The Medicaid program has existed for 56 years, positioned as the health system’s safety net for low-income populations. The most recent data available indicates that Medicaid provides coverage for approximately 77.9 million people for everything from physician visits and inpatient and outpatient hospital services to nursing facility and home health services.
During the pandemic, 15 million people who lost jobs enrolled in Medicaid under the Families First Coronavirus Response Act, which was signed into law in 2020 in response to the economic downturn. At some point last year, as many as 93 million were enrolled in Medicaid because of “churn,” a persistent feature of enrollment that happens when employment status and household income changes prompt temporary enrollment.
On the financial side, Medicaid accounts for 16.7% of national health spending ($688 billion), with funding responsibility shared between states (32.4%) and the federal government (67.6%). On average, states spend 28.7% of their budgets on Medicaid, but it ranges widely based on coverage determinations for special populations (e.g., those with dual eligibility or people with an addiction) and economic circumstances in individual states.
Research shows that Medicaid coverage facilitates access to primary care services equivalent to privately insured populations, though the overall health status of Medicaid enrollees is slightly lower. The program is not without its critics: 12 states did not expand their Medicaid programs vis-à-vis the Affordable Care Act’s inducements, and many state legislators believe the fiscal viability of the program is fatal unless eligibility criteria are tightened and enrollees are required to make copayments or gain employment.
Looking ahead, there are three immediate challenges facing Medicaid for the remainder of the year: eligibility and state oversight, loss of temporary coverage due to the pandemic and lack of public support.
1. Eligibility and State Oversight
According to the Centers for Medicare & Medicaid Services, individuals may qualify for free or low-cost care through Medicaid based on income and family size. In all states, Medicaid provides health coverage for some low-income people, families and children, pregnant women, the elderly, and people with disabilities. In some states, the program covers all low-income adults below a certain income level.
The Issue
Each state sets its own standards for eligibility and how it addresses population health needs in women’s and children’s health, mental health, long-term care support for seniors and people with a disability, dental care and more. Complicating matters, in 37 states care coordination is delegated to private managed care organizations that are reluctant to share data, limiting the availability of timely clinical, financial and administrative data for overseers. And real-time data is necessary to monitor enrollment: the CMS Performance Indicator Project Data is based on preliminary reports from states that change significantly as more data is obtained.
The Challenge
State Medicaid directors need access to and analysis of clinical, administrative and operational data about the performance of their programs, but often find their private managed plans reluctant to share information and state budget leaders unwilling to fund efforts to address population health needs.
2. Loss of Temporary Coverage Due to the Pandemic
During the pandemic, enrollment in Medicaid increased by 8.9% (July 2020 to May 2021) and by 6.1% (July 2019 to July 2020) when 15 million people became unemployed. Congress authorized temporary coverage of these individuals through state Medicaid programs until April 15, 2022. The long-term impact of the pandemic on employment is unknown; some estimate as many as 4 million people will not return to the workforce.
The Issue
Since coverage ended April 15, the immediate future for these individuals’ coverage is unknown. The potential that many who were covered under the temporary program might go without insurance is a major concern to policymakers.
The Challenge
Loss of temporary coverage is an imminent danger to enrollees at a delicate time when their financial insecurity is heightened due to inflation. Food and energy price increases hit low-income households hardest, rendering copays and out-of-pocket requirements in some state Medicaid programs problematic.
3. Public Support
Polls show many in the population believe Medicaid is an unaffordable/unnecessary government entitlement program that benefits those not eligible and those who elect to forego purchasing coverage for themselves and their families.
The Issue
The reality is that 60% of adult Medicaid enrollees work full-time and/or part-time, and access to affordable employer-sponsored coverage for them is negligible. Furthermore, Medicaid coverage is associated with lower health costs: Access to regular primary care reduces unnecessary hospital and ED use, and care coordinated through high-value, in-network primary care practices used by managed Medicaid practices using restrictive formularies and optimal care pathways reduces enrollee health costs by as much as 25%.
The Challenge
Voter support toward Medicaid is critical to its sustainability. Longer term, Medicaid will be front and center in the 36 2022 governor races and significant in Congress’ fiscal year 2023 budget deliberations that began in March. Its future is inextricably tied to economic circumstances in individual states and the nation as a whole, and the mood of voters toward the health system.
Paul H. Keckley, PhD, is managing editor of The Keckley Report (pkeckley@paulkeckley.com).