1. Medicaid and Health Reform: A Cautionary View
Barbara Coulter Edwards
Principal
September 15, 2008

2. Medicaid’s History Covering the Uninsured
April 16, 2019
Medicaid’s History Covering the Uninsured
58 Million Beneficiaries
Millions of Medicaid Beneficiaries
Section 1115 Waivers Expand
Medicaid Eligibility ( )
Recession and State Fiscal Crisis
( )
AFDC Repealed
(1996)
Medicaid Eligibility Expanded to Women and Children ( )
Already serves low income populations, including above poverty
Existing networks, managed care arrangements
Low administrative overhead, good value
FMAP!
Many uninsured children already potentially eligible – and childless adults under poverty – a natural match!
Make up has changed since TANF reforms – less than 25% now receive cash
Medicaid
Enacted
(1965)
SSI
Enacted
(1972)
SCHIP
Enacted
(1997)
SOURCE: Kaiser Commission on Medicaid and the Uninsured analysis of data from the Centers for Medicare and Medicaid Services, CBO March 2005 Medicaid baseline.

3. Many Already Potentially Eligible
April 16, 2019
Many Already Potentially Eligible
Percent of Uninsured Children by Income*
41% <100% FPL
28% % FPL
*12% of U.S. Children
Uninsured

4. “Pesky Little Problem”
April 16, 2019
“Pesky Little Problem”
Current federal Administration is “cool” to state financing proposals; federal funds may not materialize!
SCHIP expansion veto
Limits on IGTs, provider taxes, CPEs, waiver refinancing
CMS limits to SCHIP over 250%
HHShas rejected new state efforts to creatively match previously “unmatched” state/local dollars through 1115 waivers
CMS limited use of Inter-Governmental Transfers (IGTs), Certified Public Expenditures (CPEs), provider taxes, and Medicaid administrative claiming
Don’t know where next administration will land on this – and if thru 1115 waivers, each Secretary has discretion to “change its mind” – can be a less than reliable source of funding

5. Can States Commit to Uninsured…
April 16, 2019
Can States Commit to Uninsured…
…if states can’t sustain current Medicaid commitments?
Short term – economic downturns require immediate state response
States must balance budgets annually
Medicaid is countercyclical – demand is greatest when states can least afford it
35-40 states expected to have shortfall in FY 2009
During last recession, some states had to reduce eligibility for optional expansion groups
Provider rate freezes and inadequate provider rates threaten access to care
Medicaid’s rate of growth over time is higher than rate of state revenue growth, even without dramatic expansions (Kronick and Rousseau, Health Affairs 2007 revenue will grow to meet Medicaid growth, but!)

6. Medicaid Annual Growth by Category of Eligibility
April 16, 2019
Medicaid’s Future
Medicaid Annual Growth by Category of Eligibility
Anticipate continued upward spending pressure, especially as caseload grows in Aged, Blind, Disabled
ABD drives 70% of spending! (40% of spending driven by Medicare duals)
Source: Calculations by HMA based on CMS historical data and CBO Projections through 2017, March 2007 Medicaid Baseline.

7. What About Long Term Care?
April 16, 2019
What About Long Term Care?
“Universal coverage” proposals don’t address long term care…
…or deal explicitly with people with chronic, high cost needs

8. Medicaid Financing Needs Attention
April 16, 2019
Medicaid Financing Needs Attention
Reformers see Medicaid as a vehicle for covering more working adults
And, appear to presume Medicaid will continue as the safety net for high costs groups, especially long term care
The “sustainability” of Medicaid for states needs to be assured!
States have recommended fmap reforms as one option to help sustain the program during downturns
NGA has recommended that Medicare become fully responsible for dual eligibles
Nation needs a new, “baby boom reality” LTC financing strategy

9. April 16, 2019
Basic Question
Is it actually helpful for states to pursue strategies they may not be able to sustain?
Or does it take pressure off Congress to act?
Should states keep trying to cover the uninsured…
…or is this a federal responsibility?
For many states, covering the uninsured will remain a priority
If a new Administration makes federal money available to help, even more states will launch initiatives
Sustaining current Medicaid will compete with any expansion efforts
Without larger Medicaid financing reforms, state efforts will fall short of the goal