Chapter 11: Government Insurance Programs - Medicaid, CHIP, and Medicare

managed care

-providers paid according to contracts between the state and the managed care organization --Require beneficiaries to enroll in these plans except ---Children with special healthcare needs, Native Americans, and Medicare recipients -Beneficiaries still entitled to all Medicaid benefits

-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.

3 options for CHIP structure

A: hospital insurance B: supplemental medical insurance C: managed care D: prescription drug coverage

4 parts of Medicare

medicaid

A federal-state public health insurance program for the indigent

Part D: Prescription Drug Coverage

May receive through private drug plans or managed care arrangement

-Mandatory populations and benefits -Optional populations and benefits

Medicaid - Joint Regulation (fed gov.)

•Each state has their own Medicaid agency •File a Medicaid State plan with federal government -Eligibility rules, benefits, other program requirements •Every state has a different Medicaid program

Medicaid - State regulation

-Must follow mandatory guidelines -Choose which optional guidelines they will include -Seek waivers •Experiment with coverage and benefit design -Still receive federal funds

Medicaid - joint regulation (state gov.)

•Statues •Regulations •State Medicaid Manual (contract between state and federal governments, such as for benefits) •Policy guidance -Letters to State Medicaid directors

parts of Medicaid (federal regulation)

Center for Medicare and Medicaid Services (CMS)

program administration of medicaid: federal

state Medicaid agencies

program administration of medicaid: state

-Prospective payment system based on diagnosis •Diagnostic Related Groups for inpatient care •Ambulatory Payment Classification for outpatient care

provider reimbursement for hospitals

-Capitated rate negotiated by the federal government -Payments 14% higher than FFS -Adhere to the 85% Medical Loss Ratio

provider reimbursement for managed care

Fee-for-service basis according to a Medicare fee schedule

provider reimbursement for physicians

-coverage of certain treatments -healthcare innovations things decided to be done in public insurance often trickles into changes in the private sector as well, if its proven to be effective

public to private exchanges

comparability

requirement purpose: all categorically needy beneficiaries in the state are entitled to receive the same benefit package in content, amount, duration, and scope 1937 changes to requirement: states may apply benchmark or benchmark-equivalent packages to some, but not all, populations

statewideness

requirement purpose: in most cases, states must provide same benefit package in all parts of the state 1937 changes to requirement: states may apply benchmark or benchmark-equivalent packages to some, but not all, populations

jointly by the federal and state governments

how is Medicaid financed?

sustainable growth rate

if the actual spending is higher than the target then the payment rates are cut, if actual spending rates are lower then target level payment rates are raised to provide incentives

reasonableness

requirement purpose: states must provide all services to categorically needy beneficiaries in sufficient amount, duration, and scope to achieve its purpose 1937 changes to requirement: states only have to meet amount, duration, and scope requirements found in the named benchmark equivalent plans

300%

states may cover children up to ___________ Federal Poverty Level (FDL)

immigrants

still have 5 year bar but states have option to cover legal immigrant pregnant women and children who have been in the country > than 5 years

-Choosing between state flexibility and national uniformity -Determining the appropriate role for government, private sector, and individuals in -Defining a primary decision making goal -Determining appropriate scope of coverage to offer beneficiaries

tension considerations

minority

the ___________________ populations largely make up enrollees of Medicaid

-Largest enrolled HMO plan in the state -Standard Blue Cross/Blue Shield PPO plan for federal employees -State employee health plan -Package that is actuarially equivalent to one of the above plans -Covered packed approved by HHS secretary

the five benchmark health plans CHIP benefit packages are based on

Part C: Managed Care

-Same services (sometimes receive additional services) delivered through a managed care arrangement -includes other types of plans as well •Private FFS ppans •High-deductible plans with HSA's •County-based PPO's •Point of service plans

•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. -Use CHIP funds to cover the costs of private insurance •Reduce state costs •Reduce private insurance crowd out

CHIP waivers use

Medicaid, not CHIP

Children who are eligible for Medicaid must be enrolled in ________________, not __________________

residency

Individual must be a U.S. resident and a resident of the state in which they are seeking benefits

Yes

do all states participate is Medicaid?

sicker and more disabled (but they are still better off than those who are uninsured)

Medicaid enrollees are still _________________________________ than the privately insured

federal and state governments

Medicaid is administered by both..

•waiting periods, enrollment caps, and other measures to limit expenses. -Avoid private insurance crowd out.

(for CHIP) States may impose...

