Abstract two readings

Medicaid At 50: Remarkable Growth Fueled By Unexpected Politics Sparer, Michael S . Health Affairs ; Chevy Chase  Vol. 34, Iss. 7,  (Jul 2015): 1084-1091.

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ABSTRACT  

Medicaid has grown exponentially since the mid-1980s, during both conservative Republican and liberal

Democratic administrations. How has this happened? The answer is rooted in three political variables: interest

groups, political culture, and American federalism. First, interest-group support (from hospitals, nursing homes,

and insurers) is more influential than the fragmented group opposition (from underpaid officebased physicians).

Second, Medicaid provides a partial counterweight to conservative charges of a federal health care takeover

because of the states' roles in administering the program. Third, Medicaid's intergovernmental fiscal partnership

creates financial incentives for state and federal officials to expand enrollment-expansions that these policy

makers often favor, given the program's increasingly important role in the nation's health care system. This

institutional dynamic is here called catalytic federalism.

FULL TEXT  

Headnote

ANALYSIS &COMMENTARY

ABSTRACT Medicaid has grown exponentially since the mid-1980s, during both conservative Republican and

liberal Democratic administrations. How has this happened? The answer is rooted in three political variables:

interest groups, political culture, and American federalism. First, interestgroup support (from hospitals, nursing

homes, and insurers) is more influential than the fragmented group opposition (from underpaid officebased

physicians). Second, Medicaid provides a partial counterweight to conservative charges of a federal health care

takeover because of the states' roles in administering the program. Third, Medicaid's intergovernmental fiscal

partnership creates financial incentives for state and federal officials to expand enrollment-expansions that these

policy makers often favor, given the program's increasingly important role in the nation's health care system. This

institutional dynamic is here called catalytic federalism.

Medicaid has evolved from a welfare-based program for (some of) the nation's poor into the nation's primary

insurer for low-wage families. This trend likely will continue even though this intergovernmental public insurance

program has many detractors and few (truly enthusiastic) supporters. Relatively few physicians accept Medicaid

patients in their private practices. Safety-net hospitals grumble about Medicaid's low fees and regulatory

oversight. Conservative politicians see a massive and inefficient welfare program, while liberals pine for a

Medicare-style "single payer." And while beneficiaries are generally happy to have coverage, many worry about the

stigma still associated with Medicaid enrollment.

So why has Medicaid evolved as it has? Why does it still provide the nation's most promising path to universal

coverage?

To examine these questions, we need to divide Medicaid's fifty-year history into five eras and then to consider this

political and programmatic evolution through three lenses that political scientists often use to examine the policy

process: interest groups, political culture, and institutional (governmental) dynamics. At first glance, viewing

Medicaid through any of these lenses suggests a program unlikely to grow beyond its limited roots. Examined

more closely, each lens offers an unexpected explanation both for Medicaid's growth and for its promising future.

First Medicaid Era: State Discretion And Interstate Variation (1965-85)

Medicaid is not a single national program but a collection of fifty state-administered programs, each complying

with a complicated set of federal and state rules.2 Importantly, however, from the program's enactment in 1965

until the mid- 1980s, federal law contained few detailed requirements, instead delegating broad decisionmaking

authority to the states. States used this discretion in very different ways, with different rules on who received

coverage, what medical services were covered, and how much providers were paid. Even states with similar

profiles (New York and California, for example) had dissimilar programs, and one state (Arizona) did not even join

the program until 1982.3

The emphasis on state-based discretion was consistent with Medicaid's roots in "welfare medicine."While

Medicare (enacted at the same time) was a "social insurance" program, administered in a relatively uniform

fashion by the federal government, Medicaid functioned primarily as a program for public-assistance beneficiaries,

and states had long controlled who received welfare and what benefits they received.4 The program also suffered

from a dismal public image (as a stigmatized charity benefit) and was essentially boycotted by many private-

practice physicians,5 given its low reimbursement rates and complicated administrative bureaucracy.

The program suffered another blow in 1981, following the election of President Ronald Reagan, as newly enacted

restrictions on welfare eligibility had a downward ripple effect on Medicaid. By 1983 fewer than 40 percent of the

nation's poor people were enrolled.6 As the program entered its twentieth year, there were few hints that just a few

years later, during the late 1980s the federal government would mandate dramatic program growth, with more

generous eligibility levels, more comprehensive benefit packages, and higher reimbursement rates. That this

Medicaid revolution took place during the Reagan and Bush administrations is only one of its unexpected features.

