Texas Medicaid Basics
Barry S. Lachman, MD, MPH
October, 2012
What is Medicaid?
Jointly funded state-federal program providing health
coverage to low-income and disabled individuals.
 Federal agency: Centers for Medicare and Medicaid
Services (CMS)
 State agency: Health and Human Services
Commission (HHSC)
Medicaid is entitlement
program
 Federal law requires coverage for certain
populations and services.
 States are allowed to cover additional populations.
 Eligibility is based on income, age and certain
eligibility categories
Guaranteed coverage for eligible services to eligible
individuals.
Medicaid Eligibility
Medicaid serves:
Eligibility criteria:
 Low-income families
 Residency in Texas
 Children
 U.S. citizen or qualified
 Related caretakers of
dependent children
 Pregnant women
 Elderly
 Individuals with disabilities
aliens legally admitted for
permanent residency
 Income and resource
limits
 Functional and medical
criteria for long-term
services and support
 Most child applicants must
be under age of 19
Medicaid Caseload
currently serves about 3.3 million people
66% are children
50% of all enrollees are in FFS & PCCM models that
were not designed to manage costs.
Services for the aged, blind, and disabled are the largest share
of program costs
Federal Poverty Level
is the definition of poverty used by the federal government as
the reference point to determine Medicaid eligibility
FPL
is the income level below which a person
is officially considered to lack adequate financial resources and to be
living in poverty
U. S. Dept. Of HHS 2011 Poverty Guidelines
Federal Poverty Level Based on Family Income
(based on U.S. Dept. of HHS poverty guidelines for 2011)
Family Size
Income
1
$10,890
2
$14,710
3
$18,530
4
$22,350
5
$26,170
6
$29,990
FPL Income Examples
Individual
Family of 3
$34,281
$20,147
$14,484
$24,645
$10,890
100%
FPL
$37,060
$18,530
133%
FPL
185%
FPL
100%
FPL
133%
FPL
185%
FPL
200%
FPL
200%
Texas FPL Eligibility
*Annual income based on a family of 3 except
for SSI and nursing home clients which are
based on individual income
Eligibility by Income
Texas Medicaid Caseload Growth
Sept. 1978 – Sept. 2020
Source: HHSC
Texas Medicaid Beneficiaries & Expenditures
SFY 2010 (Source: HHSC)
Non-Disabled
Children
66%
Other Adults 9%
Aged, Blind
and Disabled
25%
Caseload
Non-Disabled
Children
32%
Other Adults 10%
Aged, Blind
and Disabled
58%
Expenditures
Texas Medicaid Expenditures
SFY 2009
Medicaid Benefits
Mandatory Benefits
 The services states are federally required
to offer as part of state program
Optional Benefits
 Federally approved additional services that states
can offer under Medicaid program
Services Covered
 Covers basic health care services




physician services
inpatient, outpatient care
pharmacy, lab and x-ray
long term care services for the aged and disabled
How is Medicaid Funded?
 Medicaid is funded by both state and federal
governments.
 Federal share is based on Federal Medical
Assistance Percentage (FMAP)
 FMAP is based on state’s per capita personal
income compared to the U. S. average.
 Texas receives FMAP of approximately 60%
meaning 60/40 split for most client services.
Supplemental Federal Funding
 Upper Payment Limit (UPL) – payments made to
hospitals and physicians to make up the difference
between what Medicaid pays for services and what
Medicare would have paid for the same care.
 Disproporionate Share Hospital Program (DSH) –
special payments made to hospitals that serve a
disproportionately large number of Medicaid and lowincome patients.
Health Reform: Myth and
Truth
Barry S. Lachman, MD, MPH
Why is Medicaid Important
 Safety Net for the underserved and vulnerable
 Key cog in assuring universal coverage for those under
133% of poverty
Medicaid Myths and Reality
 Myth: Federal Program – actually much State control
 Benefits are very generous – true, more than any
commercial insurance or Medicare. However, covers those
with disabilities who are more expensive.
 Fiscally unsustainable – State budgets are challenged;
however, we are already paying for these services. 40% of
health expenditures are wasted (IOM, 2012)
 Medicaid is a failure – fales. It has narrowed gap on health
disparities. Multiple good studies show improved health
outcomes in those served
 Could just move them into commercial insurance –
false. Has been tried. It does not work.
