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 Medicare: $549 Billion in federal spending in 2012  Established 1965  Funded by the Social Security payroll tax  Recipients are those over 65 or.

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Presentation on theme: " Medicare: $549 Billion in federal spending in 2012  Established 1965  Funded by the Social Security payroll tax  Recipients are those over 65 or."— Presentation transcript:


2  Medicare: $549 Billion in federal spending in 2012  Established 1965  Funded by the Social Security payroll tax  Recipients are those over 65 or with disabilities  Various components cover doctor visits, hospitalization, prescription medications  48 million people covered in 2011  (

3  Established 1965 as Title XIX (19) of the Social Security Act. State participation is optional. SC joined in 1968, and Arizona was the last state to join, in 1982.  The federal government provides between 50% and 85% of the funding for Medicaid in each state. The average is 57%. The percentage for each state is determined by the Federal Medical Assistance Percentage (FMAP), which compares the state’s per capita income to the national average.  Total federal spending in FY 2012 was $258 Billion.  Total federal + state spending was $415 Billion.  (Source: Congressional Budget Office; Kaiser Family Foundation)

4  In SC in 2011, the federal share was 70.04%. Six other states get over 70% federal funding.  The Affordable Care Act originally required states to expand Medicaid eligibility or lose their federal funding for the program. This portion of the act was declared unconstitutional by the Supreme Court, so the additional funding was optional for the states. Gov. Haley turned it down for South Carolina.

5  Overall federal spending levels are determined by the number of people participating in the program and the services provided.  The federal government pays a smaller share of Medicaid expenses in states with higher per capita incomes, which have a lower proportion of eligible recipients and can presumably afford to contribute a greater share themselves.  It takes up an average of 17% of state general revenue funds (second biggest expense, slightly behind K-12 education).

6  The federal government establishes broad national guidelines and each state establishes its own eligibility standards, determines the type, amount, duration and scope of services, sets the rate of payment for services, and administers its own program.  Traditionally, eligibility was tied to eligibility for AFDC; the traditional populations served were families with children, pregnant women, and the aged, blind or disabled (not simply poor individuals). Eligibility has been expanded since 1988.

7  Average annual spending levels  $3947 per enrollee  $1782 per adult  $1400 per child  $10,971 per elderly person  $11,547 per disabled person  State payments per recipient range from $2472 in CA to $7506 in NY  Prescription drug costs are the largest source of annual cost growth.

8  As of 2014, Medicaid served  43 million children under Medicaid or CHIP  11 million non-disabled low-income adults  8.8 million disabled non-elderly adults (may also get SSI)  4.6 million elderly adults, most of whom also get Medicare  Eligible populations:  Almost anyone who is below 133% of the poverty line (significantly expanded as of 2014 by the Affordable Care Act)  Pregnant women below 185% of poverty line  Parents who qualify for TANF  Certain eligible recipients of adoption and foster care  Members of some groups transitioning from welfare to work  States may expand eligibility beyond that  (

9  Three general types of health protection:  Health insurance for low-income families with children, and people with disabilities  Long-term care for older Americans and people with disabilities;  Supplemental coverage for low-income Medicare beneficiaries for services not covered by Medicare

10  33 categories of optional services; each state sets its own eligibility guidelines  Services required to be provided:  Hospital treatment (inpatient and outpatient)  Rural health clinic, laboratory and X-ray services  Nursing facility  Home health services  Community long-term care and hospice for adults  Preventive care for children  Family planning (but not most elective abortions)  Services by physicians, nurses, nurse practitioners, nurse- midwives, dentists  Pharmaceutical services (prescriptions)

11  States may apply for waivers from federal requirements to offer alternative health care arrangements.  Massachusetts’ universal insurance requirement under Gov. Romney came from a Medicaid waiver (Medicaid funds were used to cover the uninsured).  This was the model for the federal Affordable Care Act.  Florida now uses a voucher system.  Tennessee went to an HMO system, now abolished.  South Carolina has phased in a managed care system.

12  SCHIP, now simply CHIP  Title XXI (21) of Social Security Act  $10.6 Billion funding in 2009  $7.4 Billion federal, $3.1 Billion state  Established 1997 under Clinton Administration  80% federally funded  Covers 6.5 million uninsured children whose families did not qualify for traditional Medicaid  States could set up separate programs or run it as part of their Medicaid program  States determine eligibility levels

13  You pay a premium into an insurance pool. In the event that you are sick or injured, the insurance policy pays all or part of your medical expenses.

14  The uninsured drive up the cost of health care for everyone else.  Health care providers are required to provide life-saving treatment and some other types of care even to those who cannot pay for it.  The cost of this treatment is then passed on to those who do have insurance or who can afford to pay for their care, in the form of higher insurance premiums or higher out-of-pocket expenses.

15  Enacted March 23, 2010  Expansion of requirements for coverage of preventive care by insurers (lowers long-term costs)  People under 26 may remain on their parents’ insurance policies (younger people who are just entering the workforce are least likely to get insurance as a job benefit)  Removal of lifetime dollar limits on policy coverage for key conditions

16  States are required to set up insurance exchanges or participate in a federal insurance exchange for the uninsured to buy coverage, or a federal/state hybrid (SC joined the federal program, NC set up a state program)  The White House reports that >7 million people have signed up through these exchanges during the first enrollment period. Some were previously uninsured and some were insured but have found cheaper or more appropriate policies than their previous ones.  Studies show that states have varied in their implementation of the ACA requirements.

17  Thus far, states that have chosen to expand Medicaid under the ACA have seen significantly higher growth in enrollment than states that have not done so.  States that have chosen to expand Medicaid have seen significantly greater declines in the portion of the population that is uninsured than states that have not done so.

18  The ACA does not actually require businesses to insure their employees, BUT:  Beginning in 2014, businesses with more than 50 employees must provide them with insurance coverage or pay an “assessment” if their employees receive tax credits for individual insurance premiums.  This “assessment” is $2000 per employee beyond the first 30 employees. The Department of Health and Human Services estimates than less than 2% of US businesses will be affected by this requirement.  Certain small businesses are offered tax credits to insure their employees.

19  National Federation of Independent Business v. Sebelius (2012): The Supreme Court ruled, 5-4, that Congress has no power under the Interstate Commerce Clause to require people to buy health insurance,  BUT Congress DOES have the power to impose a tax penalty on those who don’t buy insurance.  So, the government can’t require you to buy health insurance, but it can make you pay a fine if you don’t. Same outcome, different legal reasoning.

20  Many of those in poverty do not qualify for Medicaid, because they are childless and not pregnant or disabled.  In some working families, only the children and not the parents are eligible for coverage.  Many doctors refuse treatment to Medicaid patients, because the low reimbursement is the only payment they will receive  As a result, a disproportionate amount of Medicaid patients’ services are in clinics and ERs.  Managed care options may not provide adequate services.  So Medicaid has its limitations and doesn’t provide care that works for everyone who needs it.  Will the Affordable Care Act address these issues?

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