Second Medicaid Era: Mandates, Rising Costs, And State-Federal Tension (1986-92)

The story of the federal Medicaid mandates is rooted in the election of several centrist Democratic governors in

the South; changes in congressional budgeting rules; and the 1986 election, which gave Democrats majority

control of the House and Senate.

The southern governors had a shared policy priority: lowering the high incidence of infant mortality.7 Their policy

proposal was to add uninsured pregnant women to the Medicaid rolls in hopes of encouraging greater prenatal

care use. The problem was that federal law required that eligibility expansions be across the board and not limited

to a specific population. Congress solved the problem in 1986 by using the budget reconciliation process (no

filibuster permitted) to allow states to expand coverage to pregnant women and children under age five with family

incomes below 100 percent of the federal poverty level. The next year Congress granted states discretion to cover

pregnant women and infants up to 185 percent of poverty. The new policy would presumably improve outcomes

while lowering costs, as savings from fewer low-birthweight babies, it was hoped, would exceed the cost of the

expanded eligibility.

Congressional Democrats (led by Rep. Henry Waxman of California), then struggling against an administration

anxious to cut social welfare spending, decided to again use the budget reconciliation process, only this time to

implement a far more ambitious Medicaid strategy: to mandate that the states dramatically expand coverage

(especially for children), benefits (for children), and reimbursement (for safety-net providers). The mandated

expansions from 1988 to 1990 had some bipartisan support (since many assumed, wrongly, that the increased

coverage would be cost-neutral) and Presidents Reagan and George H. W. Bush went along as well.

State officials generally were opposed to the new Medicaid mandates, particularly since they were implemented

just as the economy was falling into a recession. The combination of increased Medicaid spending (which went

from $41 billion in 1985 to $159.5 billion in 1993)8(p19) and reduced tax revenue forced states to impose cuts in

other programs in order to avoid budget deficits. As intergovernmental tension grew, state officials (first in West

Virginia and then around the country) developed novel strategies to maximize federal funding.

A simple example illustrates the strategy. Assume a state received a 50 percent match on its Medicaid

expenditures. If that state raised hospital reimbursement from $100 to $140 and simultaneously imposed a $30

tax on hospitals, the hospital ended up with a true reimbursement of $110, with the federal government picking up

$70 of this bill.

These leveraging initiatives were especially popular given the pressure (both political and legal) to raise hospital

reimbursement rates to facilities that provided a "disproportionate share" of the care rendered to beneficiaries and

the uninsured. Indeed, payments under the socalled disproportionate-share hospital program grew from $1.4

billion to $17.2 billion between 1990 and 1992, fueled largely by leveraged federal funds.9 Needless to say, federal

officials viewed such leveraging as inappropriate (if not illegal), but the techniques seemed to meet the letter (if

not the intent) of the law.

Third Medicaid Era: Managed Care And A New Medicaid Federalism (1993-2000)

By the time President Bill Clinton took office, Medicaid was out of favor as a coverage expan- sion vehicle. The

program was generating fierce intergovernmental tension, with states complaining about Medicaid mandates and

federal officials complaining about state efforts to maximize federal funding. Meanwhile, liberals of all sorts hoped

that the time for national health insurance had arrived, and while there was debate over the substance of the

universal coverage proposals, there were few voices for another round of Medicaid expansions.

Over the next few years, however, while President Clinton's comprehensive health reform initiative went nowhere,

Medicaid enrollment kept growing.Yet enrollment in this era did not grow because of new mandates. To the

contrary, some of the prior reimbursement mandates were repealed, and states scaled back efforts to leverage

additional federal funding. Instead, this expansion was marked by intergovernmental collaboration rather than

intergovernmental tension.

