#1 - Medicaid: From Origins to Impact

We delve into the world of Medicaid, exploring its origins, impact, and challenges. From its inception as a safety net for low-income individuals and families to its evolution under the Affordable Care Act, we uncover the milestones and misconceptions surrounding this vital program. Discover how Medicaid coordinates care, addresses social determinants of health, and adapts to changing population needs. We shed light on Medicaid Managed Care Programs, eligibility criteria, and the unique landscape across states. Through engaging discussions, we aim to dismantle stigmas and promote understanding of Medicaid's crucial role in providing accessible and quality healthcare for 1 in 5 Americans.

Timestamps: 
(00:00) Channel Intro 
(01:45) Episode Introduction 
(03:37) Healthcare Landscape Before Medicaid 
(09:08) Problems Before Medicaid 
(12:20) Policies Before Medicaid 
(15:21) Creation of Medicaid 
(17:00) Drawbacks of Medicaid Coverage 
(21:24) Federal-State Partnership
(24:08) Managed Care Programs 
(26:08) ACA and Medicaid Expansion
(31:37) Who is Eligible?
(35:33) How is it Funded?
(38:10) CHIP 
(43:09) Changes to Medicaid
(48:28) Quick Facts 
(50:05) Conclusion Summary 
(52:27) Outro

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Chapters

• 0:00 Channel Intro
• 1:45 Episode Introduction
• 3:37 Healthcare Landscape Before Medicaid
• 9:08 Problems Before Medicaid
• 12:20 Policies Before Medicaid
• 15:21 Creation of Medicaid
• 17:00 Drawbacks of Medicaid Coverage
• 21:24 Federal-State Partnership
• 24:08 Managed Care Programs
• 26:08 ACA and Medicaid Expansion
• 31:37 Who is Eligible?
• 35:33 How is it Funded?
• 38:10 CHIP
• 43:09 Changes to Medicaid
• 48:28 Quick Facts
• 50:05 Conclusion Summary
• 52:27 Outro

Transcript

Introduction

• Welcome to the first episode of the Gustavo Franco podcast. In this month’s episode, we will be discussing Medicaid. And this is actually a topic that I would like to discuss over two episodes. They can both be listened to independently, but in this episode I will explain medicaid and in the next episode of this series I will be joined by someone that is currently on Medicaid to share their experiences and also talk about the current events related to Medicaid. My goal here is to help everyone understand all of the current events happening in regards to Medicaid, and I’m sure you heard a lot about them as we neared a potential debt crisis we just had. So in this episode I will be introducing Medicaid and explaining everything about about it. We will dive into a brief history of healthcare system prior to medicaid, we’ll talk about how and why medicaid was created, how it evolved over the years, and what it looks like right now.
• But to start off I just want to make clear the distinction between Medicaid and Medicare because many people often confuse the two. Last week actually I had one of my friends talk about Medicaid but actually mean Medicare so I wanna share an easy way that I use to differentiate between the two. They are both programs created under the Social Security Amendments of 1965, but there is a key distinction between the two. Medicare is a health insurance program at the federal level for people over the age of 65 or with very debilitating health conditions such as end stage renal disease. Medicaid on the other hand operates as a joint federal and state program offering health insurance for those with limited income. SO how do you remember the two? I like to think of it as Medicaid - aid. who needs financial aid, those with low incomes. and then Medicare - care, who needs the most care? the elderly or those with very serious health conditions.

