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Does expanding insurance coverage improve access to care?

February 27, 2012 in CHIP, Health Reform, Medicaid | 3 comments

Although Health Reform did little to reduce the cost of health care, it did make significant strides to expand access to care.  For low-income individuals, the increased access comes along two dimensions: expanded Medicaid eligibility and increased physician fees.  Specifically, Health Reform required to

  • Make all individuals with incomes below 138% of the Federal Poverty Line (FPL) eligible for Medicaid, and
  • Increase their Medicaid physician fee schedules, so that they are no lower than Medicare’s for evaluation and management services provided by primary care physicians.

Whereas the first provision is permanent, the second provision is to be in effect only for 2013 and 2014.

Which one will have a bigger effect? According to a paper by White (2012), paying doctors more improves access.

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Have States made any progress towards implementing Health Exchanges?

February 6, 2012 in CHIP, Health Reform, Medicaid | 2 comments

The answer depends on the state. Today, I examine an Urban Institute research paper that looks at this progress in more detail.

Dividing States into 3 Group

The most advance States fall into Group 1 (CA, CO, CT, DC, HI, IN, MA, MD, NV, OR, RI, UT, VT, WA, WV). These states have either enacted an exchange establishment law or in which the governor has established one by issuing an executive order. Massachusetts and Utah had already passed exchange laws before enactment of the ACA. All Group 1 states (except Colorado, Massachusetts and Utah) have received an exchange establishment grant.

Group 2 states (AL, AZ, DE, IA, ID, IL, KY, ME, MI, MN, MO, MS, NC, NE, NJ, NM, NY, PA, TN, VA, WI) have not yet established exchanges, but have demonstrated significant interest in doing so. Most notably, 17 of the 21 states have received level 1 federal establishment grants, which represent a second round of funding for state exchange development work beyond the initial state planning grants. Although Wisconsin has not received a level 1 federal establishment grant, Wisconsin is using federal funds to develop an IT system to fully integrate exchange eligibility determination and enrollment with state-based public insurance programs (i.e., Medicaid and CHIP). Recently, however, Wisconsin Governor Scott Walker has rejected all federal funding for implementation of the ACA. Of the remaining four states, Virginia and Wisconsin have passed legislation stating its intent to develop an exchange, although they have not yet passed exchange establishment legislation, New Jersey has establishment legislation pending in its legislature, and Pennsylvania’s governor has recently announced that his administration is taking steps to establish a state exchange.

Group 3 states (AK, AR, FL, GA, KA, LA, MT, ND, NH, OH, OK, SC, SD, TX, WY) do not meet any of the criteria for Groups 1 and 2 and are the furthest from successfully implementing the ACA provisions.

Correlation between Exchange Progress and Potential Increases in State Health Insurance Coverage

A research article from the Urban Institute finds that States with the ‘most to gain’ from the ACA are actually the most likely to fall into Group 3. States that currently have the least generous Medicaid programs and the largest share of uninsured workers are the least likely to have made significant progress in implementing the ACA provisions.

I can think of two reasons for this finding. The first is philosophical. These States began with less generous health insurance programs. Thus, the residents (or politicians) in these States may prefer to have less generous health insurance programs than other States. Hence the natural aversion to implementing the ACA provisions. The second reason is financial. Because these States have the largest share of uninsured individuals, they would also incur the largest percentage increase in cost to finance the ACA provisions. Although it is true that these States would likely receive the largest subsidies, these subsidies will not cover the full cost of the ACA implementation.

Questions States need to answer to implement an Exchanges

  • Should the exchange be run by an existing government agency, a new agency, a quasi-governmental entity or a not-for-profit private entity?
  • What should the composition of the governing board be?
  • How should the administrative costs of running an exchange be financed?
  • Should the exchange be able to actively negotiate with plans over premiums?
  • Can plans be excluded, or must all qualified plans be allowed to participate?
  • In computing premiums, should enrollees in the Small Business Health Options Program (SHOP) exchange and nongroup exchange markets be pooled together, or should their premiums be set separately?
  • What will be the role of agents and brokers in the exchange?
  • Should state insurance regulations be identical inside and outside the exchange?
  • How will Medicaid/CHIP eligibility and enrollment be integrated with the exchange?
  • Should the Basic Health Plan option be implemented?

Source: Blavin F, Buettgens M and Roth J “State Progress Toward Health Reform Implementation: Slower Moving States Have Much to Gain.” RWJF and Urban Institute Real Time Policy Analysis, January 2012.

