The Role of Medicare and Medicaid in State and National Health Reform

1. The Role of Medicare and Medicaid in State and National Health Reform Diane Rowland, Sc.D. Executive Vice President, Henry J. Kaiser Family Foundation and Executive Director, Kaiser Commission on Medicaid and the Uninsured for National Congress on the Un and Underinsured December 12, 2007 Washington, DC

2. Health Insurance Coverage in the U.S., 2006 Total = 296.1 million NOTE: Medicaid/Other Public includes Medicaid, SCHIP, other state programs and military-related coverage. Those enrolled in both Medicare and Medicaid (1.8% of total population) are shown as Medicare beneficiaries. SOURCE: KCMU/Urban Institute analysis of March 2007 CPS.

3. Uninsured Rates Among the Nonelderly, by State, 2005-2006 NH VT ME WA MT ND MN MA OR NY ID SD WI RI MI CT WY PA NJ IA NE OH NE IN NV DE IL WV UT VA MD CO KY CA KS MO NC DC TN OK SC AR AZ NM GA MS AL TX LA AK FL HI ≥18% (19 states) 13-17% (18 states & DC) US Average = 18% < 13% (13 states) SOURCE: Urban Institute and KCMU analysis of the March 2006 and 2007 Current Population Survey. Two-year pooled estimates for states and the US (2005-2006).

4. Characteristics of the Uninsured, 2006 Family Work Status Family Income Age Part-Time Workers 11% 55-64 9% 0-18 20% No Workers 18% 35-54 32% 19-34 39% 1 or More Full-Time Workers 71% Total = 46.5 million uninsured The federal poverty level was $20,614 for a family of four in 2006.SOURCE: KCMU/Urban Institute analysis of March 2007 CPS.

5. The Nonelderly Uninsured,by Age and Income Groups, 2006 Other Adultswithout Children21% Total = 46.5 million uninsured Low-income includes those with family incomes less than 200% of the federal poverty level. SOURCE: KCMU/Urban Institute analysis of March 2007 CPS.

6. Medicaid Today Health Insurance Coverage 29 million children & 15 million adults in low-income families; 14 million elderly and persons with disabilities Assistance to Medicare Beneficiaries 7.5 million aged and disabled — 18% of Medicare beneficiaries Long-Term Care Assistance 1 million nursing home residents; 43% of long-term care services MEDICAID Support for Health Care System and Safety-net 15% of national health spending State Capacity for Health Coverage 43% of federal funds to states

7. Medicaid Enrollees and Expendituresby Enrollment Group, 2004 Elderly 10% DSH 6% Elderly 26% Disabled 14% Adults 26% Disabled 39% Children 50% Adults 12% Children 17% Total = 58 million Total = $274 billion SOURCE: Urban Institute and Kaiser Commission on Medicaid and the Uninsured estimates based on FY 2004 MSIS and CMS-64 data.

8. Poor Poor Poor (<100% Poverty) Near-Poor Near-Poor Near-Poor (100-199% Poverty) Health Insurance Coverage of Low-Income Adults and Children, 2006 Children Parents Adults without Children Medicaid also includes SCHIP and other state programs, Medicare and military-related coverage. SOURCE: KCMU/Urban Institute analysis of March 2007 CPS.

9. Medicaid and SCHIP Enrollment of Children, FY 1998 – FY 2005 Millions of Children SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute analysis of HCFA-2082, MSIS, and SEDS data, 2007.

10. Percentage of Children Without Health Insurance, By Poverty Level, 1997-2005 23% Children below 200% of poverty 21% 14% 6% 5% 5% Children above 200% of poverty * Survey method change in 2005 affects comparison with earlier years slightly. Children less than 18 years old. Source: L. Ku, “Medicaid: Improving Health, Saving Lives,” Center on Budget and Policy Priorities analysis of National Health Interview Survey data, August 2005.

11. Children’s Eligibility for Medicaid/SCHIP by Income, July 2007 NH VT WA ME MT ND MN MA OR NY ID SD WI RI MI CT WY PA NJ IA NE OH IN NV WV DE IL IL UT VA MD CO CA KS MO KY NC DC TN OK SC AR AZ NM AL GA MS TX LA AK FL HI < 200% FPL (9 states) 200% FPL (23 states) 201-250% FPL (8 states) > 250% FPL (11 states including DC) *The Federal Poverty Line (FPL) for a family of three in 2007 is $17,170 per year. **IL uses state only funds to cover children above 200% FPL SOURCE: Based on a national survey conducted by the Center on Budget and Policy Priorities for KCMU, 2006.