Creation of Medicaid

• Healthcare landscape before medicaid
  • To understand what led up to the creation of Medicaid, we should first examine the healthcare system that existed before Medicaid came about. We are gonna look at what the healthcare system looked like before medicaid, who the major players in health insurance were, and the major drivers that brought about the need for Medicaid.
  • To start off, the landscape of healthcare in the United States was quite different and we won’t dive into too much detail of the history of healthcare and insurance, which I will make an episode of its own for.
  • One thing from healthcare history that we will have to conceptualize to understand why Medicaid came about is the progression in healthcare cost, which happened as medicine evolved. I think many of us forget that healthcare has existed since forever but not in the form that we see today. What you see in movies is true to some extent, people used to brew plants and go in person to others houses and do rituals that were thought to help cure people of disease. In turn for the potions they would brew, patients would bargain other items such as bread for them. Then we began to have a slightly better service of professionals that went to patients house to treat them, even if there was no scientific backing to that treatment. To keep on the movie example, I’m sure you have seen movies of France in the 1500s were doctors would go to patients houses and do god knows what to them. That might be a little exaggeration but most of what they did was not scientifically backed yet. My point here is that healthcare services have always existed and it literally went from people brewing random plants and seeing a medical advantage to it, to people calling themselves doctors and going to patients homes and doing their best to treat them and comfort them. It was in the in the late 1800s going into the 1900s that healthcare services really boomed like the industrial revolution and hospitals with proper care began to be established.
  • As healthcare quality improved, so did its price, but it doesn’t end there because medical treatment has been improving and also becoming exponentially more expensive as we began to focus on treating chronic and late stage conditions. It’s crazy to think that something that people used to barter for with other goods, now accounts for 19% of our annual GDP. Everything related to healthcare has been increasing in price. Pharmaceuticals began to increase in price to pay off for all the research and trials that they ran through and failed, advancements in medical technology brought about new machines and scanners that cost unimaginable amounts of money, healthcare provider salaries are know for their extremely high salaries, and who has pays for all of that? The consumer of healthcare.
  • The prevalence of chronic diseases and the introduction of expensive diagnostics and therapies only made the rising costs worse. Our inefficient and fragmented healthcare system, along with insurance complexities, added to the financial burden. Demographic changes, like the aging population and lifestyle factors, also played a role. These all deserve an episode of their own but that is just a brief aside as to why healthcare costs were increasing and more and more people lacked access.
  • This really became a problem in the US as the population became more and more stratified with significant wage inequalities. Access to healthcare was primarily dependent on private insurance coverage or the ability to pay out-of-pocket. But this all became harder and harder and it meant that individuals and families with limited financial means often faced significant barriers to receiving necessary medical care. So as healthcare prices skyrocketed, it was clear who could and who couldn’t afford health insurance. But even if you couldn’t afford private insurance there were other ways that people were getting insurance even in the 1900s, so let’s look at what the health insurance market looked like before Medicare Medicaid.
  • One of the major sources of coverage was employer-based health insurance. Many Americans relied on this type of coverage, which was typically offered as a benefit by large employers and some smaller companies. Manufacturing companies and large corporations played a significant role in providing healthcare coverage to their employees.
  • Another significant presence in the private healthcare insurance landscape was commercial health insurance companies, which we still have today. Companies like Blue Cross Blue Shield, Aetna, Cigna, and UnitedHealthcare were among the major players. They offered a range of plans, including individual, family, and group plans purchased by employers. These insurers also catered to individuals and families outside the employer based system.
  • In addition to employer-sponsored and commercial health insurance, there were voluntary health insurance associations. These nonprofit organizations provided coverage to specific groups such as teachers, government employees, and other individuals affiliated with certain professions. For example, the American Medical Association (AMA) offered coverage to physicians, while the American Bar Association (ABA) provided coverage to lawyers, and the VHA offered coverage to the veterans.
  • However, it's important to note that private healthcare insurance before Medicaid had its limitations. Coverage was often costly and came with restrictions. Pre-existing conditions were commonly excluded from coverage, making it challenging for individuals with chronic illnesses or certain medical histories to obtain insurance. They did not have many of the ethical regulations that we now have, and people with serious conditions were many times left without insurance. Many private insurance plans also had high deductibles, co-pays, and exclusions, resulting in significant out-of-pocket costs for policyholders.
  • Access to private insurance was not universal and many disparities existed. While it's estimated that around 70-80% of the population had some form of private health insurance coverage, many individuals, particularly those in low-income or vulnerable populations, were uninsured or had limited access to affordable coverage. And even for those that had health insurance, it was hard for them to get access to quality care for all their needs because of the high out of pocket costs that I mentioned. This created a gap in healthcare access and affordability.
