main brochure - Health Policy Institute of Ohio

Ohio Medicaid Basics
February 2003
Ohio Medicaid provides a broad range of health services to 1.6 million low-income
working families, children, and aged, blind, and disabled Ohioans.
Introduction
a
Ohio Medicaid Basics
Enacted in 1965 at the same time as
Medicare through Title XIX of the federal
Social Security Act, the Medicaid program is
the largest of the federal-state partnerships
for low-income Americans. Medicaid
provides federal matching funds to states
for certain health care services for eligible
individuals.
Each state administers its own Medicaid
program. The federal Centers for Medicare
and Medicaid Services (CMS) monitor staterun programs and establish new
requirements for service delivery and
quality, funding, and eligibility standards.
State participation is voluntary and all
states have participated since 1982. Ohio
Medicaid began in 1968.
Ohio Medicaid:
• covers 1 out of every 3 births
• covers 1 out of every 4 children
• covers 1 out of every 4 seniors over
age 85
• spends a smaller portion on
administrative costs than 47 states
• pays for 70% of all nursing home care
in the state
• covers children in families up to 200%
of the Federal Poverty Level (FPL)
• covers working parents in families
earning up to 100% FPL
• covers Medicare premiums for
eligible seniors and people with
disabilities
Overview of Ohio Medicaid
Ohio Medicaid is administered by the Office
of Ohio Health Plans of the Ohio
Department of Job and Family Services
(DJFS). Each of Ohio’s 88 county-level DJFSs
also plays an important role in Ohio
Medicaid.
Medicaid represents a significant portion of
Ohio’s overall state budget. Ohio spends
approximately 24% of state funds on
Medicaid, making it the second-largest
budget item after education. As a result, an
increase in program costs can have a serious
impact on the overall fiscal condition of the
state.
Contents
Eligibility ........................................................ 2
Key Programs ................................................ 3
Mandatory Medicaid Services .................... 5
Delivery Systems .......................................... 6
Financing and Expenditures ....................... 9
Controlling Medicaid Expenditures ........ 12
Why Changing Medicaid Isn’t Easy ........ 13
An Ohio Parent’s View of Medicaid ........ 15
Online Resources ........................................ 16
Endnotes ...................................................... 16
Although the majority of people enrolled in Ohio
Medicaid are families and children, the majority
of expenditures pay for services to aged, blind,
and disabled Ohioans.
Eligibility
Ohio Medicaid E ligibility
C o v er ed
Populat ions
Incom e
Guidelines*
<200% Federal
Poverty Level
(FPL)
Children
(up to age 19)
Parents
<100% F P L
Pregnant
Women
<150% F P L
Disabled
Individuals
<64% FPL**
Ohioans
age 65 & over
<64% FPL**
Qualified
Medicare
Beneficiaries
<100% F P L
Institutional
Level of Care
Income less than
cost of care
* A sset
t est s and ot her f act ors
af f ect el i gi bi l i t y, whi ch i s
det erm i ned by t he count y
DJFSs.
** Deduct i ons
and except i ons
appl y. Peopl e m ay have m edi cal
expenses deduct ed f rom i ncom e
cal cul at i ons t o "spend down"
t o t hi s l evel .
2003 Federal Poverty
Levels (FPL)*
Annual Income
Family
S ize
100%
FP L
150%
FP L
200%
FP L
1
$8,980
$13,470
$17,960
2
$12,120
$18,180
$24,240
3
$15,260
$22,890
$30,520
4
$18,400
$27,600
$36,800
In general, Medicaid covers low-income children, their parents,
and aged, blind, or disabled people. However, certain income and
resource criteria must be met as well. Income criteria are largely
based on poverty guidelines established by the federal
government. Resource criteria—which largely apply only to aged,
blind, and disabled people applying for Medicaid—are based on
savings, home ownership, and other assets.
Parents and Children
The Ohio Medicaid program covers over 870,000 low-income
children and 400,000 low-income adults in families with children.
The majority of eligible adults in families with children are
women. Children represent the largest demographic group served
by Ohio Medicaid, with nearly half of all eligible Ohioans being
age 14 or younger. Pregnant women who meet certain income
criteria are also eligible for coverage during their pregnancy.
