How Medicaid Works

A Chartbook for Understanding Utah’s Medicaid Insurance and the Opportunity to Improve it

What is Medicaid?

Medicaid is a public healthinsurance program for low-income people that wasstarted in 1965.

Medicaid covers children,pregnant women, seniorsover age 65, and people withdisabilities.

In Utah, over 400, 000 peoplereceived health coveragethrough Medicaid in 2013.

Medicaid is jointly financedthrough federal and statedollars, and is administratedby the state.

Utah currently pays 30% ofMedicaid costs, and thefederal government pays 70%of Medicaid costs.

Source: 2014 Utah Annual Report of Medicaid & CHIP

The Elderly (Ages 65+)

4%PCN (Ages

19-64)5%

Pregnant Women

6%

Visually Imparied & People w/ Disabilities

12%

Parents (Ages 19-64)14%Children

59%

Who Gets Medicaid in Utah?

Source: Utah Department of Health

Medicaid eligibility levels determinewho can receive coverage. States seteligibility levels based on personalincome and assets. Eligibility levels forchildren, parents, and pregnantwomen include a 5 percent incomedisregard.

Childless adults are not eligible forMedicaid in Utah. Some may qualifyfor the Primary Care Network (PCN).

PCN covers only primary care services:• Visits to a primary care doctor• Limits four prescriptions per month• Dental exams, dental x-rays,

cleanings, and fillings• Immunizations• Eye exam; no glasses or contacts• Routine lab services and x-rays• Emergency room visits (case-by-

case)• Emergency medical transportation• Birth control methods

PCN does not cover:• Inpatient hospital care• Mental health services• Substance Use Disorder Services• Specialty care (even with a primary

care doctor’s referral)

How Do Medicaid Costs Compare?

Source: Center on Budget and Policy Priorities Analysis

Because health care costshave been rising across theeconomy for many years,Medicaid costs have beenrising, too. When comparedto the state budget, whichshrunk during the recession, itcan look like Medicaid costsare rising rapidly.

Far from broken, Medicaid isactually very efficient.Medicaid has loweradministrative costs thanprivate insurance, and its rateof growth has been muchslower than private insurance.

4.6%

7.2%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

Medicaid (Per Beneficiary) Private Insurance Companies (PerBeneficiary)

Average Annual Growth Rate, 2000-2009

How Does the Healthy Utah Plan Change Eligibility?

Source: Utah Department of Health

The Affordable Care Act (ACA)offers states an option toexpand Medicaid eligibility foradults to 133 percent of theFederal Poverty Level (FPL).This is equal to an annualincome of $15,521 for anindividual, and $26,321 for afamily of three.

This expanded eligibilitywould primarily help parentsand other working adults whoare not offered coveragethrough their jobs and cannotafford other coverage.

What is the “Coverage Gap”?

53,000 uninsured Utahns live in the coverage gap. They make toomuch money or otherwise don’t qualify for Medicaid in Utah, yetearn too little to qualify for help on healthcare.gov.

Source: Utah Department of Health

53,000 Utahns Fall Into the Coverage Gap

Closing the coverage gap is a smartinvestment in the hard-workingpeople that call Utah home, raisetheir families here, and make theeconomy tick. More and moreUtahns are working but notgetting the health coverage theyneed through their jobs.

In fact, 66 percent of Utahns whowould be newly eligible forhealthcare coverage are working.And they are working the mostimportant sectors of our economy.

Workers in five of the state’slargest employment sectors havethe most to gain: Food ServiceWorkers; Sales; Office andAdministrative Support;Construction and Cleaning andMaintenance.

Are Utahns in the Gap Working?

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UNINSURED UTAHNS BY RACE/ETHNICITY (2012)

Source: US Census

*Other includes all other responses not included in the “White,” “Black or African American,” “American Indiana/Alaska Native,” “Asian,” and “Native Hawaiian or other Pacific Islander” race categories. Respondents reporting entries such as multiracial, mixed, interracial, or a Hispanic, Latino, or Spanish group in response to the race question are included in Other.

Utah’s ethnic communities aredisproportionality uninsured,yet they are not enrolling forMedicaid at the same rate astheir Caucasian counterparts.

*

How Are Utah’s Ethnic Communities Impacted?

Cases Served by Medicaid in Utah (2014)

Asian

African American

Native American

Pacific Islander

Caucasian

Other*

Source: Utah Annual Report of Medicaid & CHIP

4,800Military veterans and their spouses could get quality,

affordable healthcare coverage through Medicaid expansion.