• What were the main issues with healthcare coverage that medicaid wanted to tackle
  • So as this issue of inadequate healthcare coverage gained increasing attention, policymakers finally recognized the urgent need to address the problem. The civil rights movement and the broader push for social justice only added to this and highlighted the disparities in healthcare among different socioeconomic groups.
  • Picture this: it's the 1960s, a time of change and transformation in American society. We have all these social rights activist movements, and as the nation moved forward, it became increasingly clear that not everyone had access to the healthcare they needed. Gaps in coverage left many vulnerable individuals and families struggling to afford essential medical services. Something had to be done and people knew about it and were distraught about, and that's where Medicaid enters the stage.
  • So to summarize what we’ve talked about, the main issue leading up to the creation of Medicaid was the following. There was a pressing need to address the millions of low-income individuals and families who couldn't afford private health insurance. These were hardworking people who found themselves caught in a web of limited resources and inadequate access to healthcare. They were left to navigate a complex maze of medical bills and impossible choices as the price of healthcare continued to rise and so did the income gap.
  • And not to add, the ever increasing healthcare costs, and the growing demand for healthcare services really strained the system and made it even harder for those with low incomes to get care without premium health insurances. So if demand kept increasing and price also kept increasing, it was clear that if it weren’t for a policy like that of Medicare and Medicaid, the healthcare insurance gap would have continued to get worse.
  • So it was against this backdrop that Medicaid emerged as a beacon of hope. The program was established under the Social Security Amendments of 1965, under President Lyndon B. Johnson. Medicaid was specifically designed to provide healthcare coverage to low-income individuals and families who fell through the cracks of the private insurance system.
• What other policies had tried tackle this problem
  • However, the Social Security Amendments of 1965 was not the first attempt at mitigating these disparities in healthcare access. Before the creation of Medicaid, several healthcare policies were implemented with the aim of expanding coverage and addressing the gaps in healthcare access. While these policies made significant strides, they still fell short of providing comprehensive and accessible coverage for all Americans. Let's explore some of these initiatives.
  • One notable policy that preceded Medicaid was the Kerr-Mills Act of 1960, also known as the Medical Assistance for the Aged program. This program provided federal funding to states to assist elderly individuals with limited financial means in accessing healthcare services. While the Kerr-Mills Act was a step towards addressing the healthcare needs of the elderly, it was limited in scope and did not provide comprehensive coverage.
  • Another significant healthcare policy was the Hill-Burton Act of 1946. This legislation aimed to improve the availability of healthcare facilities and services, particularly in underserved areas. Under the Hill-Burton program, federal funds were allocated to support the construction and modernization of hospitals and other healthcare facilities. In return, these facilities were required to provide a certain amount of free or reduced-cost care to individuals who couldn't afford to pay for services.
  • The Hill-Burton Act played a crucial role in expanding access to healthcare infrastructure in many communities. However, it focused primarily on facility development and did not directly address the issue of healthcare coverage for individuals who couldn't afford private insurance.
  • Additionally, during the Great Depression, the Social Security Act of 1935 was enacted, establishing a foundation for social welfare programs in the United States. While the Social Security Act did not directly provide comprehensive healthcare coverage, it laid the groundwork for future initiatives, including Medicaid.
  • Prior to the implementation of Medicaid, some states experimented with their own programs to expand healthcare coverage. For example, in 1961, the state of California introduced the California Medical Assistance Program (CMAP). CMAP aimed to provide healthcare coverage to low-income individuals and families who were not eligible for other government programs. This state-level initiative served as a precursor to the broader national Medicaid program.
  • Despite these efforts, the fragmented nature of these policies and programs meant that many individuals and families remained without adequate healthcare coverage. These policies tried to tackle very specific issues and failed to fix the root problem. The need for a more comprehensive and coordinated approach became increasingly evident.
  • The creation of Medicaid as part of the Social Security Amendments of 1965 was a significant milestone in expanding coverage to low-income individuals and families. Medicaid represented a federal and state partnership that aimed to provide a safety net for vulnerable populations and reduce disparities in healthcare access. Over time, Medicaid has undergone various expansions and modifications to increase coverage and improve access to care. But this, we will discuss later on. Let’s turn our focus back to the creation of Medicaid and the Social Security Amendments of 1965.
  • Medicaid's goals extended beyond mere coverage. It aimed to improve health outcomes for the most vulnerable populations. By providing access to preventive care, screenings, and early interventions, Medicaid sought to catch health issues before they escalated, promoting healthier lives and reducing the burden on emergency rooms.
  • And this is all for the history behind Medicaid and the creation of the program. We have laid the ground work to understand everything that we will now talk about so let’s now turn our focus to talk about what the program actually looks like right now.