Aged
Approximately 33% of all Ohioans age 65 and over are currently
covered by Ohio Medicaid. Some are eligible because they receive
cash assistance through the Social Security Administration’s
Supplemental Security Income (SSI) program. Others have too
much income to qualify for SSI but have large medical or long-term
care expenses that reduce or “spend down” their incomes to qualify.
Blind and Disabled
An estimated 16% of Ohioans covered by Medicaid qualify for
services due to a “physical or mental impairment that inhibits
work and that has lasted or will last at least 12 months or result in
death.” This excludes disabled individuals who are first eligible
by virtue of age or income. Most individuals with a major
disability are eligible for cash assistance through SSI and therefore
qualify for Medicaid.
Others qualify by
“spending down” their
incomes on medical
expenses. Some people
with a disability also
receive Medicaid
assistance to help pay
their Medicare premiums.
* These appl y t o t he 48 cont i guous
st at es and D.C.
2
Ohio Medicaid Basics • February 2003
Key Programs
Ohio Medicaid consists of many programs. Four of the largest
programs are:
1. Healthy Families and Related
2. Healthy Start
3. Aged, Blind, or Disabled
4. Medicare Premium Assistance Program
1. Healthy Families and Related
The Healthy Families and Related program covers low-income
families and children. The majority of families covered in this
category are single-parent families. There are three divisions
within Healthy Families and Related: Healthy Families,
Transitional Medicaid, and Other Related Groups.
Healthy Families, previously known as Low-Income Families,
provides health care coverage primarily to low-income working
families. A small number of covered families also receive Ohio
Works First (OWF) cash assistance.
Although Healthy Families is a freestanding program, it was not
always so. Historically, Medicaid was not available to a family
unless they also received cash assistance. The Personal
Responsibility and Work Opportunity Reconciliation Act
(PRWORA) of 1996, sometimes called welfare reform legislation,
enabled Medicaid to become a stand-alone program. Families who
qualify can now receive Medicaid coverage without receiving cash
assistance.
On July 1, 2000, Healthy Families coverage was expanded to
families earning up to 100% of the Federal Poverty Level (FPL). In
addition, procedural changes made at that time allow families
who need only Healthy Families coverage and not cash assistance
to apply by mail. Also, new verification requirements allow
families to only have to provide proof of income, of other health
care coverage, and of pregnancy. These simplifications help
working families obtain medical coverage through Healthy
Families.
Transitional Medicaid provides temporary Medicaid coverage for
working families who had received Healthy Families coverage but
who now have earned incomes above the eligibility criteria. Under
this program, Medicaid eligibility is guaranteed for six months,
and can be extended for an additional six months if monthly
income is less than or equal to 185% FPL.
Other Related Groups includes “Ribicoff children,” certain 19 and
20 year olds who meet particular income and asset limits.
Ohio Medicaid Basics • February 2003
3
2. Healthy Start
Healthy Start provides health care coverage for children from
birth through age 18 in families with incomes up to 200% FPL.
Children in families with incomes at 151–200% FPL are eligible
only if they do not have other health coverage. Children in
families with incomes at or below 150% FPL are eligible regardless
of other health coverage.
Newborns are automatically eligible for 12 months of Healthy
Start coverage if the mother was eligible for Medicaid when the
baby was born. This 12-month period exists regardless of
subsequent changes in the mother’s income.
Pregnant women with family incomes up to 150% FPL also qualify
for Healthy Start. Coverage for the woman begins at confirmation
of pregnancy and ends two months after the end of the pregnancy.
In determining financial eligibility, the
pregnant woman’s family size includes the
number of babies expected as a result of the
State Children’s Health
pregnancy.
Insurance Program
The federal Balanced Budget Act (BBA) of 1997
amended the Social Security Act to create Title
XXI, the State Children’s Health Insurance
Program (SCHIP). In each state, SCHIP
provides health insurance for children in
families with income too high to qualify for
Medicaid but too low to afford private
coverage. The federal government matches the
state’s SCHIP spending at a higher rate than
that for Medicaid. In Ohio for FY 2002, the
federal match for Medicaid is 58.8%, but the
match for Healthy Start, Ohio’s SCHIP, is
71.2%.
Just before the BBA was passed, the Ohio
legislature passed its 1998–1999 state budget,
which included a Healthy Start expansion.
Ohio’s SCHIP was implemented as part of this
expansion in 1998.