In 1997, for example, Congress enacted the State Children's Health Insurance Program (SCHIP, now called CHIP), a

federal block grant under which states either used federal funds to create a program for children in low-wage

families or used those same funds to expand their Medicaid programs. Seventeen states used the federal dollars

to help finance a separate state program, seven (plus the District of Columbia) integrated CHIP into their Medicaid

programs, and twenty-six did a combination of both.10

Some states also enacted eligibility expansions for adults (especially for parents of CHIP children), typically under

Medicaid's demonstration (or waiver) program authority. (Michael Gusmano and Frank Thompson discuss the

growth of waivers in this time period elsewhere in this issue.)11 From the state's perspective, expanding Medicaid

coverage offered a way to use (largely) federal funds to reduce the number of uninsured people. Federal officials

generally went along, encouraging state flexibility and innovation via the waiver process. As in the late 1980s, this

was a low-profile way to aid the uninsured-an incremental strategy that could succeed in an era in which more

comprehensive reform politically was impossible. Indeed, from that moment on, the waiver process became the

primary vehicle through which states experimented with new coverage, payment, and delivery reforms (a policy

approach that continues today).11

With the enactment of CHIP and the ongoing Medicaid expansions, the number of people eligible but not enrolled

increasingly came to the fore. Many potential applicants were unaware of their eligibility, or they were deterred by

complicated application processes, the stigma of public coverage, or concerns about immigration status. In this

context, state and federal officials began efforts to find and enroll these populations: conducting outreach in low-

income communities, working with community-based organizations and providers, simplifying the application

process, and engaging in social marketing campaigns designed to change the program's public perception. The

number of beneficiaries in both Medicaid and CHIP continued to escalate.

There was, however, a new dimension to the Medicaid expansions during the 1990s: They were accompanied by an

assumption that moving beneficiaries into managed care would both save money and improve quality. The theory

was straightforward. Health plans would provide beneficiaries with office-based medical homes, thereby reducing

reliance on expensive emergency departments. The health plans also would educate beneficiaries on the benefits

of healthy lifestyles and implement various care management initiatives.12

There soon emerged a new managed care industry, as safety-net providers (such as public hospitals and

community health centers) formed their own health plans, joining a number of forprofit plans that operated only in

the Medicaid market and several commercial plans that created separate divisions for Medicaid enrollees.

Meanwhile, several states were soon requiring all or most beneficiaries to enroll: Tennessee, for example,

implemented TennCare, under which nearly one million traditional Medicaid clients and 450,000 previously

uninsured residents were grouped together in a large managed care pool, with the presumed savings from

managed care counted on to fund the state's share.13

Fourth Medicaid Era: Crowd-Out And A Focus On Cost Containment (2001-08)

Medicaid politics changed yet again during the early 2000s, driven by a combination of econom- ics and

elections.The recession that began in late 2001 prompted states to scale back outreach and to focus instead on

cost containment. At the same time, President George W. Bush and other Republican leaders argued that Medicaid

had moved too far from its roots as a welfare medicine program and that it was inappropriately crowding out

private insurance coverage. The crowd-out debate grew especially intense in the summer of 2007 as Congress

considered legislation that would reauthorize and expand CHIP. President Bush twice vetoed such legislation,

arguing that public insurance expansions now covering children in middle-class families were undermining the

longstanding health insurance model, under which private coverage was the mainstream and programs such as

Medicaid and CHIP were intended to be a narrow public insurance safety net.

Rather remarkably, however, like the Energizer Bunny, Medicaid kept going (and growing) even during this era of

conservative control and economic distress.8(p19) To be sure, part of the growth was as a result of the recession

itself: As the economy declines, the newly unemployed (and their children) become eligible for public programs

such as Medicaid. Indeed, Medicaid is a "countercyclical" program because enrollment often rises just at the

moment that states' ability to fund their share of the program (via tax revenue) declines.

What is especially noteworthy, however, is that few (if any) of the policy prescriptions designed to constrain

Medicaid's costs during this era made much of a difference. For example, some states cut eligibility levels (the

renowned TennCare program was substantially scaled back),13 but most recognized that the same funding

formula that encourages expansion during good economic times (since the feds pay most of the bill) discourages

contraction during bad economic times (since every state dollar saved leads to even greater federal dollars lost).

Moreover, most people cut from the Medicaid rolls become uninsured, which means less revenue for their

providers (especially hospitals and community health centers). It often also means less revenue for private

insurers that are covering more and more Medicaid beneficiaries through their managed care plans. There is also a

political toll as consumer advocates and the media cover the human consequences for those that lose insurance

coverage.