Understanding Medicaid

• What does the Medicaid program look like right now
  • Even though the creation of Medicaid was very promising and so is the coverage that we now see, with 1 in 5 people being in medicaid we also have to consider some of the drawbacks of it. Medicaid participants have freedom of choice, in that they can go to any doctors that they want. But there is a catch, the doctor must be willing to accept medicaid insurance. Only about 70% of physicians accept medicaid and this varies greatly by state, with states like New Jersey only having about 40% of physicians accept medicaid. The disadvantage doesn’t end there. Even though around 70% of physicians accept medicaid, many of those are less likely to accept new patients that are on medicaid. But what is that? The answer lies mostly in reimbursement rates. Physicians get paid a lot less for medicaid beneficiaries and practices that accept medicaid tend to make less profit. Additionally, physicians have a lot more paperwork to do for medicaid patients, which makes them less likely to want new Medicaid patients.
  • Some of you might still be saying that sure 70% accepting medicaid is pretty good, but that also doesn’t mean that that physicians can’t still be more reluctant to accept new patients if they are medicaid patients and they know that they will get lower reimbursements. And this can be a problem, especially nowadays that physicians are always booked and is hard to find one that is taking new patients. Let me give you an example of myself, and keep in mind that all of this was done with having CIGNA, a private insurance, so everything that I say will be worse in the case of someone in medicaid. A couple of months ago I called to schedule a primary care visit at the hospital chain near Georgetown that I go to but they said that they only had appointments for new patients four months from then so I was like never mind I don’t wanna wait and just ended up not going to a primary care physician and instead just went to my schools student health center to get a general check up. Then earlier this week I decided I wanted to schedule an appointment to get a new primary care physician since I don’t have one right now so I called the hospital again. This time they told me all attending physician weren’t accepting new patients but that I could get an appointment with a 2nd year resident two months from now. And I said sure that’s great, it works for me. It’ll be someone closer to my age and this time it won’t take four months so I was happy about it but I can also see how many people wouldn’t love that. What if they wanted to see a doctor sooner. It’s pretty clear that even with private health insurances accessing quality care is difficult so just imagine how much harder it could be for people with medicaid.
  • And to be honest that’s not the only limitation. I still haven’t gone into prescriptions and out of pocket expenses. It’s actually pretty convenient because last weekend I was flying home and a woman sat next to me and we started talking about health insurance and she told me that she had been both on medicaid and medicare. She told me that condition that she had and I think it was Hirschsprung’s disease but don’t quote me on that. Bottom line is that it was something that affected her colon and she couldn’t pass stool so she had to get surgery and get colostomy bags. For those that don’t know what that is, it’s a bag that stays outside your body and connects to your intestine so that you can pass stool to the bag. Okay so getting into how this relates to medicaid, she told me she was had medicaid for a while a couple of years ago and sometimes it would give her trouble because it wouldn’t cover as many colostomy bags as she would have liked. Although she said this was also a problem with some private health insurances she had, it’s certainly not optimal because it meant she couldn’t change her bags as frequently as she would have liked.
• What does the national/state partnership really look like
  • So now let’s dive into what medicaid actually looks like right now, and to better understand how it functions we first have to discuss how medicaid funding actually works because it’s pretty unique in that unlike medicare, it is a partnership between the national level and the state level. So medicare is a federal managed program while medicaid is not entirely that.
  • Medicaid operates as a unique partnership between the federal government and the individual states. The federal government sets the overarching guidelines and requirements for the program, but it is the states that administer and implement Medicaid within their borders. This partnership allows for flexibility and customization to meet the specific needs of each state's population.
  • At the national level, the Centers for Medicare & Medicaid Services (CMS), a branch of the U.S. Department of Health and Human Services, oversees the Medicaid program. CMS establishes the core rules and regulations that states must follow while also providing funding to support Medicaid programs. This federal oversight ensures that certain standards are maintained and that Medicaid operates in accordance with federal laws.
  • Now, here's where it gets interesting: while the federal government sets the broad parameters, each state has the flexibility to design and operate its own Medicaid program within those guidelines. This means that Medicaid can vary from state to state in terms of eligibility criteria, covered services, and even the name of the program itself. States do their own handling applications, conducting eligibility assessments, and facilitating ongoing eligibility redeterminations.
  • For example, one state may have more broader eligibility requirements, allowing a greater number of individuals to qualify for Medicaid. Another state may have more limited eligibility criteria, resulting in a smaller population being eligible for the program.
  • Another aspect where states have flexibility is in the covered services and benefits they offer through their Medicaid programs. While there are mandatory services that all states must provide, such as hospital care, physician visits, and prescription drugs, states can choose to offer additional services beyond the minimum requirements. These additional services can include dental care, vision care, physical therapy, and more. However, the availability of these services can vary from state to state, meaning that beneficiaries in one state may have access to certain services that are not available to beneficiaries in another state.
  • States can also design their own Medicaid managed care programs. Managed programs are not the easiest thing to understand, and I definitely didn’t understand it the first time I heard about it so I’ll take a minute to explain what these are.
  • Medicaid managed care programs are a type of health insurance program that combines the financing and delivery of Medicaid benefits in a more organized way. Let's break it down into simple terms. In traditional Medicaid, the state government directly pays healthcare providers for the services delivered to Medicaid beneficiaries. But in Medicaid managed care, things work a little differently. The state contracts with managed care organizations (MCOs), which are private health insurance companies or healthcare providers, to handle and coordinate the healthcare services for those enrolled in Medicaid.