Currently, uninsured children in families up to
200% FPL are covered by SCHIP, and Ohio
receives the federal SCHIP match rate for
services. Children in families up to 150% FPL
who have inadequate health insurance—i.e.,
underinsured—are also covered by Ohio
Medicaid, and Ohio receives the federal
Medicaid match rate for services.
4
3. Aged, Blind, or Disabled
Ohioans who are age 65 and older, who are
blind, or who have a major disabling
condition are covered under the Aged,
Blind, or Disabled (ABD) program. These
Ohioans account for 29% of all Ohio
Medicaid consumers.
Approximately 41% of individuals covered
by the ABD program are eligible by virtue
of age. Many people age 65 and older who
qualify for Medicaid also have a disability,
but they first became eligible for Medicaid
due to age, not disability.
People with disabilities account for about
59% of people in the ABD program. People
of all ages with a wide variety of
disabilities, such as blindness, mental
retardation, or severe mental illness, can
qualify if their disability, income, and
resources meet certain criteria.
The Healthy Families and Related programs
also include some people with disabilities.
Certain low-income people with disabilities
receive Healthy Families or Healthy Start
Ohio Medicaid Basics • February 2003
because their condition does not meet the
criteria for the ABD program. Or,
individuals may choose to enroll in Healthy
Families or Healthy Start rather than the
ABD program because the enrollment
process is easier. Others may select the ABD
program because they need long-term care
services not available through Healthy
Families or Healthy Start.
4. Medicare Premium Assistance
Program
The federal government requires that state
Medicaid programs pay Medicare
premiums, deductibles, or coinsurance for
qualified people enrolled in Medicare Parts
A or B. Many would argue that Medicaid
substantively underwrites the Medicare
program. Ohio Medicaid uses several
categories of Medicare Premium Assistance
Programs to meet this requirement.
Mandatory Medicaid
Services
States are required to cover a minimum set
of services under Medicaid, including:
• inpatient hospital services;
• outpatient services, including those
delivered in Rural Health Clinics and
Federally Qualified Health Centers
(FQHCs);
• physician services;
• nursing facility services and home
health services for people age 21 and
older;
• skilled home health services for adults,
including durable medical equipment
(optional for others who need durable
medical equipment);
• family planning services and supplies;
• lab and X-ray services;
• nurse-midwife, certified family nurse
practitioner, and certified pediatric
nurse practitioner services;
Ohio Medicaid Basics • February 2003
Optional Services Covered by
Ohio Medicaid
States may opt to cover additional services,
which also qualify for federal matching funds.
Ohio covers the following optional services
under Medicaid with a focus on preventive
care for Ohio’s most vulnerable residents:
• ambulance and ambulette services;
• additional durable medical equipment
and supplies;
• self-administered prescription drugs;
• speech and hearing services, including
hearing aids;
• services of licensed practitioners,
including podiatrists, chiropractors,
physical therapists, mechanotherapists,
psychologists, and private duty nurses;
• intermediate care facility services,
including those for people with mental
retardation;
• hospice care;
• dental services, including dentures;
• vision services, including eyeglasses;
• certain prosthetic and orthotic devices;
• home health services for consumers who
require less than a skilled nursing facility;
• community alcohol and other drug
addiction treatment services;
• freestanding ambulatory clinics and
outpatient health facilities;
• community mental health services; and
• waiver services.
While some of these services are considered
“optional,” most are central to effective health
care (i.e., prescription drugs and dental care
and mental health services). In many cases,
eliminating “optional” services would
increase utilization and costs of some
mandatory services, particularly emergency
room care and hospitalizations. In addition,
certain segments of the population, like
families with mentally retarded children,
depend upon these optional services for care,
making these services difficult to discontinue.
5
• medical and surgical services of a dentist;
• transportation; and
• screening and treatment services to all eligibles under the age
of 21 under the Early Periodic Screening, Diagnosis, and
Treatment (EPSDT) program (called “HEALTHCHEK” in
Ohio).
Delivery Systems
Services covered by Medicaid are bundled into two benefit
packages: Primary and Acute Health Care and Long-Term Care. In
addition, the Ohio DJFS operates the Hospital Care Assurance
Program under Ohio Medicaid.
Primary and Acute Health Care
Medicaid’s Primary and Acute (P&A) Health Care package
provides physician, hospital, laboratory, medications, preventive
care, family planning, and other services. People have access to
P&A services through either the Fee-for-Service system or the
Managed Care system, depending upon the type of Medicaid for
which they are eligible. The P&A Health Care package also covers
prescription medications for all Ohio Medicaid consumers.