The State of the Healthcare
System
 Costs out of control
 Over 40 million uninsured
 Poor quality – Overall Texas is at or near the bottom on
almost all measures
 Ration based on income
 Employer based model in rapid decline
 Insurance unaffordable for many
 Very inefficient system
 Multiple problems not just access
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The Uninsured
 Over 40 million uninsured (US Census Bureau, New York Times,
Austin American Statesman, Lubbock Times
 Texas highest uninsured rate in US (same)
 Texas highest number of uninsured children (KFF, US Census
Bureau) Over 1 million uninsured children in Texas (Kids Count
Survey)
 Dallas has second most uninsured of any city – 1.4 million (TMA)
 Over 90% of uninsured in Dallas are US citizens (CPPP)
 1 in 5 women in Dallas uninsured (Dallas Women’s Foundation)
 Most are low income (Census Bureau, CPPP, Dallas Women’s
Foundation, KFF)
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Texas Health Statistics
 47th in % of insured children (KFF)
 47th in % of insured adults (KFF)
 2nd in number of uninsured adults (KFF)
 2nd in Total Uninsured (KFF)
 1st in number of uninsured children (KFF)
 Public Mental Health expenditures (48th)
 Infectious Disease – 46th
 Lack of Health Insurance – 50th
 Early Prenatal Care – 50th
Affordable or Not
 Texas cost cover 80% of uninsured for 1% increase in
State Health Care Spending CPPP
 CMS (DMN 6/14/2012) – cover 30 million (75%) for
0.1% increase per year in costs
 Does not include any savings from bill
 Does not look at NPV of investment – what is the cost of
not doing it over time
Supreme Court Ruling
 Upholds all challenged parts of ACA except
 Medicaid Expansion to 133% of poverty level (it is
optional)
ACA Highlights
 Near universal coverage through Medicaid, Exchanges,
Medicare, private health insurance
 Eliminates preexisting condition for coverage and
continuation
 Eliminates ending coverage for honest errors on
application
 Extends dependent coverage to age 27
 Clinical trials coverage
 Small employer tax credits
More ACA Highlights
 Grants available to states: (1) to set up an Office of Health


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Insurance Consumer Assistance (2) to establish health
insurance exchanges. TX applied and will get both!
Begins new $11 billion investment in Community Health
Centers.
New funding for training primary care docs, nurses, other
professionals.
No copays on preventive services
Minimum and essential benefits
Medicaid payments to doctors must be equal to Medicare
 Limits excessive profits by insurers
Making Medicare
Stronger
2010: Closing the Rx “Doughnut Hole”: Shrinks Doughnut Hole by $250 in 2010
(rebate), 50% discount on brand-name drugs in the remaining gap; closes
doughnut hole entirely by 2020
Jan. 2011: New preventive benefits: adds comprehensive annual check-up plus
other prevention benefits, with no out-of-pocket costs.
Adds 12 more years to Medicare Trust Fund Solvency: Not by cutting current
Medicare benefits or doctor fees, but slowing growth in Medicare spending from
2010 to 2019.
New Access to Community-Based Services and Supports: Medicare today does
not cover community-based services to help seniors remain in their homes. A new
voluntary insurance program (CLASS) will provide community-based assistance
services and support. Starts in 2012 or 2013; 5 years to qualify for benefits.
The “cuts” are largely limits on insurer profits in ACA whereas cuts in the “Ryan Budget” are real
cuts to benefits and payments
.
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Health Reform Coverage Options by Income
Family Income
>$88,400 for a
family of four;
>400% of FPL
 Job-based coverage, or
 Full-cost coverage in the exchange
$66,200-$88,400;
300-400% of FPL
 Job-based coverage, or
 Subsidized exchange coverage: premiums capped
at 9.5% of income
$44,100-$66,200;
200-300% of FPL
 Job-based coverage, or
 Subsidized exchange coverage: premiums capped
at 6.3 – 9.5% of income
$29,300-$44,100;
133-200% of FPL
CHIP
• Job-based coverage, or
• Subsidized exchange coverage:
premiums capped at 3% - 6.3%
of income
<$29,300 for a
family of four;
< 133% FPL
Medicaid
Medicaid
Children
Adults
(non-disabled adults,
not eligible for Medicare)
Family income based on 2009 federal poverty income levels for a family of four
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Medicaid and Faith
Tikkun Olam (Healing the
World)
 Jewish theologic concept dating to early Rabbinic Period
 Maimonides expanded to society as a whole
 Luria expounded the concept most clearly as part of the
mystic tradition (Kabbalah)
 Jewish tradition celebrates and honors our obligations to the
community
 Maimonides – Hierarchy of charitable acts
 Seventh Noachite commandment links Jewish tradition to
social justice
Christian and Moslem
 Jesus ministry to the poor
 Islam –
 Zakah –
 clearly linked to social justice