuous Nature Of The Medicaid Entitlement"
• Zuckerman, Stephen, and Allison Cook. "The Role of Medicaid and SCHIP as an Insurance Safety Net." Urban Institute, 2006. Retrieved October 3, 2008.

External links

• Centers for Medicare and Medicaid Services official web site
• Historical and Projected Trends in Medicare, Staff Paper of the Office of the Assistant Secretary for Planning and Evaluation (ASPE), U.S. Department of Health and Human Services, October 2006.
• Kaiser Family Foundation - Substantial resources on Medicaid including federal eligibility requirements, benefits, financing and administration.
• State Health Facts Data on health care spending, utilization, and insurance coverage, including details extensive Medicaid information.
• State of the States 2006 - Information on state health reforms, including Medicaid (PDF).
• Medicaid information from Families USA
• Medicaid Reform - The Basics from The Century Foundation
• National Association of State Medicaid Directors Organization representing the chief executives of state Medicaid programs.
• Ohio Medicaid Basics A primer on one state's Medicaid program.
• "Medicaid Research" and "Medicaid Primer" from Georgetown University Center for Children and Families.
• Ranking of state Medicaid programs by eligibility, scope of services, quality of service and reimbursement from Public Citizen.

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