Other Medicaid cost containment strategies were equally problematic. Proposals to cut the benefit package

typically targeted optional services (such as dental, vision, and behavioral health care). These strategies generated

interest group opposition, limited short-term savings, and even the possibility of higher overall costs (as

emergency department use among certain populations could rise). Proposals to cut provider reimbursement

generated even fiercer interest-group opposition and were limited by two additional factors: Not only do states

have less and less control over actual reimbursement levels (as managed care plans increasingly make these

decisions), but Medicaid reimbursement already is extremely low, making further cuts infeasible. Similarly, doctors

complained that increased beneficiary copayments were essentially reimbursement cuts (as patients either

reduced utilization or refused to pay).

To be sure, states occasionally did cut eligibility, reimbursement, and benefits, and small copays were added here

and there. There also were efforts to reduce prescription drug spending (through preferred drug lists and greater

use of generics), strategies to reduce long-term care spending (by encouraging home and community- based

services), and a renewed effort to focus on managed care (especially for high-cost populations, such as people

with disabilities and the elderly). Even with these incremental cutbacks, however, Medicaid enrollment and

spending continued to escalate.14

Fifth Medicaid Era: ACA, DSRIP, And The New Medicaid Model (2009-15)

Since 2009 Medicaid has emerged as a core component of the nation's transforming health care system. Not only

does Medicaid now have more than sixty-eight million beneficiaries (with millions more likely to enroll in the next

few years), but it also is increasingly at the heart of efforts to remake and reform the health delivery system. At the

same time, Medicaid itself continues to evolve, and as it becomes more a part of the American mainstream, it

moves further away from its public insurance roots and more toward a public-private hybrid program, one that is

be- coming the core health program for both the poor and low-wage workers more generally.

The change in Medicaid politics was clear shortly after President Barack Obama took office. In early February 2009

the new president signed legislation reauthorizing and expanding CHIP. The economic stimulus package enacted

shortly thereafter temporarily increased each state's federal Medicaid funding by at least 6.2 percent.15 But it was

the Affordable Care Act (ACA) that firmly established Medicaid's role as the nation's largest and fastest-growing

health insurer.

Under the ACA as written, each state was required to expand its Medicaid program to include all otherwise eligible

people with incomes at or below 138 percent of poverty. Medicaid thus would be a universal health insurance

program for the (very) poor-an extraordinary shiftfrom its original focus on the "deserving poor" (those outside the

labor market as a result of age or disability). The federal government would underwrite 100 percent of the cost of

expansion enrollees for the first two years, with that figure declining to 90 percent by 2017.

The US Supreme Court subsequently declared that states may refuse to implement the new expansion without

losing federal funding for their preexisting programs.16 This decision had the de facto impact of converting the

mandate into an option, and as of mid-May 2015, twentynine states (plus the District of Columbia) had

implemented the expansion, while twenty-one had not.17

The guess here is that over the next five years, most if not all of the remaining twenty-one states will sign on to the

ACA expansion. The lure of federal funding combined with strong interestgroup support from providers, insurers,

consumer advocates, and business leaders will be too difficult to resist. Early Medicaid history supports this

prediction: The fiftieth state, Arizona, did not sign on to the original Medicaid program until 1982-nearly twenty

years after Medicaid became law.

The Arizona story is instructive in its details as well. The state's initial refusal to create aMedicaid program was

grounded both in its antigovernment culture and also in the state's extensive county-funded public hospital

system.Why create a new state-federal program when a locally funded safety net already was in place? In the late

1970s, however, the state enacted restrictions on property tax increases, thereby making it difficult for counties to

raise revenue needed to fund public hospitals. In response, state officials eventually agreed to join the Medicaid

program, but with two conditions: First, the entire program would be run through a managed care delivery system,

and second, the nonfederal share of the cost would be paid by local governments. Bottom line: Arizona joined

Medicaid but did so under its own terms.18

Fast forward to today, where several states have conditioned their participation in the ACA Medicaid expansion on

federal waivers that permit significant variation in the scope and nature of their participation. Arkansas and Iowa,

for example, are using the additional federal Medicaid dollars to purchase private coverage on the insurance

exchanges, or Marketplaces, for expansion enrollees.19 Other states that have not yet adopted the expansion are

negotiating with federal officials for permission to implement their own initiatives. Indiana, for example, seeks to

implement a consumer choice model under which expansion enrollees would receive funds in a health savings

account.20

Meanwhile, Medicaid is an increasingly important component of a transforming the US health care system.

