Healthcare
Helpm31990
9781284151619_SLID_CH11.pptChapter 11
Government Health Insurance Programs: Medicaid, CHIP, and Medicare
Chapter Overview
- Provides a basic overview of the major public health insurance programs in the United States, including changes to the programs under the Affordable Care Act (ACA).
- Focuses on:
- Medicaid
- Children’s Health Insurance Program (CHIP)
- Medicare
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Entitlements Versus Block Grants
- Entitlement—Everyone who is eligible for and enrolled in the program is legally entitled to receive benefits from the program. Beneficiaries may not be refused service for lack of funds or other reasons.
- Block grants—Defined sum of money (often from the federal government to the states) is allocated for a particular program over a certain period of time. Beneficiaries may be refused service for lack of funds or other reasons. There is no legal entitlement to the benefits.
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Medicaid
- Overview: A federal-state public health insurance program for the indigent
- Program administration
- Federal: Center for Medicare and Medicaid Services (CMS) outlines mandatory and optional populations and benefits covered under Medicaid.
- State: State Medicaid agencies run programs, select which optional populations and benefits to cover in the state program.
- All states participate in Medicaid.
Medicaid: Eligibility
- Medicaid generally covers low-income:
Pregnant women
Children
Adults in families with dependent children
Individuals with disabilities
Elderly
- Must meet five eligibility requirements: categorical, income level, resources, residency, and immigration status
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Medicaid: Benefits
- Medicaid covers extensive acute care and long-term care benefits.
- Some benefits are mandatory, others are optional.
- Early and periodic screening, diagnostic, and testing services are a comprehensive set of mandatory services for children.
- Deficit Reduction Act of 2006 (DRA) created a new benefit option that allows states to use one of three benchmark or benchmark-equivalent options to set their benefit package.
Medicaid: Financing
- Medicaid is jointly financed by the federal and state governments
- Matching system
- Federal Medical Assistance Percentage determines the matching rate; rate is tied to each state’s per capita income with poorer states receiving a higher federal match, and must be at least 50/50
- Beneficiary cost sharing
- Prior to DRA, very limited cost sharing allowed
- DRA provides expanded cost-sharing options
Medicaid: Provider Reimbursement
- Reimbursement levels vary by state and type of provider.
- States have a lot of discretion in setting rates
- Fee-for-service providers paid on a state-determined fee schedule
- Managed care providers paid according to contracts between the state and managed care organization
- Medicaid reimbursement is typically much lower than private insurance or Medicare reimbursement
Medicaid: Waivers
- States may apply to the federal government for waivers of Medicaid requirements
- Section 1115 waivers
- Secretary of Health and Human Services may grant a Section 1115 waiver to allow for a research and demonstration project that “assists in promoting the objectives” of Medicaid
- Use states as “policy laboratories” to test health reform ideas
- Health Insurance Flexibility and Accountability Act
ACA Changes to Medicaid: Significant Eligibility Expansion
- All non-Medicare eligible adults under 65 with incomes up to 133% of poverty will be eligible in every state
- Do not have to fit a category
- Standardized resource test
- All children 6–19 at 133% of poverty
- Immigrants have 5-year bar; states have option to cover legal immigrant pregnant women and children who have been in the country less than 5 years
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ACA Changes to Medicaid
- Benefits
- Newly eligible individuals entitled to essential health benefit package, not traditional Medicaid services
- Financing
- Federal government pays 100% of newly eligible expansion for 2 years; phases down to covering 90% by 2020
- States have a maintenance of effort requirement for adults and children
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CHIP
- Overview: A 10-year, $40 billion block grant program designed to provide health insurance to low-income children whose family income is above the Medicaid eligibility level in their state
- Reauthorized in 2009 and extended in the ACA; authorization through 2019, separate bills fund through 2027
- All states participate in CHIP
CHIP: Structure
- Three options for CHIP structures
- Incorporate CHIP into Medicaid program as an expansion population
- Create separate CHIP program
- Hybrid program: Some CHIP children are in Medicaid and some are in a separate CHIP program
- All three options are used by the states
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CHIP: Financing
- Federal-state matching program
- “Enhanced” match: CHIP match will always be higher than the state’s Medicaid match
- States receive payments in 2-year allotments
- Rebased every 2 years to reflect actual use
- Higher cost sharing allowed as compared with Medicaid
CHIP: Eligibility
- States may cover children up to 300% Federal Poverty Level (FPL).
- Children who are eligible for Medicaid must be enrolled in Medicaid, not CHIP.
- States may impose waiting periods, enrollment caps, and other measures to limit expenses.
CHIP: Benefits
(1 of 2)
- CHIP programs must provide “basic” benefits.
- Inpatient and outpatient hospital care
- Physician services
- Laboratory
- X-ray
- Well-baby and well-child checkups
- Dental coverage or dental-only supplemental coverage
- CHIP programs may provide additional benefits such as prescription drugs, mental health, vision, and hearing.
CHIP: Benefits
(2 of 2)
- Benefit packages are based on one of five benchmark health plans.
- Similar to DRA option in Medicaid
- Overall, Medicaid programs generally offer much more comprehensive benefits than CHIP programs.
CHIP: Waivers
- States may apply to the federal government for waivers of CHIP requirements.
- States may cover pregnant women without a waiver, but no new waivers will be granted for other adults.
- States may also use waiver for premium assistance.
Medicare
- Overview: A federally funded health insurance program for the elderly and some persons with disabilities
- Medicare is administered by CMS
- No state administration
- National rules, apply uniformly in all states
Medicare: Eligibility
- Medicare covers two main groups of people: elderly and disabled
- Elderly requirements
- At least 65 years old
- Eligible for Social Security by having worked and contributed to Social Security for at least 10 years
- Disabled requirements
- Individual is totally and permanently disabled and has received Social Security Disability Insurance for at least 24 months, or
- Has end-stage renal disease
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Medicare: Benefits
(1 of 2)
- Medicare split into four parts, each with its own set of benefits
- Part A: Hospital insurance—inpatient hospital, skilled nursing facility, hospice
- Part B: Supplemental medical insurance—physician services, outpatient services, limited preventive services
Medicare: Benefits
(2 of 2)
- Part C: Managed care—same services (sometimes receive additional services) delivered through a managed care arrangement; Part C includes other types of plans as well
- Part D: Prescription drug coverage—may receive through private drug plans or managed care arrangement
Medicare: Financing
(1 of 2)
- Part A
- Trust fund funded through a mandatory payroll tax
- Deductibles and cost-sharing paid by beneficiaries
- Part B
- General federal tax revenues
- Monthly premiums, deductibles, and cost-sharing paid by beneficiaries
Medicare: Financing
(2 of 2)
- Part C
- Receives funding for Part A and B services through funding sources described above; plans may also require monthly premiums, deductibles, and cost-sharing to be paid by beneficiaries
- Part D
- General federal tax revenues
- Monthly premiums, deductibles, and cost-sharing paid by beneficiaries
- State payments for dual enrollees
Medicare: Provider Reimbursement
- Physicians
- Fee-for-service basis according to a Medicare fee schedule
- Hospitals
- Prospective payment system based on diagnosis
- Diagnostic-related groups for inpatient care
- Ambulatory payment classification for outpatient care
- Managed care
- Capitated rate negotiated by the federal government
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ACA Changes to Medicare
- New coverage for preventive services without cost sharing
- Eventually closes Part D doughnut hole
- Short-term relief as well
- Reimbursement changes
- Cost changes to beneficiaries
- Creation of Independent Payment Advisory Board
- CMS innovation center
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