12. Medicaid Eligibility for Working Parents, by Income, July 2006 NH VT ME WA MT ND MN MA OR NY ID SD WI RI MI CT WY PA NJ IA NE OH IN NV DE IL WV UT VA MD CO CA KS MO KY NC DC TN OK SC AR AZ NM AL GA MS TX LA AK FL HI ≥100% FPL* (16 states including DC) 50% - 99% FPL (21 states) National Average = 67% FPL < 50% FPL (14 states) * Federal Poverty Level (FPL) refers here to HHS Poverty Guidelines, $16,090 for a family of three in 2005. SOURCE: Center on Budget and Policy Priorities for KCMU, 2005

13. Reaching The Uninsured Who Are Currently Eligible for Public Coverage Not Eligible, 300%+ FPL 15% Not Eligible, 300%+ FPL 21% Eligible 14% Not Eligible, <300% FPL 11% Eligible 74% Not Eligible, <300% FPL 65% Adults 36.6 Million Uninsured Children 8 Million Uninsured *The Federal Poverty Line (FPL) for a family of three in 2004 is $15,067 per year SOURCE: Urban Institute analysis of 2005 CPS for KCMU.

14. Renewed State Interest in Expanding Coverage • Fiscal outlook improving for states • Increased tax revenues • Growth in Medicaid spending leveling off • 42 states have plans to expand health coverage • States using Medicaid to support financing and enrollment • Improving Medicaid and SCHIP coverage, particularly for children • Universal coverage plans passed in 3 states, proposed in 11 others • Need to address growing uninsured population • Driven by declining rates of employer-sponsored insurance • Exacerbated by rising health care costs • Desire to improve the quality and efficiency of current health care system

15. States Moving Toward Comprehensive Health Care Reform* WA VT ME MN OR NY MA WI PA CT IL CO CA KS Enacted Universal Coverage (3 states) Proposed Universal Coverage (11 states) *as of October 1, 2007

16. Role of Medicare and Medicaid in State Reform • Medicare covers the elderly and some disabled • Medicaid provides: • coverage through expanded eligibility and increased outreach • a financing vehicle through redirected DSH funds • a source of federal assistance through matching funds for increased coverage and provider payments

17. Key Elements of the Massachusetts Health Care Reform Plan • Individual Mandate • Mandate enforced through tax filings • Employer Assessment • Employers with >10 employees that don’t offer coverage must pay $295 per employee per year • Subsidized Coverage • Sliding scale subsidies for individuals <300% FPL • Full subsidies for those <100% FPL • The Connector • Links consumers & small employers to insurance • Establishes affordability standards and certifies insurance products • Medicaid Expansion to Children <300% FPL

18. Proposed Coverage for Uninsured under Massachusetts Reform Medicaid Expansion 17% 92,500 residents Subsidized coverage 38% 207,500 residents Remain Uninsured 6%, 35,000 residents Private Insurance 39% 215,000 residents Total Uninsured – 550,000 Source: Massachusetts Senate

19. Massachusetts Reform Plan Revenues SFY 2008 Employer Assessment Other Hospital Assessment Insurance Surcharge Federal Medicaid Matching Payments State General Funds Total Revenues = $1.725 Billion Source: Massachusetts Executive Office of Administration and Finance

20. Massachusetts Reform Implementation Update • MassHealth (Public Program Expansion) • From end of June 2006 to July 2007, MassHealth enrollment increased by nearly 56,000 • Commonwealth Care(Subsidized Connector) • Commonwealth Care plans (offered by Medicaid managed care plans) became available October 2006 • As of October 2007, 127,000 have enrolled in Commonwealth Care • Vast majority of enrollees (80%) have incomes below 150% FPL • Commonwealth Choice(Unsubsidized Connector) • Plans from six carriers approved, available May 1, 2007 • Plans became available to small businesses October 1, 2007 • Enrollment to date more limited

21. National Interest in Health Care Also Rising Percent naming HEALTH CARE as one of the top two issues they’d most like to hear presidential candidates talk about, by political party self-identification: Source: Kaiser Health Tracking Poll: Election 2008

22. Presidential Candidates Differ in Approach to Health Care Reform • Democrats generally favor: • universal coverage • strengthening the private employer-based system • expanding the role of existing public programs for low-income • purchasing pools and insurance market reforms • coverage mandates on employers and individuals • financing by rolling back tax breaks for wealthiest Americans • Republicans generally favor: • tax incentives for the purchase of insurance • expanding the individual insurance market • limiting the role of public programs; more state flexibility • consumer-directed plans such as HSAs • deregulation of the insurance market

24. Public Programs and Health Reform • Medicaid provides a coverage base for low-income • Coverage could be extended to more children, parents, and other adults • Medicaid funding used to finance coverage expansions • Medicaid helps promote state reform efforts • SCHIP reauthorization debate raises issues for public role • Income eligibility for public coverage • Scope of coverage and the role of private plans • Public programs vs. tax credits for coverage • Medicare as a vehicle for expanded coverage • Single-payer proposals modeled after Medicare • Buy-in options for early retirees