  • Here are a few important things to know about Medicaid managed care: First, there are these managed care organizations (MCOs) that partner with the state. They're responsible for managing and coordinating healthcare services for Medicaid beneficiaries within a specific area. When someone enrolls in Medicaid, they are assigned to a specific MCO within their designated service area. This means that the MCO takes on the responsibility of coordinating and providing all the covered healthcare services for that person.
  • MCOs have networks of healthcare providers, like doctors, hospitals, specialists, and pharmacies. Enrollees usually have to receive care from within the MCO's network, but there might be exceptions for certain out-of-network services.
  • To control costs, Medicaid managed care programs often use strategies like prior authorization requirements, utilization management, and agreements with network providers on reimbursement rates but keep in mind that they must follow all of the state’s and national Medicaid guidelines.
• ACA and Medicaid eligibility
  • Ok so we now understand the basis of how Medicaid works. So now let’s talk about how the Affordable care act passed in 2010 under President Obama played a role in Medicaid and its eligibility. One of the key provisions of the ACA was the expansion of Medicaid. This expansion sought to broaden eligibility criteria, allowing more low-income individuals and families to qualify for Medicaid coverage.
  • Prior to the ACA, Medicaid eligibility criteria varied significantly among states, resulting in disparities in access to care. The ACA aimed to create a more uniform and inclusive approach by establishing a federal minimum standard for Medicaid eligibility. It proposed expanding Medicaid to include individuals with incomes up to 138% of the federal poverty level, providing coverage for millions of low-income adults who were previously ineligible.
  • However, it's important to note that the Medicaid expansion under the ACA was not mandatory for states. The Supreme Court's ruling in 2012 made the expansion optional, leaving it up to each state to decide whether to expand their Medicaid programs. As a result, the implementation of Medicaid expansion has varied across states, leading to a patchwork of coverage across the country.
  • States that chose to expand Medicaid experienced significant benefits. Expansion states saw increased healthcare coverage, improved health outcomes, and reduced rates of uninsured individuals. The expansion helped bridge the coverage gap for many low-income adults who previously fell into the category of being uninsured but not eligible for traditional Medicaid.
  • On the other hand, states that chose not to expand Medicaid left a portion of their low-income population without access to affordable healthcare coverage. Although this made it cheaper for these states, this coverage gap created challenges for individuals who were unable to afford private health insurance but did not meet the traditional Medicaid eligibility criteria.
  • So, why haven't all states expanded Medicaid? Well, the reasons can vary. Some concerns raised include the potential long-term costs for states and the complexities of implementing expansion. However, it's important to note that numerous studies and experiences from states that have expanded Medicaid indicate the benefits far outweigh the challenges. And although we have been seeing more and more states adopt Medicaid expansion and will hopefully continue to see more expand in the coming years, it is very hard to judge how long it will be until all states adopt Medicaid expansion and if that will ever happen because it could be against some states interest.
  • Let’s look at a quick example: Let's start with State A. In State A, Medicaid has been expanded under the Affordable Care Act. This means that individuals with slightly higher incomes may qualify for Medicaid coverage. The expanded eligibility criteria have resulted in a significant increase in the number of low-income adults who can access Medicaid in State A. This expansion has been praised for providing healthcare coverage to individuals who were previously uninsured or underinsured. It has also led to improved health outcomes and financial security for many beneficiaries.
  • Now, let's turn our attention to State B. In State B, Medicaid has not been expanded. The eligibility criteria in State B are more restrictive, meaning that individuals with slightly higher incomes may not qualify for Medicaid coverage. As a result, some low-income adults in State B may fall into the coverage gap, where they do not qualify for Medicaid but also do not earn enough to afford private health insurance. This coverage gap can leave many individuals without access to essential healthcare services, potentially leading to delayed or foregone care.
  • Another aspect where State A and State B differ is in their covered services and benefits. While both states must provide the mandatory services required by the federal government, State A has chosen to offer additional services beyond the minimum requirements. These additional services may include dental care, vision care, and mental health services. In contrast, State B, due to budgetary constraints and other considerations, has a more limited range of covered services, excluding some vital healthcare needs from Medicaid coverage.
  • This state-level flexibility allows for innovation and responsiveness to local circumstances. However, it can also lead to disparities in coverage and access across state lines. It means that someone in one state may have access to certain services or benefits that may not be available to someone in a neighboring state.
  • It's important to note that the federal government provides funding to support state Medicaid programs. The federal government matches a percentage of the funds that states spend on Medicaid, with the specific matching rate varying based on a state's per capita income.
• Who is eligible
  • But now let’s quickly discuss who is eligible from a federal level. And keep in mind that this will change from state to state.
  • Our first group is low-income adults. In states that have expanded Medicaid under the Affordable Care Act, adults with incomes up to 138% of the federal poverty level may be eligible. As of 2023, the annual FPL for an individual is $14,580 ($1,215 / month), and for a married couple is $19,720 ($1,643.33 / month).
  • Next, let's talk about pregnant women. Medicaid recognizes the importance of prenatal care and offers coverage to pregnant women with incomes below a certain threshold, usually set at or above the federal poverty level.
  • Medicaid covers 43% of births in the United States. The average cost of medical care for a baby born without complications is $4,550 in the first year. The average cost of medical care for a premature or low birthweight baby is $49,000 in the first year.
  • Of course, we can't forget about our little ones. Children from low-income families are another key group eligible for Medicaid. The program provides comprehensive coverage for children up to age 19, with eligibility based on household income. In some cases, children from families with slightly higher incomes may qualify for the Children's Health Insurance Program, or CHIP, which bridges the gap for those not meeting traditional Medicaid thresholds. We will talk more about the CHIP program in a little bit.