Consider some of the key trends now under way: The system is consolidating (in search of leverage and

efficiency), becoming more integrated (as the line between provider and payer blurs), adding new players (from the

pharmacy chain CVS to community health workers), focusing more on care management and population health,

experimenting with new ways to reimburse providers, and seeking to make use of new health information

technologies and so-called Big Data. Medicaid is an important player in each of these arenas, because of both its

size and spending and its innovative efforts to finance system redesign initiatives.

One example of the purposeful effort to use Medicaid dollars to redesign the health delivery system is the Delivery

System Reform Incentive Payment (DSRIP) program now under way in half a dozen states, including New York,

California, and Texas.11 Under this initiative, the federal government provides supplemental Medicaid funding so

that states can reimburse groups of safety-net providers that implement innovative system transformation

projects. InNewYork, for example, $6.4 billion in supplemental federal funds will be used to support efforts in

"system transformation," "clinical improvement," and "population health improvement," all targeted at achieving a

25 percent reduction in avoidable hospitalization use over five years.21

At the same time, nearly every state is implementing some variation of a delivery reform initiative: efforts to

encourage patient-centered medical homes, home and community-based long-term care services, and Medicaid-

focused accountable care organizations. More generally, federal officials are promoting (and funding) numerous

delivery reform initiatives through new programs (such as the Medicaid Innovation Accelerator Program) and new

federal offices (such as the State Innovation Models Initiative that is part of the Center for Medicare and Medicaid

Innovation). Put simply, as Medicaid approaches middle age, it is finally learning how to use its purchasing power

to influence the health care it buys. And as the nation's largest health care purchaser, Medicaid is going to

increasingly exercise its buying power.22

Medicaid At 50: Interest Groups, Political Culture, And American Federalism

What best explains Medicaid's remarkable durability? Why has this program, rooted in welfare medicine, evolved so

that it soon will cover more than 25 percent of the population, 40 percent of all children, and 50 percent of all

births? How is it that Medicaid is not simply the best coverage option for the poor, the aged, and the disabled but

also increasingly the insurer of choice for middle-class workers and their families?

There clearly are several answers, including the nation's rising economic inequality, as well as policy makers'

growing appreciation of Medicaid's ability to provide decent coverage for populations and services that fit uneasily

into the traditional commercial market. Nonetheless, there also is old-fashioned politics, viewed through three

distinct lenses: interest-group dynamics, political culture, and institutions.

Interest Groups It is perhaps a cliché to point out that every one of the more than $2.8 trillion spent annually on US

health care is income to some person or some organization and that all of the players in the health care industry

are for reform, so long as their particular niche is protected. It also is commonly acknowledged that health care

providers are often dependent on Medicaid funding, and their dependence helps differentiate Medicaid politics

from its means-tested counterparts such as the Supplemental Nutrition Assistance Program, formerly food

stamps, in which low-income beneficiaries lack wealthy and influential backers. The program also draws

occasional support from large employers (expanded coverage relieves pressure to cover low-wage workers) along

with occasional opposition from organized medicine (although the physician voice is muted since relatively few

office-based doctors treat Medicaid enrollees than is the case in larger medical facilities).

State governments themselves also are an influential lobbying group, often acting as a relatively unified bloc,

assisted by the National Governors Association and similar organizations. The enhanced federal funding for the

ACAMedicaid expansion is the result of lobbying by the states. That enhanced funding, in turn, is the carrot that

likely will lead even the most conservative states to expand their programs.

Less often discussed, however, are the ways in which private insurers often support and benefit from Medicaid

expansions. Here, too, there is a noteworthy evolution and escalation of support. Prior to the 1990s, for example,

only a few states adopted Medicaid managed care initiatives, and most beneficiaries received fee-for-service

coverage. This changed in the mid-1990s, as nearly every state encouraged or required their young and healthy

beneficiaries to enroll in managed care. The insurer presence in Medicaid became even more pronounced

following the enactment of the ACA, especially with state efforts (in Arkansas and elsewhere) to use Medicaid

funding to purchase private coverage on insurance exchanges.

