rewriting work eco week 2
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medicaid.pptx
Medicaid Expansion Under “The Affordable Care Act”
Agenda
Intervention and its history
Arguments for government intervention as opposed to arguments for market-based solutions.
Who may be helped and who may be hurt by the intervention
Externalities and/or unintended consequences of such intervention
Determine the cost trend
Evaluate the success or failure of the intervention
Recommendations for the program
History
In 2014, The Affordable Care Act (ACA) leveraged Medicaid’s role in serving the poor to broaden the program’s reach to millions of low-income uninsured adults, and positioned the program as a fundamental component of the newly established continuum of public and private coverage.
Authorized by Title XIX of the Social Security Act, Medicaid was signed into law in 1965 alongside Medicare by President Lyndon Johnson. All states, the District of Columbia, and the U.S. territories have Medicaid programs designed to provide health coverage for low-income people. Although the Federal government establishes certain parameters for all states to follow, each state administers their Medicaid program differently, resulting in variations in Medicaid coverage across the country. Beginning in 2014, the Affordable Care Act provides states the authority to expand Medicaid eligibility to individuals under age 65 in families with incomes below 133 percent of the Federal Poverty Level (FPL) and standardizes the rules for determining eligibility and providing benefits through Medicaid, CHIP and the health insurance Marketplace (Rowland, D. & Lyons, B., 2016).
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Arguments
Millions without health insurance
Good Financial Deal for the State
Economic Impact
There are millions of individuals without insurance and the bills are left for the state to take care of. So by created the Medicaid expansion through the Affordable Care Act (ACA), millions of Americans will be able to afford insurance or receive quality care through the Medicaid expansion for their state opt-in.
The enhanced federal match of 100% for the first three years (2014-2016) and thereafter 90% to 95% is a good financial deal for the state. This is far higher than the 50 percent to 77 percent states now receive for rest of Medicaid benefit spending. While a future Congress could renege and reduce or eliminate the enhanced federal match rate for the ACA expansion population, a state could then presumably opt out. Also, a state could opt in for only the three years with 100% federal funding, setting up a sunset provision to automatically opt out in 2017. Many Americans in Louisiana could not receive health insurance because the previous Governor of the state, Bobby Jindal, chose to not opt-in. It wasn’t until the present Governor, John Bel Edwards decided to signed the bill for the expansion, so the state could receive monies from the ACA Medicaid expansion. By opting for ACA Medicaid expansion, many states will see well over $1 billion in new federal funds annually, with a corresponding stimulus effect. The additional federal funding will lead to new jobs, tax revenues from for-profit providers and health plans, and other direct and indirect economic benefits to the state (Rowland, D. & Lyons, B., 2016).
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Arguments (cont’d)
Impact on Hospitals
Health Benefits of Health Insurance Coverage
Health Disparities Reduction
Hospitals already face serious financial pressures are a result of uncompensated care, bad debts, and payment cuts. This is unsustainable and threatens access to care for everyone – both the insured and uninsured. Physicians and other health care providers also face financial pressures but hospitals, particularly safety net facilities, are in serious trouble. Medicaid eligibility expansion will bring in new, much needed revenue and significantly reduce uncompensated care.
Insured individuals are more likely to receive needed care and preventive screens, thereby lowering future medical costs. Since healthy individuals make for more productive employees, increased health coverage also improves employability, reduces absenteeism and presenteeism, and thus boosts workforce productivity and competitiveness. While designed for low-income uninsured adults, the ACA Medicaid eligibility expansion will boost coverage for poor children too. To receive Medicaid under the expansion option, parents must ensure their children are covered. This will increase the number of children with health coverage.
In many states, the low-income uninsured population and therefore the Medicaid expansion population is disproportionately minority. Therefore, non-expansion would unfairly hurt the state’s African American, Hispanic, and Native American citizens. In terms of medical care, Medicaid expansion is also needed to help reduce racial, ethnic, and geographic disparities in health care access and quality (Rowland, D. & Lyons, B., 2016).
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People helped versus People hurt
Low income families, qualified pregnant women and children, and individuals receiving Supplemental Security Income (SSI) and individuals with disabilities.
Unfair to state taxpayers and the state’s African American, Hispanic and Native American citizens if state’s do not opt-in.
States that choose not to opt-in, would hurt the state’s African American, Hispanic, and Native American citizens. As federal taxpayers, residents of non-expansion states will be further subsidizing the residents, employers, and providers of expansion states. It is important for the state to opt into ACA Medicaid expansion to bring back those federal dollars to the state. Otherwise the funding will merely go elsewhere (Rowland, D. & Lyons, B., 2016).
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Positive Externalities
Health Affects Wealth
Technology and Information
Vaccinations
Healthy workers are absent from work less and are more productive workers. A health care market effectively helps workers can lead to positive economic gains. The study of health care, and the research involved in generating new solutions, has dramatically increased the knowledge and technological capacity of society in general. This has affected other industries, as research and development in health care affects the technological efficacy in other markets. An interesting new development in health care is the advent of vaccines. Vaccination results in herd immunity, or essentially the fact many individuals will become immune and thus reduce the likelihood everyone in the population will contract certain diseases (Boundless, 2016).
