Medicaid’s Role for Children in the United States

1. Medicaid’s Role for Children in the United States

2. Jocelyn Guyer Georgetown University Health Policy Institute Center for Children and Families Washington, D.C. jag99@georgetown.edu www.ccfgeorgetown.edu February 27, 2006

3. Children’s Sources of Health Care Coverage, 2003-2004 All Children Low-Income Children Total: 77.7 million Total: 33.3 million Note: Medicaid includes the State Children’s Health Insurance Program (SCHIP). Source: Health Insurance In America: 2004 Data Update. Kaiser Commission on Medicaid and the Uninsured, November 2005.

4. Medicaid Enrollees and Expenditures by Enrollment Group, 2003 (Total= 52 million) (Total= $252 billion) Note: Total expenditures on benefits excludes DSH payments Source: Kaiser Commission on Medicaid and the Uninsured estimates based on CBO and OMB data, 2004.

5. Changes in Children’s Health Insurance Coverage Rates, 2003-2004(Percentage Point Differences) Change in Number of Uninsured 2000-2004 -400,000 children Source: Health Insurance Coverage in America: 2004 Data Update. Kaiser Commission on Medicaid and the Uninsured, November 2005.

6. Trends in the Uninsured Rate of Low-Income Children, 1997 - 2004 Source: Georgetown CCF analysis based on R.A. Cohen, M.E. Martinez. Health Insurance Coverage: Estimates from the National Health Interview Survey, January-March 2005.

7. Emerging Issues in Medicaid • Federal Developments • Reconciliation bill • President’s budget and other developments in Washington • State Developments

8. Medicaid Cuts in the Deficit Reduction Act 5-year numbers Size of CutShare of Total (in billions) Reduced Benefits Higher Cost Sharing Reducing Payments for Prescription Drugs Tighter Restrictions on Asset Transfers Other (e.g., restrictions on provider taxes) 1.3 1.9 3.9 2.4 2.1 11% 17% 33% 21% 18% *28% *More than a quarter of all cuts come from increases in reduced benefits and increased cost sharing. Source: Georgetown CCF analysis based on CBO’s estimate of the Budgetary Effects of Title V of the Deficit Reduction Act of 2005. December 18, 2005.

9. Benefit Changes • New state option to provide reduced package of benefits (“benchmark” benefits) to some groups • No real standard for “benchmark” benefits, particularly for dental care • Flexibility applies primarily to parents not on welfare and children • Cannot be used when a state newly expands coverage • For children, states required to provide an EPSDT “wrap-around” benefit • States can vary the benefits provided within a group

10. Cost Sharing Changes - State Options • State option to allow providers to deny care when people are unable to make a co-payment • For people above 100% of federal poverty level (“FPL”), copayments up to 10% or 20% of cost • Drafting error leaves unclear the rules that apply to people below 100% of FPL • Option to impose premiums above 150% of FPL • Aggregate cap of 5% of income

11. Proposed Medicaid Cuts in the President’s FY 2007 Budget Legislative Regulatory Total Gross Cuts New Initiatives Net Cuts -4.9 3.2 -1.7 -12.2 0 -12.2 17.2 3.2 -14.0 + 87% of proposed cuts are from regulatory proposals Note: Numbers may not add up due to rounding. Source: Georgetown CCF analysis based on the Budget of the United States Government, FY 2007.

12. State Developments • State fiscal pressures easing, but Medicaid remains a strain • Waivers in a “new era” that allows for far more sweeping changes • Major shifts in financing (VT) • “Defined contribution” plans (FL) • “Tiering” of benefits (KY) • States continue to use state plan amendments to reduce/expand coverage

13. Federal Waiver Guidelines Have Changed • 1115 Waivers Before HIFA • States were required to maintain Medicaid and SCHIP benefits and cost sharing protections • Under the HIFA Waivers: • States have no limitations on cost sharing for optional Medicaid beneficiaries and for “expansion” populations who don’t meet Medicaid’s categorical criteria • States are not required to provide wrap-around coverage for optional Medicaid or SCHIP beneficiaries • Benefit requirements for mandatory Medicaid beneficiaries are waived if participation is voluntary for the beneficiary

14. Upcoming Debates • President’s Fiscal Year 2007 Budget • Medicaid legislative proposals unlikely to be seriously considered • BUT, Administration may move forward on its own • New Medicaid waiver initiative • Changes to Medicaid regulations • Medicaid Commission • SCHIP Reauthorization

15. Medicaid Standards Matter Kevin has asthma and at one point needed 13 medications a day Brandie has multiple medical and developmental problems. She needs daily speech and occupational therapy