1. National Health Law Program
The Basics of Medicaid
Mara Youdelman
National Health Law Program
Congressional Briefing: Universal Health Care Task Force
February 8, 2002

2. The National Health Law Program
NHeLP is a national non-profit public interest law firm working working to increase and improve access to quality health care on behalf of America’s limited income individuals including the unemployed poor, people of color, women, children, the elderly and people with disabilities
Our areas of expertise include: Medicaid; managed care; waivers of Medicaid requirements under §§ 1115 and 1915(b); Early and Periodic Screening, Diagnostic and Treatment services (EPSDT); civil rights; and racial and ethnic disparities in health care

3. What is Medicaid?
Medicaid is a federal-state entitlement program for low-income individuals that covers basic health and long-term care services
Medicaid serves four main groups of low-income Americans: the elderly, people with disabilities, parents and children – over 40 million individuals

4. Why should the Task Force be concerned about Medicaid?
Medicaid and Medicare together represent a foundation for UHC – incremental reform can be built upon these two programs
Single largest source of federal funds to the states – about 40% of the federal grant-in-aid dollars flowing to the states (1999)
Medicaid under stress – state budget deficits and rising healthcare costs
Losing ground in Medicaid can hinder efforts towards UHC
Medicaid – moving up, SCHIP, covering more low-income individuals
Medicare – moving age limit down, buy-ins for 55-65, PACE
On average, states spent 10% of their own general fund dollars on Medicaid; Medicaid spending has risen avg. _____/year and projected for ___ for 2002
Rising unemployment b/c of recession likely to lead to increased Medicaid rolls

5. What does Medicaid pay for?
Pays for over 1/3 of all births in U.S.
Finances over 70% of all nursing home residents -- paying for about ½ of all nursing home care

6. What do states receive from the federal government?
Federal Gov’t reimburses states for a substantial portion of their costs
Services: FMAP avg. 57% (varies from 50% to 83% depending upon a state’s per capita income)
Administrative costs: FMAP varies from 50% to 100%, depending on the administrative activity
FMAP – Federal Medical Assistance Percentage; poorer states have higher FMAP, based on states per capita income
Admin costs – 90% for family planning; 100% for implementing and operating an immigration status verification system

7. Who is Covered? Over 40 million individuals (1998)
Children – 50% of all Medicaid beneficiaries; roughly 21 million or 1 in 4 U.S. children
Parents million low-income adults in families with children, the vast majority of whom are women
Elderly -- more than 4 million adults 65 and over
Individuals with Disabilities -- about 6.8 million
Elderly million of these were eligible because they were receiving cash assistance through the Supplemental Security Income (SSI) program. Others have too much income to qualify for SSI but “spend down” to Medicaid eligibility by incurring high medical or long-term care expenses.

8. Who is covered? Created to cover some low-income individuals
Eligibility depends on categories
States set own income & asset eligibility criteria
Does not cover childless adults and most parents

9. Who is Covered?
Covers more individuals than Medicare or any other health insurer
But covers only 25% of non-elderly with incomes below 200% FPL*
* 200% FPL is $35,000 for a family of four

10. Mandatory Eligibility
Mandatory v. Optional
Eligibility Groups – mandatory and optional
Services – mandatory and optional
Groups 
Services 
Mandatory Eligibility
Optional Eligibility
Mandatory Services
YES
Optional Services
Depends on State
It is often said that there isn’t one Medicaid program but rather 50 different Medicaid programs b/c of broad flexibility states have to shape eligibility categories and benefit packages.

11. Eligibility Categories

12. Eligibility Categories: Mandatory
Pregnant women and children up to 6 years at < 133% FPL
Children 6-19 years, < 100% FPL
§ 1931 – families deemed to be receiving AFDC because their current income, resources and circumstances would have met the State’s AFDC standards in effect on July 16, 1996
Transitional Medical Assistance – certain families whose income exceeds the State’s eligibility limit due to an increase in earned income
Individuals receiving SSI and related programs
Newborn children of Medicaid-eligible women
Qualified Medicare beneficiaries & Specified Low Income Beneficiaries
Women for 60 days post-partum
And other categories listed in the Medicaid Act
Working disabled – qualified severely impaired individuals and qualified disabled working individuals
Non-parent, non-disabled adults can only be covered if state receives a waiver