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Negative Externalities
Infectious Disease
Environmental Degradation
Antibiotic Resistance
One of the largest reasons why health care is so critical is the fact diseases are infectious. Untreated disease will result higher population vulnerability to the disease due to increased exposure. Health care produces a great deal of chemical waste, requires a great deal of emissions (ambulances, etc.) and alters the natural ecological environment of bacteria. An interesting byproduct of the newer solutions to medical dilemmas is the slowly growing resistance of antibiotics in bacteria. Due to the way in which the health care industry has been operating, bacteria are dramatically altering to resist our solutions (Boundless, 2016).
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Cost trend
Since its inception in 1965, the Medicaid program has grown to become a major payer in the health care system, accounting for almost $500 billion in combined federal and state spending for fiscal year (FY) 2014. Although Medicaid accounted for about 16 percent of U.S. health care spending in calendar year (CY) 2014, it accounted for a smaller share of national health expenditures than Medicare (20 percent) and private insurance (33 percent). Health spending totaled $74.6 billion in 1970. By 2000 health expenditures had reached about $1.4 trillion and in 2015 the amount spent on health had doubled to $3.2 trillion. Total health expenditures represent the amount spent on healthcare and health-related activities (such as administration of insurance, health research, and public health), including expenditures from both public and private funds (Stark, R., 2015).
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Success for Medicaid Expansion
Provides health coverage for 97 million low-income Americans.
Help cut the number of uninsured Americans.
Cost-effective program.
Medicaid is now an essential and popular part of the nation’s health care system, providing quality health coverage for 97 million low-income Americans. The program has helped to cut the number of uninsured Americans from 45 million in 2013 and is an cost-effective program with high participation, which provides significant support to low-income beneficiaries (Boundless, 2016).
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Recommendations for the program
Encourage states to undertake the Medicaid expansion offered in the Affordable Care Act.
Structure health insurance exchanges.
Recommendation 1
The administration should aim to encourage all states to elect the Medicaid expansion. The four million people who are at risk of not gaining Medicaid coverage are low-income individuals. Low-income is associated with worse health status, so that both poor children and adults need significant medical care for a range of acute and chronic conditions. Most of these individuals cannot afford to pay out-of-pocket for medical care, so they frequently seek care from hospital emergency rooms, where federal regulations require that patients be examined and receive stabilizing treatment if necessary. The care is an financial burden on hospitals, most are financed by local, state and federal taxpayer dollars. Receiving Medicaid coverage for these patients would facilitate their ability to obtain care from medical clinics and outpatient facilities. This would lead to more coordinated care, which would improve the patient’s overall health and reduce inefficient expenditures in the health care system (Nocon, R. S., Sang Mee, L., Sharma, R., Ngo-Metzger, Q., Mukamel, D. B., Yue, G., & ... Huang, E. S., 2016).
Recommendation 2
Structure health insurance exchanges that facilitate active purchasing in those states have failed to create their own exchanges. The state-based health insurance exchanges legislated under the Affordable Care Act are designed to increase access to health insurance for individuals who are unable to purchase affordable insurance through their employer and small business purchasers (Nocon, R. S., Sang Mee, L., Sharma, R., Ngo-Metzger, Q., Mukamel, D. B., Yue, G., & ... Huang, E. S., 2016).
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Conclusion
In conclusion, having health insurance is important for several reasons. Uninsured people receive less medical care and less timely care, they have worse health outcomes, and lack of insurance is a fiscal burden for them and their families. The Medicaid expansion under the Affordable Care Act allowed many Americans to receive health insurance whom would not have qualified. Although penalties of not having insurance will help offset the cost hospitals bare from uninsured individuals, it will remain unfair to state taxpayers if states choose to not opt-in.
References
Blumberg, L. J., & Holahan, J. (2016). Early Experience with the ACA: Coverage Gains, Pooling of Risk, and Medicaid Expansion. Journal Of Law, Medicine & Ethics, 44(4), 538-545. doi:10.1177/1073110516684784
Centers for Medicare and Medicaid. (2017). Retrieved from https://www.cms.gov
Boundless. “Externalities in the Health Care Market.” Boundless Economics Boundless, 26 May. 2016. Retrieved 27 Mar. 2017 from https://www.boundless.com/economics/textbooks/boundless-economics-textbook/health-care-economics-35/introducing-health-care-economics-135/externalities-in-the-health-care-market-534-12631/
Google. (2017). Medicaid Expansion Images. Retrieved from https://www.google.com/
Nocon, R. S., Sang Mee, L., Sharma, R., Ngo-Metzger, Q., Mukamel, D. B., Yue, G., & ... Huang, E. S. (2016). Health Care Use and Spending for Medicaid Enrollees in Federally Qualified Health Centers Versus Other Primary Care Settings. American Journal Of Public Health, 106(11), 1981-1989. doi:10.2105/AJPH.2016.303341
Rowland, D. & Lyons, B. (2016). Medicaid’s role in Health Reform and Closing the Coverage Gap. Journal of Law, Medicine and Ethics. Retrieved from: http://web.a.ebscohost.com.contentproxy.phoenix.edu/ehost/pdfviewer/pdfviewer?sid=43dda548-0de4-41c9-81b9-9f19ec6873a0%40sessionmgr4006&vid=3&hid=4212#
Stark, Roger (2015). Healthcare reform: Lowering costs by putting patients in charge. Retrieved from http://www.washingtonpolicy.org/publications/details/health-care-reform-lowering-costs-by-putting-patients-in-charge