In the Fee-for-Service system, Medicaid beneficiaries present a
Medicaid card when they access health care. The Ohio DJFS pays
for services based on an established fee schedule, though a few
providers are paid on a cost-based schedule.
The Managed Care system started in 1978, when the Ohio DJFS
first contracted with managed care plans (MCPs) in an effort to
ensure access to services and quality of care as well as to better
predict Medicaid costs. As of October 2002, approximately 400,000
Ohioans were enrolled in one of six licensed Medicaid MCPs.
About 40% of Healthy Family and Healthy Start consumers are
enrolled in MCPs operating in
15 counties.
Managed care helps assure access to a
primary care provider, emphasizes
preventive care, and encourages the
appropriate utilization of services in the
most cost-effective settings. MCPs
provide services beyond those
required in the Fee-for-Service
system, including grievance
processes and call centers for
member services.
6
Ohio Medicaid Basics • February 2003
Prescription Medications are increasingly becoming a core
feature of health care for all Americans. Ohio Medicaid’s
pharmacy expenditures have more than doubled in the past five
years, including an 18.8% increase in prescription drug spending
in 2000. Other states are also seeing increases, and, nationally,
these recent increases are believed to be due to:
• price inflation (22%),
• a shift to higher-priced medications (36%), and
• an increase in the number of prescriptions filled (42%).1
Although the rising cost of prescription medications is a critical
issue, Ohio Medicaid’s prescription program compares favorably to
other states. A recent study shows that, when compared to Ohio:
• 42 states experienced higher rates of growth in their drug
programs in 1999 to 2000,
• 45 states had higher average costs per
prescription,
Ohio Access for People with
• 39 states paid higher dispensing fees,
Disabilities
and
Changes in the aging and disabled
• 42 states paid higher product costs than
populations are affecting the way services are
Ohio.2
organized and delivered in Ohio. Many of the
traditional, institutional-based services offered
to these populations are now being offered in
Long-Term Care
The Long-Term Care (LTC) benefit package
community-based settings, such as the
provides additional services to people who
person’s own home or an assisted living
have chronic or disabling conditions and
facility.
meet certain “level of care” criteria. LTC
In 2001 the Governor announced Ohio Access, a
services fall into two categories based on the
statewide blueprint for long-term care
setting in which services are delivered.
developed in conjunction with consumers,
Because LTC services are rarely covered by
providers, and community representatives.
private insurance or Medicare, Medicaid is
The Office of Budget and Management
the primary source of coverage for many
coordinated this initiative with the
who need these services.
participation of the Departments of Job and
Facility-Based Care covers services provided
Family Services, Mental Health, Mental
in certain residential settings and accounts
Retardation and Developmental Disabilities,
for the largest portion of Ohio Medicaid
Health, Aging, and Alcohol and Drug
costs. In fact, Ohio Medicaid is the leading
Addiction Services.
payer of nursing facilities in the state, as it
Goals for Ohio Access include that Ohio’s
covers 70% of all days of care for nursing
seniors and people with disabilities:
facility residents.
• live with dignity in the settings they prefer;
Medicaid also covers care in residential
• have access to safe, high-quality, long-term
facilities for developmental disabilities,
care services wherever they live; and
including mental retardation. All 6,000
• control funds available for their care and are
Ohioans living in intermediate care
involved in choosing services and
residential facilities for the mentally
caregivers.
retarded are Medicaid consumers.
Ohio Medicaid Basics • February 2003
7
Community-Based Care incorporates a number of programs into
a framework that increasingly emphasizes the delivery of services
in settings other than institutional or nursing facilities, settings
such as the home or community. The Ohio Home Care Program
provides home care services to all eligible Medicaid consumers
depending on their medical needs.
Ohio also uses Home- and Community-Based Service (HCBS)
Waivers to allow certain Medicaid consumers to remain in the
community—including remaining in their own homes—with
supportive services rather than move into an institution to receive
the care they need. Waiver services are available on a limited basis
and eligibility is based on income,
resources, and level of care required.
What’s a Waiver?
Federal law requires that Medicaid consumers
have freedom of choice of providers, that the
program is available statewide, and that
services are available in amount, duration, and
scope sufficient to achieve their purpose.
