M3.2 - Government Health Insurance Programs

government health insurance programs

• federal and state government provide affordable and comprehensive health insurance programs to vulnerable population

  • who are the vulnerable population?

    • the elderly, low SES (income, education, occupation), children, disabilities

  • what are some programs?

    • medicare/medicaid, WIC

    • money is a limited resource, which is why government focuses on supporting vulnerable population

• entitlement programs vs block grant programs

entitlement

• everyone who is eligible for and enrolled in the program is legally entitled to receive benefits from the program, beneficiaries may not be refused service for lack of funds or other reasons

• ex: medicare and medicaid

block grants

• a defined sum of money (often from the federal government to the states) that is allocated fr a particular program over a certain amount of time, beneficiaries may be refused service for lack of funds or other reasons, there is no legal entitlement to the benefits

• set amount of money set aside for a program, government must approve funding

• ex: CHIP (Childrens Health Insurance Program)

medicaid

• a federal state public health insurance program for the indigent

• program administration

  • federal vs state

• all states participate in Medicaid

  • but no two programs are exactly alike

• medicaid waiver programs

medicaid - eligibility

• medicaid generally covers low income

  • pregnant women

  • children

  • adults in families with dependent children

  • individuals with disabilities

  • elderly

    • dual enrolled or dual eligible

• must meet 5 eligibility requirements: categorical, income level, resources, residency and immigration status

• medically needy

• immigrants

medicaid - benefits

• medicaid covers extensive acute care and long-term care benefits

  • some benefits are mandatory, others are optional

  • early and periodic screening diagnostic tests (EPSDT) services

• deficit reduction act of 2006 (DRA)

  • A U.S. law passed to reduce the federal budget deficit by cutting government spending and tightening rules for programs like Medicaid and Medicare (ask)

medicaid - financing

• medicaid is jointly financed by the federal and state governments

• matching system

  • federal medical assistance percentage (FMAP) determines the matching rate; rate is tied to each states per capita income with poorer states receive a higher federal match and must be at least 50/50

  • state provides portion ($), federal matches

• beneficiary cost sharing

  • prior to DRA, very limited cost sharing allowed

  • DRA provides expanded cost sharing options

medicaid - provider reimbursement

• reimbursement levels vary by state and type of provider

  • states have a lot of discretion in setting rates

• fee-for-service provides paid on a state determined fee schedule

• managed care providers paid according to contracts between the state and the managed care organization

• medicaid reimbursement is typically much lower than private insurance or Medicare reimbursement

medicaid - waivers

• states may apply to the federal government for waivers of Medicaid requirements

• section 1115 waivers

  • secretary of health and human services may grant a section 1115 waiver to allow for a research and demonstration project that “assists in promoting the objectives” of Medicaid

  • use states as “policy laboratories” to test health reform ideas

    • allows states to run “experimental programs” but they must achieve Medicaids goals, used to test new ideas in healthcare policy

  • health insurance flexibility and accountability (HIFA) demonstration

    • A type of Section 1115 demonstration

    • Encourages states to:

      • Expand insurance coverage in flexible ways

      • Focus on cost control + accountability

      • Test alternative Medicaid approaches

affordable care act changes to medicaid: significant eligibility expansion

• all non-medicare eligible adults under 65 with incomes up o 133% of poverty will be eligible in every state

  • do not have to fit a category

  • standardized resource test

• also, must cover all children 6-19 at 133% of poverty

• immigrants still have 5 year bar but states have option to cover legal immigrant pregnant women and children who have been in the country greater than 5 years

affordable care act changes to medicaid

• benefits

  • newly eligible individuals entitled to essential health benefit package, not traditional Medicaid services

• financing

  • federal government pays 100% of newly eligible expansion for two years then phases down to covering 90% by 2020

• states have a maintenance of effort (MOE) requirement for adults and children

state childrens health insurance program (CHIP)