The commercial role in Medicaid is not without limits. For example, the early Medicaid managed care initiatives

generally excluded the older, sicker, and more disabled populations, largely because few managed care

organizations had the infrastructure or the experience to accommodate such populations. In addition, while most

states today seek to transition these highrisk and high-cost populations into managed care, these efforts are

harder, more complicated, and less likely to be done in collaboration with commercial insurers. Similarly, even the

Arkansas premium assistance program exempts the medically frail, the dually eligible (both Medicaid and

Medicare), and those with exceptional medical needs, all of whom are to remain in the traditional fee-for-service

program.19

Over the next several years the lines will continue to blur between longstanding Medicaid managed care, which

started in the 1990s, more recent Medicaid premium assistance programs that have been set up through waivers

granted by the Centers for Medicare and Medicaid Services under the ACA, and the health insurance exchanges

more generally. In this context, commercial insurers will continue to work with providers and public payers in an

effort to keep these markets growing.

Political Culture That slippery concept known as political culture is often cited as an obstacle to efforts at

comprehensive health reform. The idea is that Americans are particularly susceptible to claims that the federal

government is inept. The debate over health reform is often thus a proxy for a more general debate over the role of

government, particularly the federal government, as well as an opportunity to engage in rhetorical debates over the

merits of markets versus regulation. Not surprisingly, the 2009-10 reform debate featured plenty of

antigovernment rhetoric, including claims that the legislation was part of a more general effort to take over the

entire American economy, somehow connecting bank bailouts to health reform.

In this context, Medicaid provides a partial counterweight to charges of a federal takeover: The public insurance

expansions in the ACA are through the state-administered Medicaid instead of the federal Medicare program. This

is consistent with thirty years of incremental Medicaid eligibility expansions, a period during which Medicare

eligibility did not expand at all.

To be sure, the ACA is not a state-based reform: It is a federal law that relies on intergovernmental partnerships.

Moreover, it was the US Supreme Court (and not Congress) that converted the Medicaid mandate into an option.

But there is little doubt that the state-based variation inherent in Medicaid minimizes the anti-big government

argument of reform opponents.

Institutional Dynamics Medicaid's intergovernmental partnership encourages state and federal officials to prompt

and prod each other to aggressively expand coverage and benefits. State officials can claim credit for the benefits

as they shiftmost of the cost to the feds, while federal officials can finance broad expansions as they delegate the

administrative burdens to the states. In other words, Medicaid federalism these days does not trigger Madisonian

checks and balances and government stalemate but instead leads to cost shifting and incremental expansions.

This dynamic, here called catalytic federalism, helps explain the program's key role in the ACA.

At the same time, however, by fragmenting decision making among state and federal officials, the Medicaid model

also provides numerous windows of opportunity for policy makers to implement their policy preferences. And as

the program has grown,manyof these policy makers have become increasingly appreciative of its virtues, many of

which extend far beyond those so far described here, including its role as the nation's primary payer for long-term

care services, its core role in financing community-based services for the disabled, and the ways it fills many of the

gaps inherent in a system built largely around employer-sponsored commercial coverage.

Medicaid And The Transforming US Health System

Medicaid has changed dramatically over the past fifty years. It is no longer the welfare medicine afterthought-the

state-administered little sister to a federal Medicare program presumed by liberals to offer the best path to an

American system of universal insurance.

Medicaid's growth was not inevitable and may not continue forever. From 1965 until the mid- 1980s, Medicaid

earned its moniker as a poor program for poor people. During that era there was minimal interest-group support,

and states generally used their discretion to restrict eligibility, limit benefits, and underpay providers. Over the past

thirty years, however, the political dynamics have changed, and the program has grown exponentially both during

conservative Republican and liberal Democratic administrations.

Although it is not inevitable, Medicaid is most likely going to continue its remarkable growth. The interest-group

support is not likely to fade, even if conservative politicians and underpaid office-based physicians remain

opposed. Similarly, the US Supreme Court decision converting the ACA mandate into a state-controlled option may

provide an unexpected and unintended political benefit, minimizing complaints of a monolithic national program

and strengthening the program's political support. Medicaid's intergovernmental financing structure also will

continue to encourage expansion; the federalist catalyst here is unlikely to disappear. Finally, politics aside, state

Medicaid programs are now using their massive purchasing power to redesign the health care delivery system.