States can also choose to cover optional
services and eligible groups. Some options are
specifically described in the Social Security
Act, while other options are available through
“waivers.” The term “waiver” is used
whenever an exception to federal law has been
granted to the state by the Centers for
Medicaid and Medicare (CMS). For example,
Home- and Community-Based Care waivers,
provided under Section 1915(c), allow people
to receive Medicaid-covered care in the
community or at home rather than in a
nursing facility.
In 1989, Ohio implemented a 1915(b) waiver,
which waives the freedom of choice
requirement so a state can implement a
managed care program. In 1996, Ohio
implemented a Section 1115 demonstration
waiver, which allows for research and
demonstration of comprehensive health
program reforms, to implement a managed
care program, OhioCare. When this waiver
expired in 2001, Ohio Medicaid assessed the
OhioCare program objectives and decided to
change the 1115 authority to a 1915(b)
authority.
8
Ohio currently has four HCBS waiver
programs, all of which are funded by
Medicaid: PASSPORT, the Ohio Home Care
Waiver, the Individual Options Waiver, and
the Residential Facility Waiver. In response
to the growing demand for more waiver
slots, Ohio increased the number of
residents served through HCBS waiver slots
from roughly 10,000 in 1992 to nearly 50,000
in 2002.
For any given individual, home care is less
expensive than institutional care. Also, the
evidence suggests that those who enter
institutional care settings generally do not
return home. Therefore, prevention of
institutional care is important both for
quality of life and for cost containment. The
HCBS waivers help prevent institutional
care.
A difficult tension is created as expansion of
coverage for community-based services
broadens the potential pool of individuals
who might choose waiver services. As
program eligibility expands, higher
utilization of community-based services can
quickly deplete the per-person savings.
Hospital Care Assurance Program
The Hospital Care Assurance Program
(HCAP) assures that care is available for a
wide range of medically underserved
Ohio Medicaid Basics • February 2003
populations. Through HCAP, Ohio meets the federal requirement
to provide additional payments to hospitals providing a
disproportionate share of uncompensated services to indigent
people. In exchange for receiving HCAP funds, hospitals must
provide basic, medically necessary hospital services free of charge
to people whose incomes are at or below 100% FPL. In 2001,
participating Ohio hospitals had more than 325,000 HCAPeligible outpatient visits and nearly 30,000 HCAP-eligible
inpatient discharges.
HCAP assesses and collects fees from each hospital, which are
pooled and used to draw down federal matching funds. These
funds are then distributed back to hospitals relative to each
hospital’s share of the total statewide indigent care services
delivered.
Financing and Expenditures
Between 1987 and 2000, federal Medicaid matching funding to
states increased from 26% of the federal budget ($108 billion) to
43% ($246 billion).3 Much of the complexity in the Ohio Medicaid
budget is the result of trying to maximize these federal matching
dollars through interdepartmental fund transfers and other
strategies.
Medicaid Financing
Ohio Medicaid is funded through Ohio General Revenue Funds
(GRF) and federal matching funds based on the Federal Medicaid
Assistance Percentage (FMAP). Ohio’s FMAP match for FY 2002 is
50% for Medicaid administrative activities, 58.8% for Medicaid
services, and 71.2% for SCHIP.
Medicaid accounts for 16% of Ohio’s GRF but 31% of the
GRF if the federal match is included. Of total state
spending, including GRF and non-GRF funds,
Medicaid accounts for 24% of the state budget.
The Ohio Medicaid Budget for State Fiscal Year
(SFY) 2003 is $8.5 billion, an 8.0% increase over
SFY 02. However, nearly 10% of the 2002 Ohio
Medicaid budget is funded with non-GRF sources,
including $150 million from the state’s Budget
Stabilization Fund, which is a one-time source not
available for future years.
Ohio Medicaid Basics • February 2003
Medicaid as a portion of all Ohio
state spending
(SFY 2001)
9
Medicaid Expenditures
In 2001, Ohio Medicaid spent $5.26 billion, or almost 70% of its
budget, on:
• nursing facilities ($2.46 billion),
• hospitals ($1.6 billion), and
• prescription medications ($1.2 billion).
Families and children constitute the largest segment of the Ohio
Medicaid population (71% of covered Ohioans) but account for
less than 25% of all Ohio Medicaid
costs. In fact, state data suggest
Ohio Medicaid Spending by Provider Category
that a significant portion of overall
Medicaid costs are associated with
a relatively small number of
consumers.