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MEPS vs. NHEA

December 20, 2011 in CHIP, Data, Econometrics, Medicaid | No comments

Many researchers use household data sources to examine a variety of hypothesis.  The use of household data has many benefits including allowing for more detailed socioeconomic information (e.g., education, income) beyond what is contained in administrative claims files.  One drawback of household data is that extrapolations made from household survey data may not match national estimates.

For instance, this article examines how to align the Medical Expenditure Panel Survey (MEPS) to aggregate U.S. benchmarks provided in the National Health Expenditure Accounts (NHEA).  Today, I review some of these adjustments.

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State Governments Providing Health Insurance to More Children

October 28, 2011 in CHIP, HC Statistics, Medicaid | No comments

Of the 6.6 million uninsured children in the nation, 4.3 million are eligible for Medicaid or the Children’s Health Insurance Program (CHIP). Approximately 2.8 million children come from families at or near the federal poverty line (FPL).

Despite the fact that millions of children are uninsured, children’s participation rates in Medicaid/CHIP are increasing. Today I will review the results of an Urban Institute study examining trends in Medicaid participation rates for children.

Data

The authors use data from the 2008 and 2009 American Community Survey (ACS). This large survey data set has replaced the Census long form. The authors use the Integrated Public Use Microdata Series (IPUMS) version of the ACS.

Determining Eligibility

Three main characteristics determine a child’s eligibility: family composition, income, and immigration status.  Medicaid eligibility depends on the family’s income as a share of the federal poverty level (FPL).  The FPL threshold changes based on how many individuals are in the household.  Further, many States restrict Medicaid and CHIP access to citizens or legal residents.  Although survey data often indicate whether the individual is foreign born, the data do not contain information on whether the individual is a citizen, legal resident, temporary resident, or lives in the U.S. illegally.  This paper describes one methodology to impute immigration status from these survey data.

Results

  • The share of children without health insurance coverage fell between 2008 and 2009,despite the ongoing economic downturn;
  • Nationally, the rate of Medicaid/CHIP participation among children rose by 2.7 percentage points to 84.8 percent and cross-state variation in Medicaid/CHIP participation rates narrowed, as larger improvements occurred on average for states that had the lowest participation rates in 2008;
  • Six states (DC, Hawaii, Maine,Massachusetts, Michigan and Vermont) had participation at or above 90.0 percent in 2008 and 2009
  • Six states (Florida, Montana, Nevada, North Dakota, Texas and Utah) had participation rates below 80.0 percent in both 2008 and 2009
  • Participation gains occurred between 2008 and 2009 for children in each race/ethnicity, language, income and age group examined;

Source: Kenney GM, Lynch V, Haley J, Huntress M, Resnick D and Coyer C. “Coverage Gains for Children,” Urban Institute, RWJF Report, Aug 16, 2011.

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The President’s Proposal to “Live Within Our Means”

September 29, 2011 in CHIP, Home Health, Medicaid, Medicaid/Medicare, Medicare, Medicare Part D, Part B, Physician Compensation, Public Policy | 3 comments

President Obama released a proposal last week to jump start the economy and reduce the deficit.  The proposal includes many cuts to Medicare and increased cost sharing.  Senators Coburn and Lieberman are supporting these cuts.

Increased cost sharing is a common theme in Medicare, Medicaid, but also for other programs as well.  For instance, the proposal includes increases to TRICARE pharmacy benefit co-payments to be fall more in line with the most popular Federal employee health plan

The proposal, however, also has some interesting provisions.  For instance, it would require providers to secure prior authorization to perform advanced imaging.  This is one of the first moves away from the fee-for-service free-for-all towards managed care (read: rationing).

A pro-competition rule would prohibit ‘pay-for-delay’ where brand drug companies pay off other drug makers to delay their introduction of a generic into the market.  The FTC is charged with enforcing this requirement. The proposal also would reduce the exclusive period of generic biologics.  Weakening patent protection, for this authors perspective, is likely a good idea.

Specific changes under consideration which are related to medicare are highlighted below (with potential savings per year in parentheses):

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Federal Medicaid Spending: The Worst is Yet to Come

June 9, 2011 in CER, CHIP, Medicaid | 1 comment

As the economy worsened, Medicaid enrollment has risen.  In the short-run, however, States have been able to avoid large increases in Medicaid spending because the Federal government has footed the tab.  According to the HHS:

“Over the past three years, despite rising enrollment due to the economic recession, nationwide State spending on the Medicaid program dropped by 13.2 percent (equivalent to a 10.3 percentage point decline in the State share of the total costs of the program) as a result of the added Federal support provided to State Medicaid programs through the American Recovery and Reinvestment Act of 2009 (the Recovery Act). In 2009 alone, due to this action, State Medicaid spending fell by 10 percent even though enrollment in Medicaid climbed by 7 percent due to the recession. However, this enhanced Federal Medical Assistance Percentage (FMAP) support is set to expire on June 30, 2011.”