Fee-for-service

-providers paid on a state-determined fee schedule --"equal opportunity"

-Newly eligible individuals entitled to essential health benefit package, not traditional Medicaid services

Affordable Care Act Changes to Medicaid: Benefits

6-19

Also, must cover all children _________ at 133% of poverty

immigration status

Been in the country for at least 5 years

State Children's Health Insurance Program

CHIP stands for..

Medicare

•A federally-funded health insurance program for the elderly and some persons with disabilities.

Health Insurance Flexibility and Accountability Act

•Integration of Medicaid and CHIP with private insurance -Premium assistance program and other means -Trade off- covering more people with fewer services or fewer people with more services

waivers

•States may apply to the federal government for _____________ of Medicaid requirements

•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

ACA Changes to Medicare

-New coverage for preventive services -Bonus payments for primary care services -Assistance in paying for prescription drugs -Reduced reimbursement for providers -$533 billion dollars in savings; $105 billion dollar in new spending; overall net reduction of $428 billion dollars over 10 years

ACA changes to Medicare

-All children aged 6-19 must be covered up to 133% of FPL under Medicaid program -Children in families at the 133% of FPL currently in CHIP will have to move to Medicaid

ACA changes with CHIP

-Federal government pays 100% of newly eligible expansion for two years then phases down to covering 90% by 2020

Affordable Care Act Changes to Medicaid: financing

Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)

•Scraped the SGR formula •Provided physician additional reimbursement •Created a new reimbursement structure tying payment to quality -2015-2019: 0.5% annual update and then maintain level from 2019-2025 -Supplement if participate in new Merit-Based Incentive Payment System = 1% update

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.

categorical

Individual must fit within a category covered by the program

-Do not have to fit a category -Standardized resource test -Must use federal income level calculation

Newly eligible only have to meet income requirements

-Verify citizenship status electronically •Social Security office •Application to other public programs (express lane eligibility)

Streamlined enrollment and improve outreach

reimbursement

-vary by state and type of provider --States have a lot of discretion in setting rates

elderly and disabled

Medicare covers two main groups of people

Title XXI of Social Security Act in 1997

-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 •Funding through 2015 -April 2015 - Obama signed legislation that provided two more years of funding (through 2017) for CHIP

CHIPRA

-Coverage of pregnant women -Lawfully residing immigrant pregnant women and children in the US for <5 years

Part B: Supplemental Medical Insurance

-Physician services, outpatient services, limited preventive services -Voluntary for enrollees

beneficiary cost-sharing

-Prior to DRA, very limited cost-sharing allowed -DRA provides expanded cost-sharing options

Section 1115 waivers (Social Security Act)

-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 •Typically with fewer Medicaid requirements •Cost can not exceed that of which traditional Medicaid would cost over a 5 year period

Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA)

-Severely restricted immigrant eligibility for Medicaid •Legal immigrants are not eligible for the first 5 years in the U.S. -Legal and undocumented immigrants who are otherwise eligible for Medicaid can receive emergency care -2009 change to CHIP reauthorization lead to states having the option to cover in the first 5 years •Legal immigrant children and Legal immigrant pregnant women

Independent Payment Advisory Board (established by ACA)

-Task: submit proposals to reduce the rate of Medicare spending if Medicare exceeds specified targets -Prohibits proposals that: •Ration care, increase revenue, change benefits, change eligibility, or change cost sharing -No confirmed members of the board

65

All non-Medicare eligible adults under ________ with incomes up to 133% of poverty will be eligible in every state that choses to expand

•States receive payments in 2-year allotments -Based on actual spending of CHIP funds -Increase annually to account for growth in •Healthcare spending •Increases in number of children in the state •State program expansions -Structure has financial implications -Cost-Sharing requirements •5% of family's annual income -At or above 150% FPL

CHIP financing for the states

income level

Individual or family must earn no more than the relevant income limits (ex: 133% FPL)

resources

Individual or family must not have nonwage assets that exceed eligibility limits (car, household goods)

Part A: Hospital Insurance (automatically given) and then can choose remaining parts of plan

Inpatient hospital, skilled nursing facility, hospice

Fiscal restraint Equity/social justice Improved health outcomes Uniformity

Defining a primary decision making goal (parts)

Health care financing and delivery

Determining the appropriate role for government, private sector, and individuals in..

matching system

Federal Medical Assistance Percentage (FMAP) determines the matching rate; rate is tied to each state's per capita income with poorer states receive a higher federal match, and must be at least 50/50; range from 50-73.6%