  • Medicaid also extends its support to elderly individuals and people with disabilities. This category includes seniors who require long-term care services and individuals with disabilities who may need ongoing medical care and support. Eligibility for this group is based on income and specific functional criteria to ensure that those who need assistance the most can receive the care they deserve.
  • Additionally, Medicaid may cover other categorical groups. This could include individuals receiving Supplemental Security Income (SSI), certain refugees and immigrants, and those in need of family planning services. Each group has its own unique set of eligibility criteria to ensure that vulnerable populations can access the care they require.
  • It's essential to note that while the federal government sets general guidelines, each state has some flexibility in determining the exact income limits, categorical requirements, and eligibility rules. This means that eligibility may vary slightly depending on where you reside.
• How is it funded
  • how is Medicaid funded? Well, Medicaid is a joint federal and state program, which means that both the federal government and individual states contribute to its funding.
  • Now, you might be wondering, how does the federal government determine how much money to allocate to each state? Well, it's a bit like a financial dance! The federal government uses a matching system, where they provide a certain percentage of funding, known as the Federal Medical Assistance Percentage (FMAP), to each state based on their specific needs and resources.
  • The FMAP is determined by a formula that takes into account a state's average per capita income compared to the national average. Essentially, states with lower average incomes receive a higher FMAP, meaning they receive more federal funding to support their Medicaid programs. On the other hand, states with higher average incomes receive a lower FMAP, and therefore, a smaller share of federal funding.
  • So the FMAP is not a fixed number. It can vary between states and can change from year to year based on economic conditions and other factors. The federal government periodically adjusts the FMAP to reflect these changes and ensure a fair distribution of funds.
  • To illustrate this funding dance, let's imagine two states again: State A and State B. State A has a lower average income compared to the national average, while State B has a higher average income. As a result, State A would receive a higher FMAP, meaning they would receive a larger proportion of federal funding to support their Medicaid program. Conversely, State B would receive a lower FMAP, reflecting their relatively higher average income.
  • It's important to note that while the federal government provides a significant portion of the funding, individual states are also responsible for contributing their own share. This state contribution is often referred to as the state's "matching funds." The specific matching rate can vary depending on the state's wealth and other factors, but generally, it ranges from around 50% to 75% of the total Medicaid costs.
  • So, there you have it! Medicaid funding is a delicate dance between the federal government and the states, with the FMAP serving as the guiding rhythm. It ensures that federal funds are allocated based on each state's income levels and helps maintain the financial stability of the program across the nation.
• Why CHIP was created
  • But now let’s switch gears and talk about the CHIP program that I mentioned earlier since it is a big part of Medicaid. So we'll now delve into the Children's Health Insurance Program, better known as CHIP.
  • So, let's start with the burning question: why was CHIP created? Well, imagine a time when some low-income children were stuck in a healthcare coverage limbo. Their families earned too much to qualify for Medicaid, but not enough to afford private health insurance. These children were caught in the middle, facing limited access to essential healthcare services.
  • Recognizing this critical gap, the United States government took action. In 1997, the Children's Health Insurance Program, or CHIP, was born.
  • The primary goal of CHIP was to ensure that children from low-income families had access to the healthcare they needed. It aimed to bridge the coverage gap and offer comprehensive health insurance specifically tailored to meet the unique needs of children.
  • Now, you might be wondering how CHIP differs from Medicaid.
  • CHIP offers a range of benefits, including regular check-ups, immunizations, prescriptions, dental care, and even mental health services specifically tailored to children.
  • It offers affordable premiums and often minimal or no out-of-pocket expenses, making it more accessible for families facing economic challenges.
  • It's important to note that CHIP operates in partnership with states, similar to Medicaid. The federal government provides funding to each state to administer their own CHIP programs. This flexibility allows states to tailor their programs to the specific needs of their population, while still adhering to certain federal guidelines.
  • Over the years, CHIP has become a key player in national children’s healthcare coverage.
  • According to Medicaid.gov, As of February 2023 - 93,373,794 total individuals were enrolled in Medicaid. 41,977,712 are these individuals are children. Interestingly the majority of the children have medicaid enrollment and only 7 million are under CHIP.
  • The results of CHIP were pretty quick and from 1997 to 2012 the rate of uninsured children went down from 14% to a low of 7%. But it’s interesting because the truth is that many of these children that are still uninsured are eligible for Medicaid or CHIP. A study by the Kaiser Foundation found that in 2021 there were 27.5 million non-elderly people uninsured, and out of those, 27.5% were eligible for Medicaid or CHIP. That’s 7.4 million uninsured people in the US that could be enrolled in health insurance. Out of that, 4.9 million are adults, and 2.5 million are children.
  • Before we end this section on CHIP let’s just take a look on the role of the Affordable Care ACT on children’s coverage. So, what does the Affordable Care Act bring to the table? Well, one of the crucial aspects is the requirement for states to align coverage for children. The ACA mandated the transition of coverage for all children up to 133% of the Federal Poverty Level (FPL) from CHIP to Medicaid.
  • But that's not all! The ACA also focuses on streamlining enrollment processes, making it easier for children and their families to access coverage. By simplifying and improving enrollment procedures, more families can navigate the system with ease, ensuring that eligible children are enrolled in the appropriate healthcare programs.
  • The ACA recognizes that outreach efforts for adults can indirectly impact children's coverage. By increasing outreach initiatives to reach and enroll adults, more families will become aware of the available healthcare options for their children. This comprehensive approach creates a ripple effect, leading to increased enrollment and improved access to care for children.
  • Additionally, the ACA acknowledges the importance of financing for the Children's Health Insurance Program (CHIP). It calls for additional funding for CHIP through fiscal year 2015, providing the necessary resources to sustain and expand this vital program. Moreover, the ACA offers enhanced financing for CHIP from 2016 to 2019 if the program is reauthorized, ensuring continued support for the health and well-being of our nation's children.

