Medicaid
In the United States, Medicaid is a government program that provides health insurance for adults and children with limited income and resources. The program is partially funded and primarily managed by state governments, which also have wide latitude in determining eligibility and benefits, but the federal government sets baseline standards for state Medicaid programs and provides a significant portion of their funding.
Not to be confused with Medicare (United States).
Medicaid was established in 1965 and was significantly expanded by the Affordable Care Act (ACA), which was passed in 2010. In most states, anyone with income up to 138% of the federal poverty line qualifies for Medicaid coverage under the provisions of the ACA.[1] A 2012 Supreme Court decision established that states may continue to use pre-ACA Medicaid eligibility standards and receive previously established levels of federal Medicaid funding; in states that make that choice, income limits may be significantly lower, and able-bodied adults may not be eligible for Medicaid at all.[2]
Medicaid is the largest source of funding for medical and health-related services for people with low income in the United States, providing free health insurance to 85 million low-income and disabled people as of 2022;[3] in 2019, the program paid for half of all U.S. births.[4] As of 2017, the total annual cost of Medicaid was just over $600 billion, of which the federal government contributed $375 billion and states an additional $230 billion.[4] States are not required to participate in the program, although all have since 1982. In general, Medicaid recipients must be U.S. citizens or qualified non-citizens, and may include low-income adults, their children, and people with certain disabilities.[5] As of 2022 45% of those receiving Medicaid or CHIP were children.[3]
Medicaid also covers long-term services and supports, including both nursing home care and home- and community-based services, for those with low incomes and minimal assets; the exact qualifications vary by state. Medicaid spent $215 billion on such care in 2020, over half of the total $402 billion spent on such services.[6] Of the 7.7 million Americans who used long-term services and supports in 2020, about 5.6 million were covered by Medicaid, including 1.6 million of the 1.9 million in institutional settings.[7]
Medicaid covers healthcare costs for people with low incomes, while Medicare is a universal program providing health coverage for the elderly. Medicaid offers elder care benefits not normally covered by Medicare, including nursing home care and personal care services. There are also dual health plans for people who have both Medicaid and Medicare.[8] Along with Medicare, Tricare, and ChampVA, Medicaid is one of the four government-sponsored medical insurance programs in the United States. The U.S. Centers for Medicare & Medicaid Services in Baltimore, Maryland provides federal oversight.[9]
Research shows that existence of the Medicaid program improves health outcomes, health insurance coverage, access to health care, and recipients' financial security and provides economic benefits to states and health providers.[10][11][12][13]
Features[edit]
Beginning in the 1980s, many states received waivers from the federal government to create Medicaid managed care programs. Under managed care, Medicaid recipients are enrolled in a private health plan, which receives a fixed monthly premium from the state. The health plan is then responsible for providing for all or most of the recipient's healthcare needs. Today, all but a few states use managed care to provide coverage to a significant proportion of Medicaid enrollees. As of 2014, 26 states have contracts with managed care organizations (MCOs) to deliver long-term care for the elderly and individuals with disabilities. The states pay a monthly capitated rate per member to the MCOs, which in turn provide comprehensive care and accept the risk of managing total costs.[14] Nationwide, roughly 80% of Medicaid enrollees are enrolled in managed care plans.[15] Core eligibility groups of low-income families are most likely to be enrolled in managed care, while the "aged" and "disabled" eligibility groups more often remain in traditional "fee for service" Medicaid.