Here again, the program's federalist structure encourages innovations that are likely to meet the needs of diverse

local markets.

At the same time, the program has its own set of deeply rooted challenges. Provider reimbursement remains low,

and efforts to raise rates conflict with imperatives to contain costs. Most office-based doctors still are reluctant to

participate, while institutional providers seek a payer mix in which commercial (and even Medicare) revenue cross-

subsidizes Medicaid funding. The low rates, combined with the welfare legacy, contribute to the ongoing stigma

that is still attached to the program. In turn, the stigma contributes to the large numbers of people who are eligible

for coverage but are not enrolled.

Going forward, Medicaid officials will continue to grapple with the need for better outreach and education, stigma,

and underpaid providers. Even with these challenges, however, Medicaid continues to be the most cost-effective

and politically feasible way to provide coverage to a lowincome population, and perhaps to many middle- class

workers as well. For this reason, it is likely to continue to grow over the next fifty years, in ways hard to imagine

today. Moreover, this is good policy: The program provides decent health insurance, encourages state-based

innovation, and is an important part of the effort to create a better and higher-quality health care delivery system.

Sidebar

With the enactment of CHIP and the ongoing Medicaid expansions, the number of people eligible but unenrolled

came to the fore.

Like the Energizer Bunny, Medicaid kept going (and growing) even during an era of conservative control and

economic distress.

It was the Affordable Care Act that firmly established Medicaid's role as the nation's largest and fastestgrowing

health insurer.

29 States

As of mid-May 2015, twenty-nine states plus the District of Columbia had implemented a Medicaid expansion

under the ACA.

Although it is not inevitable, Medicaid is most likely going to continue its remarkable growth.

Footnote

NOTES

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Washington (DC): The Commission; 2015 Feb [cited 2015 May 29]. Available from: http://files.kff.org/

attachment/fact-sheet-medicaidexpansion- in-indiana

21 New York State Department of Health. Delivery System Reform Incentive Payment (DSRIP) program [Internet].

Albany (NY): New York State Department of Health; 2015 [cited 2015 May 7]. Available from:

https://www.health.ny.gov/health_ care/medicaid/redesign/dsrip/

22 Smith VK, Gifford K, Ellis E, Rudowitz R, Snyder L. Medicaid in an era of health and delivery system reform:

results from a 50-state Medicaid budget survey for state fiscal years 2014 and 2015 [Internet]. Menlo Park (CA):

Henry J. Kaiser Family Foundation; 2014 Oct [cited 2015 May 7]. Available from: http://kff.org/medicaid/report/

medicaid-in-an-era-of-healthdelivery- system-reform-results-froma- 50-state-medicaid-budget-surveyfor- state-

fiscal-years-2014-and-2015/

AuthorAffiliation

Michael S. Sparer (mss16@ columbia.edu) is a professor and chair of the Department of Health Policy and

Management at the Mailman School of Public Health, Columbia University, in New York City.

DETAILS

Subject: Medicaid; Influence; Politics; Interest groups; Federalism

Location: United States--US

Company / organization: Name: Centers for Medicare &Medicaid Services; NAICS: 923120

Classification: 1200: Social policy; 8320: Health care industry; 9190: United States

Publication title: Health Affairs; Chevy Chase

Volume: 34

Issue: 7

Pages: 1084-1091

Number of pages: 8

Publication year: 2015

Publication date: Jul 2015

Section: MEDICAID'S CHANGING ROLE

Publisher: The People to People Health Foundation, Inc., Project HOPE

Place of publication: Chevy Chase

Country of publication: United States, Chevy Chase

Publication subject: Insurance, Public Health And Safety

ISSN: 02782715

Source type: Scholarly Journals

Language of publication: English

Document type: Feature

Document feature: References

LINKS Check SFX for Availability

Database copyright  2020 ProQuest LLC. All rights reserved. Terms and Conditions Contact ProQuest

DOI: http://dx.doi.org/10.1377/hlthaff.2015.0083

ProQuest document ID: 1695969883

Document URL: https://search.proquest.com/docview/1695969883?accountid=27495

Copyright: Copyright The People to People Health Foundation, Inc., Project HOPE Jul 2015

Last updated: 2017-11-22

Database: Social Science Premium Collection