Challenges Faced and Evolution

• Discussion of the evolution of Medicaid over the years
  • Now let’s switch gears and talk about how Medicaid has changed over the years. A little bit more history for you all so it’ll be somewhat boring but it’s important to understand how Medicaid adapted to a changing population.
  • Let's start with a significant milestone in the Medicaid program—the authorization of Home and Community-Based Services (HCBS) waivers. Home and Community-Based Services (HCBS) waivers are a critical component of Medicaid that allow states to provide services to individuals who would otherwise require institutional care. These waivers began to be authorized under Medicaid in the early 1980s, recognizing the importance of community-based care as an alternative to costly and restrictive institutional settings. By supporting individuals to receive care and support in their own homes or community-based settings, HCBS waivers promote independence, improve quality of life, and often proved to be more cost-effective. For example, an HCBS waiver may enable an individual with a disability to receive personal care assistance and home modifications allowing them to live independently and avoid unnecessary institutionalization. So what this basically did is begin to cover certain in home services for people that didn’t necessarily have to be institutionalized.
  • The "Katie Beckett" option, named after a young girl who faced challenges accessing Medicaid due to income limitations, is another significant milestone. This option allows states to extend coverage to children with disabilities living at home, even if their family income exceeds the typical Medicaid thresholds. By recognizing the unique healthcare needs of children with disabilities, the "Katie Beckett" option ensures that they can access essential healthcare services without facing financial barriers. For instance, a child with significant medical needs, such as complex medical equipment or specialized therapies, can now receive Medicaid coverage under the "Katie Beckett" option, regardless of their family's income. This has provided critical support to families who would otherwise struggle to afford the necessary care for their children.
  • In the 1990s, the introduction of Section 1115 waivers expanded Medicaid eligibility options. These waivers allow states to experiment with different approaches to coverage and care delivery. So it basically allowed states to test out different eligibility criteria and care options that weren’t normally required by federal statue with a goal of finding better methods to do the system. For example, a state may use a Section 1115 waiver to extend Medicaid eligibility to individuals who may not traditionally qualify, such as low-income adults without dependent children. This flexibility empowers states to design programs that align with their unique population needs, ensuring that more individuals have access to vital healthcare services.
  • In 1999, something really important happened that changed the way Medicaid supports people with disabilities. It was a court case called Olmstead v. L.C., and it had a big impact on home and community-based services.
  • Let me break it down for you. There were two women named Lois Curtis and Elaine Wilson. They had mental illness and developmental disabilities, and they were in a hospital for treatment. The doctors who were taking care of them said they could be cared for just as well in a community-based program, but they were still kept in the hospital.
  • So, they decided to take their case to court. And you know what? The Supreme Court made a landmark decision. They said that keeping people with disabilities isolated in institutions when they could live in the community is unfair and goes against the Americans with Disabilities Act, which is a law that protects the rights of people with disabilities.
  • This decision was a game-changer. It meant that Medicaid had an important role to play in helping people transition from institutions to community settings. It also meant that Medicaid had to support community living for people with disabilities. Since then, we've seen a lot of progress in providing more opportunities for community living, thanks to Medicaid.
  • But here's the thing: the need for community services keeps growing, and many individuals who need these services still struggle to get them. So, there's still work to be done to make sure everyone can live in their community and get the support they need. Medicaid is continually finding new ways to help with community-based care and integration, so we're moving in the right direction.
  • And finally, we arrive at a transformative moment that we already talked about — the Affordable Care Act (ACA) passed by President Obama in 2010.
  • And with that, we’ve talked about all major topics related to Medicaid.