Because service level costs vary depending on the care and needs of the enrolled, a cost per person average is only a rough measure of actual cost of care. The annual cost of care will vary state to state depending on state approved Medicaid benefits, as well as the state specific care costs. A 2014 Kaiser Family Foundation report estimates the national average per capita annual cost of Medicaid services for children to be $2,577, adults to be $3,278, persons with disabilities to be $16,859, aged persons (65+) to be $13,063, and all Medicaid enrollees to be $5,736.[16]
Enrollment[edit]
In 2002, Medicaid enrollees numbered 39.9 million Americans, with the largest group being children (18.4 million or 46%).[54] From 2000 to 2012, the proportion of hospital stays for children paid by Medicaid increased by 33% and the proportion paid by private insurance decreased by 21%.[55] Some 43 million Americans were enrolled in 2004 (19.7 million of them children) at a total cost of $295 billion. In 2008, Medicaid provided health coverage and services to approximately 49 million low-income children, pregnant women, elderly people, and disabled people. In 2009, 62.9 million Americans were enrolled in Medicaid for at least one month, with an average enrollment of 50.1 million.[56] In California, about 23% of the population was enrolled in Medi-Cal for at least 1 month in 2009–10.[57] As of 2017, the total annual cost of Medicaid was just over $600 billion, of which the federal government contributed $375 billion and states an additional $230 billion.[4] According to CMS, the Medicaid program provided health care services to more than 92 million people in 2022.[58]
Loss of income and medical insurance coverage during the 2008–2009 recession resulted in a substantial increase in Medicaid enrollment in 2009. Nine U.S. states showed an increase in enrollment of 15% or more, putting a heavy strain on state budgets.[59]
The Kaiser Family Foundation reported that for 2013, Medicaid recipients were 40% white, 21% black, 25% Hispanic, and 14% other races.[60]
Comparisons with Medicare[edit]
Unlike Medicaid, Medicare is a social insurance program funded at the federal level and focuses primarily on the older population.[61] Medicare is a health insurance program for people age 65 or older, people under age 65 with certain disabilities, and (through the End Stage Renal Disease Program) people of all ages with end-stage renal disease.[62] The Medicare Program provides a Medicare part A covering hospital bills, Medicare Part B covering medical insurance coverage, and Medicare Part D covering purchase of prescription drugs.
Medicaid is a program that is not solely funded at the federal level. States provide up to half of the funding for Medicaid. In some states, counties also contribute funds. Unlike Medicare, Medicaid is a means-tested, needs-based social welfare or social protection program rather than a social insurance program. Eligibility is determined largely by income. The main criterion for Medicaid eligibility is limited income and financial resources, a criterion which plays no role in determining Medicare coverage. Medicaid covers a wider range of health care services than Medicare.
Some people are eligible for both Medicaid and Medicare and are known as Medicare dual eligible or medi-medi's.[63][64] In 2001, about 6.5 million people were enrolled in both Medicare and Medicaid. In 2013, approximately 9 million people qualified for Medicare and Medicaid.[65]
Utilization[edit]
During 2003–2012, the share of hospital stays billed to Medicaid increased by 2.5%, or 0.8 million stays.[92] As of 2019, Medicaid paid for half of all births in the United States.[4]
Medicaid super utilizers (defined as Medicaid patients with four or more admissions in one year) account for more hospital stays (5.9 vs.1.3 stays), longer lengths of stay (6.1 vs. 4.5 days), and higher hospital costs per stay ($11,766 vs. $9,032).[93] Medicaid super-utilizers were more likely than other Medicaid patients to be male and to be aged 45–64 years.[93] Common conditions among super-utilizers include mood disorders and psychiatric disorders, as well as diabetes, cancer treatment, sickle cell anemia, sepsis, congestive heart failure, chronic obstructive pulmonary disease, and complications of devices, implants, and grafts.[93]
Effects[edit]
Mortality and disability reduction[edit]
