Medicaid, CHIP & Community Health Centers

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Medicaid:  $377 billion in outlays;  10% of the budget

  • Brief Overview: Medicaid is a joint federal-state program that pays for health care services for low-income Americans.
  • Unlike Medicare, which is available without regard to income, Medicaid is designed primarily for people who have incomes at or below the Federal Poverty Level (FPL).
  • To qualify for Medicaid, beneficiaries must also fall within one of the several dozen specific eligibility categories that divide into three general groups: (1) families with children, (2) elderly people, and (3) people with mental or physical disabilities.
  • While the Federal government usually pays more than half the cost of Medicaid services, the program itself is administered by the States—subject to minimum Federal requirements on basic benefits that must be provided.
  • Medicaid pays for a broad range of services with an emphasis on: comprehensive care for children; mental health services; and long-term care for the elderly and disabled.
  •  As a result of the Affordable Care Act (ACA) and a subsequent Supreme Court ruling, each state has the option to expand eligibility for Medicaid to all nonelderly adults with income below 138 percent of the federal poverty guidelines (commonly referred to as the federal poverty level, or FPL). The people who will be newly eligible for Medicaid consist primarily of non-elderly adults with low income.  CRS: ACA Medicaid Expansion
  • The federal government’s share of Medicaid’s spending for benefits varies among the states. That share historically has averaged about 57 percent. Beginning in calendar year 2014, the federal government pays all of the costs of covering enrollees newly eligible under the ACA’s coverage expansion. From 2017 to 2020, the federal share of that spending will decline gradually to 90 percent, where it will remain thereafter. According to CBO’s estimates, those changes will result in a federal share of Medicaid’s spending that averages 60 percent by 2020.
  • Under the terms of Federal funding, required Medicaid services include inpatient and outpatient hospital services, services provided by physicians and laboratories, and nursing home and home health care.
  • Groups that must be eligible for Medicaid include children in low-income families and families who would have qualified for the former Aid to Families with Dependent Children program, certain other children in low-income families and pregnant women, and most elderly and disabled individuals who qualify for the Supplemental Security Income program.
  • States may choose to make additional groups of people eligible (such as individuals with income above the standard eligibility limits and those who have high medical expenses relative to their income) or to provide additional benefits (such as coverage for prescription drugs and dental services), and they have exercised those options to varying degrees.
  • Many states seek and receive federal waivers that allow them to provide benefits and cover groups that would otherwise be excluded.
  • Currently, almost half of Medicaid’s enrollees are children in low-income families, and just under one-third are either the parents of those children or low-income pregnant women.
  • The elderly and disabled constitute the remaining almost one-quarter of enrollees.  Expenses tend to be higher for beneficiaries who are elderly and disabled, many of whom require long-term care, than for other beneficiaries. In 2012, about 32 percent of federal Medicaid spending for benefits was for long-term services and supports, which include institutional care provided in nursing homes and other facilities as well as care provided in a person’s home or in the community. Overall, the elderly and disabled account for almost two-thirds of Medicaid’s payments for benefits.
  • Percentage of People Medicaid Covers (NY Times graphic)  June 2017
  • CBO: Medicaid and CHIP
  • CRS: Medicaid Financing and Expenditures Dec 2015
  • CRS: Medicaid – An Overview  Jan 2014
  • CBO: Overview of the Medicaid Program   Sept 2013
  • CRS: Comparing Medicaid and Exchanges – Benefits and Costs for Individuals and Families  June 2013
  • Kaiser Family Foundation: Medicaid Primer  March 2013
  • CRS: Medicaid Primer  July 2012

Medicare v. Medicaid

  • Medicare is an entitlement based on age (65 or older) or disability without regard to income;  Medicaid is a means-tested entitlement where eligibility is based on being at or near the Federal poverty level.
  • Medicare is a health insurance program similar to private sector health insurance, with specified coverage and beneficiary cost-sharing;  Medicaid is a health coverage program where States pay healthcare providers for services on behalf of beneficiaries, usually without any cost-sharing.
  • Medicaid assists millions of low-income Medicare enrollees (called “dual eligibles”) by paying Medicare premiums, deductibles and coinsurance.
  • Medicare is funded by federal payroll (HI) taxes, general tax revenues, and premiums; Medicaid is funded jointly by the Federal and State governments.
  • Medicare is national health insurance administered by the Federal Centers for Medicare and Medicaid (CMS); Medicaid is administered by the States.

Children’s Health Insurance Program (CHIP)

Community Health Centers

  • Overview from CRS:  The Health Center Program, which is administered by HHS, awards grants to outpatient health care facilities that provide care to medically underserved populations. The program’s annual funding has more than tripled between FY2002 and FY2016, increasing from $1.3 billion to $5.1 billion. This funding increase—a result of both increases in annual discretionary appropriations and supplemental funding—has resulted in more health centers, more patients seen, and more services available to these patients. The program’s funding increase is due, in part, to the Community Health Center Fund (CHCF), a mandatory multibillion-dollar fund established in the ACA.  This fund is available between FY2011 and FY2017. It was intended to increase health center appropriations above the level the program received in FY2008; however, the CHCF has partially supplanted annual appropriations since it began. The CHCF represents more than 70% of the Health Center Program’s FY2016 funding. Funding for the CHCF was extended in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA, P.L. 114-10), which provided $3.6 billion to support health center operations in each of FY2016 and FY2017 (a total of $7.2 billion).
  • CRS report on Community Health Center Fund