Quick Facts

• So to finish us off I just want to run through a couple of interesting statistics and key facts about Medicaid and summarize what we talked about today. So as for quick facts,
• 1 in 5 Americans are covered by Medicaid
• Medicaid functions as a joint federal and state program
• 93,876,834 Americans are covered by Medicaid while 65,748,297 Americans are covered by Medicare, making Medicaid the largest source of health coverage in the US
• In 2021, Medicaid accounted for 17% of the total national healthcare expenditure while Medicare accounted for 21% of the total national healthcare expenditure. That is $900 billion dollars for Medicare and $734 billion dollars for Medicaid.
• And keep in mind that in 2021, healthcare expenditure accounted for 18.3% of the US GDP, and this continues to rise every year. So if Medicaid accounts for 17% of that, 17% of 18.3% is 3.1%, then Medicaid cost 3.1% of the annual GDP in 2021, which may sound small but keep in mind that this is more than 3% of the total market value produced in the US in 2021.

Conclusion 

• And that brings us to the end of our journey through the world of Medicaid. We've covered a lot of ground today, exploring the history, purpose, and impact of this vital healthcare program. Let's take a moment to summarize everything we've discussed.
• Medicaid was created in 1965 as a joint federal-state program to provide healthcare coverage to low-income individuals and families. It has evolved over the years to adapt to changing population needs, expanding eligibility criteria, and incorporating new initiatives to improve care and outcomes.
• We explored the challenges that Medicaid has faced, from funding constraints to variations in coverage and administration across different states. Despite these challenges, Medicaid has demonstrated its resilience and the ability to adapt to meet the needs of millions of Americans.
• We also discussed the Children's Health Insurance Program (CHIP), a crucial component of Medicaid that provides coverage to low-income children who don't qualify for traditional Medicaid but are unable to be insured through a family plan. CHIP helps bridge the gap for these children and ensures they receive the care they need.
• Throughout our conversation, we debunked misconceptions and tackled stigmas associated with Medicaid. We highlighted Medicaid’s role in improving health outcomes, reducing financial barriers, and supporting individuals and families in times of need. We explored how Medicaid coordinates care, addresses social determinants of health, and promotes quality outcomes.
• We examined the complex landscape of Medicaid, both at the national and state levels, discussing the funding mechanisms, eligibility criteria, and the role of the federal government in allocating resources to each state. We also saw how states have implemented Medicaid differently, leading to variations in coverage and services.
• We touched upon the Affordable Care Act (ACA) and its impact on Medicaid, expanding coverage options, streamlining enrollment processes, and aligning coverage for children. The ACA has been instrumental in driving progress and expanding access to healthcare for millions of Americans.
• And after all this progress, Medicaid is now the largest health insurance program in the United States. And that is it for today, I hope you learned a lot about Medicaid and don’t forget to join us again for part 2, where we will discuss the current events related to Medicaid as well as talk to someone that has been on Medicaid to tell us about the ups and downs of their experiences.