3,800Uninsured Veterans

1,000Uninsured Veteran Spouses

Source: Urban Institute

2008-2010

Source: Urban Institute & Robert Wood Johnson Foundation’s ReportUninsured Veterans and Family Members: State and National Estimates of Expanded Medicaid Eligibility Under the ACA (2013)

How are Utah’s Veterans and Families Impacted?

Source: Urban Institute survey results released July 10, 2014

How Does Medicaid Expansion Effect Uninsured Rates?

States that closed theircoverage gaps have seen thenumber of adults withouthealth insurance coveragedrop by 37.7 percent over thelast nine months. Comparethat with just a 9 percentdrop in states, like Utah, thatdidn’t close the coverage gap.

This graph shows states thathave expanded theirMedicaid programs, and howthat has impacted theiruninsured rates.

Source: Gallup Healthways Well-Being Index; http://www.gallup.com/poll/174290/arkansas-kentucky-report-sharpest-drops-uninsured-rate.aspx?version=print

16%14%

11%12%12%

The federal governmentwill cover the vastmajority of the costs ofclosing the coverage gap.Other public healthprograms require far morestate investment.

Source: http://aspe.hhs.gov/health/reports/2014/FMAP2015/fmap15.cfm

How is the Healthy Utah Plan Paid For?

Fiscal YearFederal

Participation for Utah Medicaid

FY2004 74.67%

FY2005 72.14%

FY2006 70.76%

FY2007 70.14%

FY2008 71.63%

FY2009 79.98%

FY2010 80.78%

FY2011 71.13%

FY2012 70.99%

FY2013 69.61%

FY2014 70.34%

Average 72.92%

Source: Kaiser Family Foundation, Federal Medical Assistance Percentage (FMAP) for Medicaid and Multiplier

What Happens if the Feds Back Out?

The federal funds are availablenow and are being used by 27other states (including Arizona,Colorado, New Mexico).

If the promised federal matchrate is reduced, Utah can endthe new coverage.

The federal government’scommitment to Medicaid hasbeen strong for decades.Averaging 72.92 percent matchfrom the federal governmentfor the last eleven years.

Source: Public Consulting Group, State of Utah Medicaid Expansion Assessment

How Much Federal Dollars is Utah Losing Out on Per Day?

Twenty-seven states havechosen to reject federal moneyintended to provide healthcoverage to low-incomeAmericans. This decision meansthose states are leaving billionsof tax dollars on the table, andthat 5 million Americans willremain uninsured. This counterquantifies the amount ofmoney Utah has lost out on todate.

Since January 1st, 2014, Utahhas rejected nearly $800,000per day that would providecoverage to 110,000 Utahns

How Much Will Utah Have to Pay?

With all of the savings that theHealthy Utah Plan can bring tothe state, including behavioralhealth savings, inpatientservices for prisoners, andsavings from ending oldprograms (PCN), the state willnot have to pay to run theHealthy Utah Plan until FY18.

The cost to run the program willgradually increase per year, asthe federal match rate graduallydecreases from 100% match inFY17 to 90% match in FY2020.

-$25,162

-$4,062

$13,138$22,238

$38,938

$55,038

-$40,000

-$20,000

$0

$20,000

$40,000

$60,000

$80,000

$100,000

FY 16 FY 17 FY 18 FY 19 FY 20 FY 21

State Net Cost for HUP (in $1,000’s)

Net State Cost for Healthy Utah Plan(Total Cost minus Savings/Assessments)

(*) Revised consensus numbers (12/16/14)(*) Savings assumes a $10m/year provider assessment

How Do We Pay For An Expansion?

Assess healthcare providers that will receiveincreased payments from the increase in thenumber of covered individuals ($10 M annually)

Savings to public assistance programs ($18.7 Mannually)

New tax revenues created from new federalspending ($15.4-20.3 M annually)

Re-appropriate savings from programs paid forat lower match rates ($6.2 M annually) i.e.Primary Care Network (PCN), Utah PremiumPartnership (UPP), and Primary Care Grants

Master Settlement Agreement (MSA) or theTobacco Settlement Payments ($14.5 Mannually)

Source: Governor’s Medicaid Expansion Work Group

What Would the Healthy Utah Plan do for the Health of Utahns?

