Introductionto Medi Cal by vICa5Ok


									  National Association for
    Medicaid Program
Stan Rosenstein, Chief Deputy Director of Programs
California Department of Health Care Services

   What is Medicaid and why is it
   Who does Medicaid serve?
   What does Medicaid cost?
   How can we control Medicaid costs?
What is Medicaid and
Why is it Important?
Medicaid in 2007:
A State – Federal Partnership

    $337 billion and over 60 million lives,
    the largest health program in America
     – 29 million children (including 1.5 million
     – 16 million adults in families
     – 10 million persons with disabilities
     – 6 million persons age 65 or older
Source: CBO March 2006 Medicaid Baseline, HMA projections, State Health Facts at
Medicaid : 1/6 of U.S. Health

                                                                                           Part D

                                                                                     9%        After
       17%                17%                                                                  Part D
                                              12%                                    10%

 Total Personal Hospital Care            Professional      Nursing Home         Prescription
  Health Care                             Services             Care                Drugs

SOURCE: Cynthia Smith,, “National Health Spending in 2004,” Health Affairs,
January/February 2006. Based on National Health Care Expenditure Data for 2004,
CMS, Office of the Actuary, 2006
Medicaid: the “Utility Man”
of the U.S. Health Care Safety Net

   Mental health: over half of publicly financed care
   Public health and school based care
   Hospitals that serve the uninsured: special Medicaid
    “DSH” payments $16 billion in 2007
   Community Health Centers (CHC): Medicaid
    provides an average of 40% of CHC revenues
   More than 7 million low-income elderly and disabled
    are “dual eligibles”– on both Medicaid and Medicare
    – “Duals” account for 40% of Medicaid spending
Who Does Medicaid Serve?
Medicaid Serves

   More than 40% of non-elderly
    Americans living in poverty and about
    a quarter of the near-poor*
   More than 7 million of Medicare’s
    almost 44 million enrollees
   More than 40 million low-income
    children and parents, most of whom
    are in working families
*100-199% of FPL
SOURCE: Kaiser Family Foundation, Medicaid, A Primer, 2007.
Health Insurance Coverage of the
Non-Elderly by Poverty Level, 2005



                 66%                                            Employer/Other Private
                                                         89%    Medicaid/Other Public


                 18%                           18%        4%

                U.S.      <100%      100-       200-    300%+
                Total      FPL      199%       299%      FPL
                                     FPL        FPL

SOURCE: Kaiser Family Foundation, Medicaid, A Primer, 2007.
   Medicaid is a key source of coverage
    for low-income pregnant women
   Medicaid provides health and long-
    term care coverage for 8 million low-
    income Americans with disabilities and
    chronic illnesses
   Medicaid is the single largest source of
    long-term care coverage and financing
    in the U.S.
    – 6 of every 10 nursing home residents is
      covered by Medicaid.
    – Medicaid represents 40% of total long-
      term care spending in the U.S.
What Does Medicaid Cost?
   Medicaid spending per enrollee varies
    significantly by eligibility group
   Children and parents make up the
    majority of beneficiaries
   The disabled and the elderly account
    for the majority of expenditures
Medicaid Enrollees and Expenditures
by Enrollment Group, 2003
                   Elderly 11%

                                                          Elderly 28%
                  Disabled 14%

                   Adults 26%

                                                         Disabled 42%

                  Children 49%                            Adults 12%

                                                         Children 18%

                    Enrollees                       Expenditures on Benefits
                Total = 55 million                     Total = $234 billion

SOURCE: Kaiser Family Foundation, Medicaid, A Primer, 2007.
   States commit significant resources to
    their Medicaid programs
    – On average, states spend 18% of their
      general fund on Medicaid
    – Costs rise during an economic downturn
      as the number of uninsured increases
Total Medicaid Spending as a %
of Total State Budgets

                                                                      23%       25%
                                      20%             20%

  1985            1990            1995            2000           2005        2010
                                                              (Estimated) (Projected)

SOURCE: National Association of State Budget Officers, various reports.
2010 percentage projected by HMA.
State Tax Revenue and Medicaid Spending:
Annual Percentage Changes, 1997-2006

                    State Tax Revenue                Medicaid Spending Growth
                                8.2%                          8.3%
                      7.1%                                              7.4%
             6.1%                                                                 6.3%
   5.3%      6.6%     5.2%      5.1%      2.0%                         3.2%       5.3%
                                                   -7.8%      -3.5%

  1997      1998      1999      2000     2001      2002       2003     2004       2005   2006

NOTE: State Tax Revenue data is adjusted for inflation and legislative changes.
Preliminary estimate for 2006.
SOURCE: KCMU Analysis of CMS Form 64 Data for Historic Medicaid Growth Rates and
KCMU / HMA Survey for 2006 Medicaid Growth Estimates; Analysis by the Rockefeller Institute
of Government for State Tax Revenue.
Outlook: Medicaid Costs Tend to Increase
about as Fast as Overall Health Spending

   Medicaid spending as a share of national
   health spending will average 16.6 percent
   from 2006 to 2025 – roughly unchanged
   from the 16.5 percent in 2005.”

   (“Notwithstanding the anticipated decline in
   employer-sponsored health insurance and
   the long term care needs of the baby
SOURCE: Richard Kronick and David Rousseau, “Is Medicaid Sustainable? Spending Projections
for the Program’s Second Forty Years,” Health Affairs – Web Exclusive, February 23, 2007.
How Can We Control Costs in
Experts’ View: To Control Medicaid
Spending, Control Overall Health Costs

 “Medicaid is one purchaser in a larger health
 care market … the most effective way to
 control Medicaid spending growth is to
 pursue strategies to control overall health
 care spending growth.”

 Richard Kronick and David Rousseau, “Is Medicaid Sustainable?
 Spending Projections for the Program’s Second Forty Years,” Health
 Affairs – Web Exclusive, February 23, 2007.
Controlling Health Costs

   Focus on prevention and primary care
    to reduce the incidence of chronic
   Alternate health care delivery systems
    – Medical Case Management
   Limit services provided and recipient
   Program Integrity
   Program integrity partnership
   Program integrity equals value
Key Messages

   Medicaid is the largest health program in
    the United States and one of the most
    significant programs administered by the
   States have a huge stake in the future of
    Medicaid, particularly due to the limits of
    state fiscal capacity to sustain it.
   Medicaid has the potential to improve the
    health of beneficiaries that could help slow
    overall health costs and costs to Medicaid.
Key Messages, cont’d

   Program integrity is the foundation
    that makes it all work

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