CHIP match will always be higher than the state's Medicaid match

Federal-state matching program -- "enhanced match"

-nursing home care (31) -hospital care (18) -total health services and supplies (16) -professional services (8) -prescription drugs (7)

Medicaid provides support for providers and support chart order -- highest to lowest

-Understand which populations utilize the most services -Which services are utilized most frequently -Which services and populations are most costly

Medicaid-spending (policymakers considerations)

•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 under 21 years of age. •Any accepted treatment should be covered due to the *Correct and Ameliorate principle* -Typically more generous than private insurance plans

Medicaid: Benefits

•CMS -No state administration -National rules, apply uniformly in all states

Medicare is administered by ...

•2014, $600 billion dollars -Accounts for 14% of total federal budget -20% of total personal health expenditures •2024, projected to increase to $858 billion, aggregate growth of 5.3% •2010: 10% of all beneficiaries account for 58% of Medicare expenditures

Medicare spending summary

-Pregnant women -Children -Adults in families with dependent children -Individuals with disabilities -Elderly

What low-income individuals does Medicaid generally cover?

-Must provide "basic" benefits Inpatient and outpatient hospital care Physician services Laboratory X-ray Well-baby & well-child Immunizations Dental care --Dental-only supplemental coverage for otherwise eligible children who have health insurance without dental coverage -May provide additional benefits Prescription drugs, Mental health, vision, and hearing

benefits of CHIP

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.

•Individual who have extremely high medical expenses •Individuals who fit into a covered category but make too much money to be otherwise eligible •Income requirements -Spend down principal •Asset Requirements

description of medically needy

-Individual is totally and permanently disabled and has received Social Security Disability Insurance for at least 24 months OR -Has End Stage Renal disease -Has amyotrophic lateral sclerosis (ALS) -No age requirement or waiting period

disabled requirements for Medicare

-Medicare advantage (26%) -hospital inpatient services (23%) -other services (14%) -physicians payments (12%) -etc.

distribution of Medicare benefit payments

-At least 65 years old -Eligible for Social Security by having worked and contributed to Social Security for at least 10 years --Or spouses eligibility

elderly requirements for Medicare

•10% of cost of services from 100-150% of FPL •Premiums and 20% of cost of services for >150% FPL •Aggregate may not exceed 5% of family's income •Enforceable

expanded cost sharing options provided by DRA

-Trust fund funded through a mandatory payroll tax •Employers and employees pay a tax of 1.45% of a worker's earnings •Individuals who earn over 200,000 and couples who earn over 250,000 pay 2.35% (ACA) -Deductibles and cost-sharing paid by beneficiaries

financing Part A of Medicare

-General federal tax revenues -Monthly premiums, deductibles, and cost-sharing paid by beneficiaries

financing Part B of Medicare

-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

financing Part C of Medicare

-General federal tax revenues -Monthly premiums, deductibles, and cost-sharing paid by beneficiaries -State payments for dual enrollees

financing Part D of Medicare

categorical income level resources residency immigration status

for Medicaid services, one MUST meet five eligibility requirements:

•CHIP is needed in states that have not expanded Medicaid to assist low-income families •CHIP is more affordable than many plans offered through state exchanges •Estimated 2 million children live in families who are not eligible for subsidies to purchase insurance through an exchange •States will have increased costs due to ACA's Medicaid expansion •Individual mandate -Children may be moved to less generous and more expensive coverage

future of CHIP

Medicaid reimbursement

is typically much lower than private insurance or Medicare reimbursement

non-discrimination

requirement purpose: states may not discriminate against a beneficiary based on diagnosis, illness, or type of condition by limiting or denying a mandatory service 1937 changes to requirement: DRA does not include language changing Medicaid non-discrimination rules and ACA includes non-discrimination protections regarding age, expected lifespan, diagnosis, disability, medical dependency, quality of life, or other health condition

maintenance of effort

states have a _______________ _____ __________ requirement for adults and children

-Dual enrollee or dual eligible (elderly that are enrolled in both Medicaid and Medicare) ~ 10 million individuals

what are elderly people eligible for?

all of them

what states participate in CHIP?

Medicaid programs

which offers more comprehensive benefits? Medicaid programs or stand-along CHIP programs

income

with the Medicaid expansion people were able to enroll based solely off of ...

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. -No spending cap

CMS

•outlines mandatory and optional populations and benefits covered under Medicaid.

state Medicaid agencies

•run programs • select which optional populations and benefits to cover in the state program.