3,100 diabetics could get their

medications

5,300 Utahns suffering from

depression would get coverage

856 women would have

access to mammograms

2,981 women would have

access to pap smears

1,655 uninsured Utahns would

avoid bankruptcy caused by unpayable

medical bills

110 Utahns would not die prematurely in 2014 because

they could access the preventive care they need

Source: 2014 NOTALYS Analysis: Estimates are from 2 sources: 1) "Opting Out of Medicaid Expansion: The Health and Financial Impacts, Dickman et al, posted on Health Affairs, January 30, 2014; and 2) Substance Abuse and Mental Health Services Administration, National Survey on Drug Use and Health, 2008 - 2010 Data, accessed at http://store.samhsa.gov/shin/content/PEP13-BHPREV-ACA/NSDUH_state_profile_Utah_508_final_extra.pdf

Does Healthy Utah Get Rid of Bad Incentives?

Expanding eligibility limits allows for continuous coverage as Utahns move up theincome scale, without having to worry about loss of benefits.

For working parents, maintaining eligibility is a high-wire act. Because the maximumallowable income is so low, working parents can end up losing their eligibility withjust a little overtime or even a promotion that comes with a slightly higher salary.

Melissa is a 24-year old Utah mom who works

and pays taxes.

Last week Melissa’s boss offered her a better job…and a

$2,000 raise.

Melissa and her daughter receive health insurance through Utah

Medicaid.

But Melissa turned it down because extra income would cause her to lose her health

insurance.

Percent of the Federal Poverty

Level $7,865 $15,730 $62,920

Does the Healthy Utah Plan Impact the Prison System?

When the Public Consulting Groupdid a cost benefit analysis forUtah—it was estimated that SaltLake County’s Inmate MedicaidEligibility would increase 20%-87%if we expand Medicaid—same goesfor the Healthy Utah Plan.

This means that the costs would bepicked up by the federalgovernment, resulting in countycorrections savings. Utah canexpect to see higher eligibilitynumbers in our state prison.

The report also estimated thatabout 90% of DORA population fallsin the coverage gap. By coveringthese folks with the Healthy UtahPlan, we can expect to see a savingsof at least $2 Million per year

Washington state credits their expanded Medicaid program to:

• 21-33% lower re-arrest rates for three groups receiving SUD Treatment

• $5,000-$10,000 savings for each person treated

Ohio prisons credit $10M in state corrections savings to Medicaid expansion

A 2007 study of 2 counties in Florida and Washington over two years linked access to Medicaid with a 16% reduction in the average number of subsequent lock-ups.

Sources: PCG Report; Jeffery Swanson & Marvin Swartz, Duke University; Fletcher-Allen Healthcare/University of Vermont; http://www.bucyrustelegraphforum.com/story/news/local/2014/09/19/ohio-prisons-credit-m-savings-medicaid-changes/15906531/; http://www.governing.com/news/headlines/How-Medicaid-Expansion-Lowers-Prison-Costs-Recidivism.html

Are Uninsured Utahns Getting the Services They Need?

Source: http://dsamh.utah.gov/pdf/Annual%20Reports/2014%20Draft%20Annual%20Report.pdf

Source: Families USA Federal Poverty Guidelines

How Does the FPL Change with Family Size & Income?

Household Size 100% 133% 200% 250% 300% 400%

1 $ 11,670 $ 15,521 $ 23,340 $ 29,175 $ 35,010 $ 46,680

2 $ 15,730 $ 20,921 $ 31,460 $ 39,325 $ 47,190 $ 62,920

3 $ 19,790 $ 26,321 $ 39,580 $ 49,475 $ 59,370 $ 79,160

4 $ 23,850 $ 31,721 $ 35,775 $ 59,625 $ 71,550 $ 95,400

5 $ 27,910 $ 37,120 $ 55,820 $ 69,775 $ 83,730 $ 111,640

6 $ 31,970 $ 42,520 $ 63,940 $ 79,925 $ 95,910 $ 127,880

7 $ 36,030 $ 47,920 $ 72,060 $ 90,075 $ 108,090 $ 144,120

8 $ 40,090 $ 53,320 $ 80,180 $ 100,225 $ 120,270 $ 160,360

How Can I Learn More?

RyLee Curtis | Senior Health Policy Analyst |Utah Health Policy Project

801.706.7831| rylee@healthpolicyproject.org

Visit | www.healthpolicyproject.org