13. Eligibility Categories: Optional
Pregnant women and infants with income > 133% and < 185% FPL
Children 1-6 > 133% FPL; 6-19 > 100% FPL
Optional targeted low-income children (SCHIP expansion of Medicaid)
“Medically needy” - those with incomes above the eligibility limit until their qualifying medical expenses are taken into account
Continuous and presumptive eligibility
Individuals receiving home and community based services - mostly elderly and disabled
Women with breast or cervical cancer
Non-institutionalized children with disabilities
And other categories listed in the Medicaid Act

14. Mandatory and Optional Medicaid Recipients, 1998
By group
Of all 1998 enrollees, this is percentage mandatory and optional
Source: Urban Institute estimate, based on data from FY 1998 HCFA-2082 and HCFA-64 reports, 2001, reprinted with permission from the Kaiser Family Foundation

15. Expenditures by Enrollment Group
Elderly and blind/disabled comprise 1/3 of enrollees but over 2/3 spending
Children and parents comprise 2/3 of enrollees but less than 1/3 spending
*Total expenditures exclude administrative expenses; ** Disproportionate Share hospital payments
SOURCE: Urban Institute estimate, based on data from FY 1998, HCFA-2082 and HCFA-64, reports; reprinted with permission from Kaiser Family Foundation

16. Services

17. What services does Medicaid cover?
Relatively few services are mandatory
States have extensive flexibility to provide additional services
Approx. 2/3 of total Medicaid spending is “optional” spending – on either optional beneficiaries or optional services for mandatory beneficiaries
So while 70% of eligibility categories are mandatory, 70% of spending is optional.

18. Services: Mandatory Physician services Laboratory/x-ray services
In-patient hospital services
Outpatient hospital services
EPSDT
Family planning services & supplies
Pregnancy related services
FQHC & rural health clinic services
Nurse midwife services
Certified nurse practitioner services
Nursing facility services for ind. > 21
Home health care services (for ind.
entitled to Nursing Facility care)
Mandatory services apply to mandatory eligibility categories
For optional eligibility categories, states can determine scope of services
EPSDT services include periodic screenings to identify physical and mental conditions as well as vision, hearing, and dental problems. EPSDT services also include follow-up diagnostic and treatment services to correct conditions identified during a screening, without regard to whether the state Medicaid plan otherwise covers those services with respect to adult beneficiaries.
FQHC services are primary care and other ambulatory care services provided by community health centers and migrant health centers funded under section 330 of the Public Health Service Act, as well as by “look alike” health clinics that meet the requirements for federal funding but do not actually receive federal grants. FQHCs must provide services without regard to ability to pay.

19. Services: Optional Prescription drugs
Home health services for ind. not eligible for nursing facility
Private duty nursing services
Dental services
Vision care
Physical therapy
Institutional care for individuals with mental disabilities
In-patient psychiatric hospital services for ind. < 21
Hospice care
Case management services
Personal care services
Other services outlined in Medicaid Act

20. Services: Mandatory v. Optional
65% of spending is for optional services or groups
Total:
$154 billion
Note that: while 70% of eligibility categories are mandatory (see slide 13) , 70% of spending is optional.
NOTE: Expenditures do not include DSH payments, admin costs, or accounting adjustments.
SOURCE: Urban Institute estimates based on data from FY 1998 HCFA-2092 and HCFA-64 reports; reprinted with permission from the Kaiser Family Foundation

21. Medicaid Spending by Eligibility Category & Service, 1998
$ Billions
$24.5
$16.0
$67.7
$46.1
NOTE: Expenditures do not include DSH, administrative costs, or accounting adjustments.
SOURCE: Urban Institute Estimates, based on data from FY 1998 HCFA-2082 and HCFA-64 reports, reprinted with permission from Kaiser Family Foundation.

22. Distribution of Spending by Eligibility Group and Service, 1998
Illustrates broad flexibility states have to determine eligibility and services
SOURCE: Urban Institute estimates, based on data from FY 1998 HCFA-2082 and HCFA-64 reports; reprinted with permission from the Kaiser Family Foundation

23. Additional Information
NHeLP serves as a resource for information about the Medicaid Program
Washington, DC Office:
Website:
NHeLP recently published its updated Advocates Guide to the Medicaid Program – sign up on back table for a copy or contact us or