Question 1

In his video on Medicare Dr. Darshak Sanghavi talked about how Medicare parts A & B were funded by a tax, while part D was controversial because it didn't have a plan to fund it contributing to the Federal Debt.  How is Medicaid funded or rather where does the Federal and State governments get the money?  Did they ever have a plan?  Do they have plans now?  How much has it contributed to the Federal and State Debts?

Accepted Answer

Unlike Medicare, Medicaid does not have specific taxes or a trust fund. The resources for Medicaid come out of the general funds of the state and federal budgets. Because there aren't specific revenue streams to compare to the costs of the program, it's difficult to say how much this particular program has contributed to the debt compared to other programs also funded from the general funds. However, it is safe to say that medical costs in general have grown much faster than general inflation, and that the program has indeed contributed to public debt.

Question 2

In the states where expansion of Medicaid occurred, will the feds pay 90% of total Medicaid eventually or only 90% of the expansion pool costs with the remainder being paid under the old state:federal split?

Accepted Answer

The video is not very clear on this point. It appears that the federal government will pay 90-100% of the cost of expansion, not the entirety of Medicaid:

CBO estimates show that the federal government will bear nearly 93 percent of the *costs of the Medicaid expansion* over its first nine years (2014-2022).  The federal government will pick up 100 percent of the cost of covering people made *newly eligible for Medicaid* for the first three years (2014-2016) and no less than 90 percent on a permanent basis.

Source: http://www.cbpp.org/research/how-health-reforms-medicaid-expansion-will-impact-state-budgets

Question 3

Why did the states think that 10% was too much to pay for Medicade? They were already paying about half of the cost before.

Accepted Answer

The reason governors usually gave for turning down the Medicaid expansion, was that they believed they would end up paying a much larger share of the cost in the long run. However, some governors said they opposed the expansion based on principle; they didn't want more government spending, even if it would financially benefit their state to do so.

In reality, it was likely a primarily political decision by each Governor. If they had more to gain by providing additional benefits to their state's citizens than they had to lose by siding with the president, then they chose to expand Medicare. If they would have suffered more by being seen as a "big government" sell-out, they probably chose not to expand.

Question 4

In minute 3:28 you mention that Medicaid is shared by the Federal and State Governments. How do they fund Medicaid respectively?
Additionally, on a specific-case basis are there any cost cap (maximum cost) in Medicaid? (for example, if somebody needs a procedure that would cost a lot of money, does Medicaid cover no matter the cost?)

Accepted Answer

How are they funded?
Unlike Medicare, Medicaid does not have specific taxes or a trust fund. The resources for Medicaid come out of the general funds of the state and federal budgets.

Medicaid maximum cost
To my knowledge, there is no maximum amount of money that can be spent on any one person. There are however rules that govern what services can and cannot be provided. In order for care to be provided it must be considered "medically necessary". Many expensive services aren't covered if there are less expensive ways to provide comparable care.

Question 5

Is there a demonstrated link between medical outcomes and state participation in Medicaid?

Accepted Answer

It's very difficult to asses the outcomes of medicaid, as the selection bias will almost always be huge. There is one example that we can look at though. In 2008, Oregon expanded Medicaid to a randomly selected group of newly eligible citizens. This allowed researches to study the effects of those that were able to get medicaid versus those that were not. Here is a synopsis of the results taken directly from the article:

`This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years, but it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain.`

One thing to note here, is that even though no significant results were found in the physical health of the population, it was only tested for two years. Almost all emergent care situations will be taken care of, even if the person doesn't have the means to pay for them. So it is understandable that health impacts from emergent care did not change. What is important, is that the use of preventative services went up. Anyone that works in the healthcare sector will tell you that this is almost always a good thing for the long-term health of a person. It's just that long-term health is difficult to assess over a 2 year period.

Question 6

A 68 Year old disabled will be covered under Medicare or Medicaid?

Accepted Answer

All U.S. citizens over the age of 65 who have paid into the Federal Insurance Contributions Act qualify to enroll in Medicare. A person may also qualify for, and be dually enrolled in, Medicaid depending on the requirements of the state in which he or she resides. As the Medicaid section of the Introduction to Health Care in the U.S. video outlines (around 10:35), some states have adopted the universal requirements of the Medicaid expansion of Patient Privacy and Affordable Care Act of 2010, other states have opted out.

Course: The Brookings Institution > Unit 1

Medicaid

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