Additionally, in 2014, States will need to expand Medicaid to cover adults and children with income up to 133 percent of the Federal Poverty Level (FPL) (currently about $27,000 income for a family of three).  Again, the federal government will cover most of these costs.

Can the federal government expand services, maintain quality, and slow the growth rate of healthcare spending costs?  Some options for doing this include:

  • Beneficiary cost sharing.  Although regulations limit to some degree the amount of cost Medicaid can charge beneficiaries, economists have long shown that cost sharing reduces utilization and decreases cost.  Will this cost sharing decrease the rate by which Medicaid beneficiaries receive unnecessary services or will patients forego necessary care? [Healthcare Economist: The answer is both].  If patients forego preventive services, will hospitalization rates increase and aggregate spending increase [Healthcare Economist: In some cases yes, but on aggregate costs will go down with more cost sharing, especially if inpatient cost sharing increases].
  • Benefits: States have the ability to cut optional benefits; change the amount duration or scope of the benefit; or offer “benchmark benefits.”  Benchmark benefit plans must provide equal coverage to one the following existing commercial plans: the standard Blue Cross/Blue Shield preferred provider plan offered to Federal employees; state employee health benefit, or the largest commercial Health maintenance organization (HMO).
  • Improve Efficiency.  Examples include:
    • “Money Follows the Person” demonstration grants to help transition people from costly nursing home settings to more integrated community settings
    • Change payment policies to reduce unnecessary cesarean deliveries.
    • Improve post-acute care benefit to reduce costly hospital re-hospitalizations.
    • ACOs.  I have written much about these in the past.
    • Health Information Technology and Electronic Medical Record initiatives.
    • Provide more integrated care models for dual-eligible beneficiaries.
    • Reduce fraud through initiatives such as the Medicaid Integrity Institute (provides free training to State Medicaid agency staff), better screening of providers (as mandated by the ACA), and synergies with Medicare fraud investigations.

Will any of these interventions work?  Reducing cost means either reducing prices or reducing utilization.  Since cutting Medicaid prices would drastically reduce poor individual’s access to quality medical care, the only solution is reducing utilization.  The key is identifying eliminating care that is either unnecessary not cost effective (e.g., an MRI for any minor injury), even if many beneficiaries like costly interventions.

Source: U.S. Department of Health and Human Services. Medicaid Cost-Savings Opportunities, February 3, 2011

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Safety Net Patients in California

October 21, 2010 in CHIP, HC Statistics, Health Insurance, Medicaid | No comments

The California Health Care Foundation (CHCF) reviews how California’s safety net residents receive medical care.  Safety Net patients are considered those who have incomes below 300% of the federal poverty line.  Below is a list of governmental and non-governmental programs which serve California Safety Net residents.

This graph shows public program eligibility by poverty level for different types of residents.  These eligibility levels are from 2009 and will change once health reform is implemented.  In particular, Medi-Cal will be extended to more individuals.

One interesting point is that while adults with children are currently eligible for Medi-Cal if their income is below the poverty line, adults without children can only receive subsidized medical services through county programs.

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The Medicaid Medical Industrial Complex

September 19, 2010 in CHIP, Medicaid | 1 comment

“Across the nation, sizeable and forceful groups–a Medicaid medical industrial complex–support welfare medicine, many of them becoming entirely or partially dependent on its funding for their financial viability.  Their reliance on the low-income health program puts them at risk of adverse political decisions, but also drives them to exert disproportionate influence over policymakers.

Vested interests–professionals, pharmaceutical firms, hospitals, MCOs, nursing homes, and the like–have wielded increasing clout over the years in tandem with the ongoing devolution of power over the program.  In contrast, organizations advocating specifically for the medical needs of the poor have significantly less influence on state officials.”

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Explaining how Health Reform will alter Medicaid and CHIP

June 7, 2010 in CHIP, Medicaid, Public Policy | 1 comment

Health Reform, also known as the Patient Protection and Affordable Care Act (PPACA), drastically altered the health care landscape.  Congress included health exchanges, and individual mandate, and a number of other reforms into the bill.  Today, I focus on how Health Reform will affect existing programs which care for the nations poor.  In particular, CHIP funds medical care for many of the nation’s youth and Medicaid provides health insurance coverage to low-income Americans.  Both programs operate under a federal mandate, but are run at the state level.  The Kaiser Family Foundation outlines the Health Reform provisions that will alter both the Medicaid and CHIP programs.

To summarize these findings, I have created the following table.

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