• a 10 year, $40 billion block grant program designed to provide health insurance to low income children whose family income is above the Medicaid eligibility level in their state

  • reauthorized in 2009 and extended in the ACA; Authorization through 2019, funding through 2015

• all states participate in CHIP

CHIP - structure

• three options for CHIP structures

  • separate CHIP

  • medicaid expansion CHIP

  • combination program

separate CHIP

• State creates a standalone insurance program just for kids

• Can design its own:

  • Benefits

  • Cost-sharing (copays, premiums)

  • Provider networks

• Most flexible option for states

medicaid expansion CHIP

• State uses CHIP money to expand Medicaid coverage

• Children are enrolled in regular Medicaid

• Must follow all Medicaid rules and benefits

• Simplest option; looks like traditional Medicaid

combination (hybrid) CHIP

• State uses both Medicaid expansion and a separate CHIP program

• Some children go into Medicaid, others into a separate CHIP plan

• Depends on income levels or eligibility groups

• Mix of the first two options

CHIP - financing

• federal-state matching program

  • “enhanced” match - CHIP match will always be higher than the states Medicaid match

• states receive payments in 2 year allotments

CHIP - eligibility

• states may cover children up to 300% Federal Poverty Level (FPL)

  • children who are eligible for Medicaid must be enrolled in Medicaid, not CHIP

• states may impose waiting periods, enrollment caps, and other measures to limit expenses

CHIP - benefits

• CHIP programs must provide “basic” benefits

  • inpatient and outpatient hospital care

  • physician services

  • laboratory

  • x-ray

  • well-baby & well-child

• CHIP program may provide additional benefits such Prescription drugs, Mental health, vision, and hearing

• benefit packages are based on one of five benchmark health plans

  • similar to DRA option in Medicaid

• overall, medicaid programs generally offer much more comprehensive benefits than CHIP programs

CHIP - Waivers

• states may apply to the federal government for waivers of CHIP requirements

• states may cover pregnant women without a waiver but no new waivers will be granted for other adults

• states also use waiver for premium assistance

medicare

• a federally-funded health insurance program for the elderly and some persons with disabilities

• medicare is administered by CMS

  • ?

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medicare - eligibility

• medicare covers two main groups of people - elderly and disabled

• elderly requirements

  • be 65 or older?

  • meet work/ residency requirements?

• disabled requirements

  • have a qualifying disability?

  • receive disability benefits for a required period (social security insurance)?

medicare - benefits

• medicare split into 4 parts, each with its own set of benefits

  • part A: Hospital Insurance

  • part B: Supplemental Medical Insurance

  • part C: Managed Care

  • part D: Prescription Drug Coverage

part A

• trust fund funded through a mandatory payroll tax

• deductibles and cost-sharing paid by beneficiaries

part B

• general federal tax revenues

• monthly premiums, deductibles, and cost sharing paid by beneficiaries

part C

• receives funding for part A and B services through funding sources described above; plans may also require monthly premiums, deductibles, and cost sharing to be paid by beneficiaries

part D

• general federal tax revenues

• monthly premiums, deductibles, and cost sharing paid by beneficiaries

• state payments for dual enrollees

• “doughnut hole”

doughnut hole

• middle stage of Medicare Part D where you have to pay more for your medicines for a while before your costs go down again

medicare - provider reimbursement

• physicians

• hospitals

• managed care

physicians

• paid on a fee-for-service basis according to a Medicare fee schedule

hospitals

• paid on a prospective payment system based on diagnosis

  • diagnostic related groups (RDG) for inpatient care

  • ambulatory payment classification (APC) for outpatient care

managed care

• plans paid a negotiated capitated rate by the federal government

affordable care act changes to medicare

• new coverage for preventive services without cost sharing

• eventually closes part D doughnut hole

• short-term relief as well

• reimbursement changes

• cost changes to beneficiaries

• creation of independent payment advisory board

• CMS innovation center