A 2021 study found that Medicaid expansion as part of the Affordable Care Act led to a substantial reduction in mortality, primarily driven by reductions in disease-related deaths.[13] A 2018 study in the Journal of Political Economy found that upon its introduction, Medicaid reduced infant and child mortality in the 1960s and 1970s.[109] The decline in the mortality rate for nonwhite children was particularly steep.[109] A 2018 study in the American Journal of Public Health found that the infant mortality rate declined in states that had Medicaid expansions (as part of the Affordable Care Act) whereas the rate rose in states that declined Medicaid expansion.[110] A 2020 JAMA study found that Medicaid expansion under the ACA was associated with reduced incidence of advanced-stage breast cancer, indicating that Medicaid accessibility led to early detection of breast cancer and higher survival rates.[111] A 2020 study found no evidence that Medicaid expansion adversely affected the quality of health care given to Medicare recipients.[112] A 2018 study found that Medicaid expansions in New York, Arizona, and Maine in the early 2000s caused a 6% decline in the mortality rate: "HIV-related mortality (affected by the recent introduction of antiretrovirals) accounted for 20% of the effect. Mortality changes were closely linked to county-level coverage gains, with one life saved annually for every 239 to 316 adults gaining insurance. The results imply a cost per life saved ranging from $327,000 to $867,000 which compares favorably with most estimates of the value of a statistical life."[113]
A 2016 paper found that Medicaid has substantial positive long-term effects on the health of recipients: "Early childhood Medicaid eligibility reduces mortality and disability and, for whites, increases extensive margin labor supply, and reduces receipt of disability transfer programs and public health insurance up to 50 years later. Total income does not change because earnings replace disability benefits."[114] The government recoups its investment in Medicaid through savings on benefit payments later in life and greater payment of taxes because recipients of Medicaid are healthier: "The government earns a discounted annual return of between 2% and 7% on the original cost of childhood coverage for these cohorts, most of which comes from lower cash transfer payments".[114] A 2019 National Bureau of Economic Research paper found that when Hawaii stopped allowing Compact of Free Association (COFA) migrants to be covered by the state's Medicaid program that Medicaid-funded hospitalizations declined by 69% and emergency room visits declined by 42% for this population, but that uninsured ER visits increased and that Medicaid-funded ER visits by infants substantially increased.[115] Another NBER paper found that Medicaid expansion reduced mortality.[116]
A 2021 American Economic Review study found that early childhood access to Medicaid "reduces mortality and disability, increases employment, and reduces receipt of disability transfer programs up to 50 years later. Medicaid has saved the government more than its original cost and saved more than 10 million quality adjusted life years."[117]
Rural hospitals boosted revenue[edit]
A 2020 study found that Medicaid expansion boosted the revenue and operating margins of rural hospitals, had no impact on small urban hospitals, and led to declines in revenue for large urban hospitals.[118] A 2021 study found that expansions of adult Medicaid dental coverage increasingly led dentists to locate to poor, previously underserved areas.[119] A 2019 paper by Stanford University and Wharton School of Business economists found that Medicaid expansion "produced a substantial increase in hospital revenue and profitability, with larger gains for government hospitals. On the benefits side, we do not detect significant improvements in patient health, although the expansion led to substantially greater hospital and emergency room use, and a reallocation of care from public to private and better-quality hospitals."[120]
Financial and health security increase[edit]
A 2017 survey of the academic research on Medicaid found it improved recipients' health and financial security.[10] Studies have linked Medicaid expansion with increases in employment levels and student status among enrollees.[121][122][123] A 2017 paper found that Medicaid expansion under the Affordable Care Act "reduced unpaid medical bills sent to collection by $3.4 billion in its first two years, prevented new delinquencies, and improved credit scores. Using data on credit offers and pricing, we document that improvements in households' financial health led to better terms for available credit valued at $520 million per year. We calculate that the financial benefits of Medicaid double when considering these indirect benefits in addition to the direct reduction in out-of-pocket expenditures."[124] Studies have found that Medicaid expansion reduced rates of poverty and severe food insecurity in certain states.[125][126] Studies on the implementation of work requirements for Medicaid in Arkansas found that it led to an increase in uninsured individuals, medical debt, and delays in seeking care and taking medications, without any significant impact on employment.[127][128][129] A 2021 study in the American Journal of Public Health found that Medicaid expansion in Louisiana led to reductions in medical debt.[130]
Crime reduction[edit]
Studies have found that Medicaid expansion reduced crime. The proposed mechanisms for the reduction were that Medicaid increased the economic security of individuals and provided greater access to treatment for substance abuse or behavioral disorders.[132][133] A 2022 study found that Medicaid eligibility during childhood reduced the likelihood of criminality during early adulthood.[134]