The prediction and control of
Medicaid spending is far more
difficult than for other state
programs. Medicaid expenditures
are heavily influenced by
economic conditions and other
factors beyond the control of
administrators and legislators. For
example, as incomes decrease,
more people are eligible for
Medicaid. At the same time, state
tax revenues are also decreasing. The result is that Medicaid costs
increase while states are experiencing their greatest economic
challenges.
Identifying Causes of Spending Increases
In general, the chief causes of Medicaid’s spending growth are the
same factors increasing private health insurance costs. A recent
survey of Medicaid officials in all 50 states and the District of
Columbia identified the leading reasons for Medicaid expenditure
growth as:
• prescription medications,
• enrollment growth,
• medical inflation and utilization, and
• long term care costs.4
The projected average annual growth rate for Medicaid through
2005 falls between the growth rates projected for Medicare and for
private insurance.5
10
Ohio Medicaid Basics • February 2003
Ohio Medicaid Caseloads SFY 95–01
Medicaid spending is a
function of changes in the
number and types of
consumers enrolled. A recent
3-year increase in enrollment is
likely the result of:
• expanded eligibility
criteria,
• a growing aging
population,
• simplification of the
application process,
• increased outreach activities,
• a weakened economy, and
• a natural correction after decreases in
enrollment when Medicaid was delinked from welfare in
1996.
Of federal Medicaid spending growth between 2001 and 2002,
57% was due to people in the ABD program, 28% was due to
children and families, and 15% was due to factors not related to a
specific population.6
The Ohio DJFS estimates that 75% of present spending increases
are due to costs of services, while 25% are due to increased
caseload.7 In general, elderly
and disabled people use
Ohio Medicaid per member, per month costs
medical care and medications
more often than the general
population. Therefore, cost
increases for these services
have an even greater impact on
the Medicaid budget.
A recent study estimated
Ohio’s long-term care and
other Medicaid costs through
the year 2025. Based on
historical levels of state
revenue, medical cost
increases, and demographic trends, the Medicaid program as
currently structured would consume the entire state budget in
25 years, in part due to the rising elderly population.8
Ohio Medicaid Basics • February 2003
11
Controlling Medicaid
Expenditures
In FY 2002, 45 states implemented cost containment measures
aimed at controlling spending growth. Most states expect FY 2003
to be an even more difficult budget year. Strategies states are using
to reduce expenditures are outlined below.9
Provider Rate Cuts or Freezes. A large number of states plan to
cut or freeze provider payments, especially automatic cost
increases tied to an economic price index for
hospitals or nursing homes.
How does Ohio compare?
Ohio’s per member per month (PMPM)
expenditures for three of the four Medicaideligible populations are at or below national
averages.
Nat ional
Aver age
Ohio
Aver age
Ohio's
Rank*
Adult s
$2,000
$1,530
29th
Childr en
$1,451
$1,241
45th
Disabled
$8,784
$8,719
25th
$10,308
$12,316
14th
Populat ion
Aged
Pharmacy-Related Actions. The most
common pharmacy cost-containment
actions were requiring prior authorization
of selected brand name products and
reducing costs of drug products by
increasing discounts or creating a
Maximum Allowable Cost (MAC) list for
generic medications.
Benefit Reductions. Several states reduced
benefits, including dental, home health,
podiatry, chiropractic, vision, psychological
counseling, and medical translator services.
* Rank i s based on t he st at e wi t h t he hi ghest PMPM
expendi t ures. Theref ore, a rank of 29t h m eans Ohi o
has t he 29t h hi ghest expendi t ures of al l 50 st at es.
Long-Term Care. Several states proposed
long-term care cuts, including instituting
new payment procedures, closing nursing
homes, and requiring that long-term care facilities have both
Medicare and Medicaid certification.
Copayments for Non-Pharmacy Services. Copayments are now
required in some states for services such as transportation, doctor
visits, non-emergency room visits, waiver services, and certain feefor-service ambulatory services.
Managed Care Expansions. Some states proposed managed care
expansions such as moving people from fee-for-service programs
into managed care, expanding primary care case management
(PCCM) statewide, requiring mandatory enrollment into PCCM,
and expanding risk-based managed care.
Disease Management Programs. Increasingly, states are using a
disease management approach to lower costs and provide more
timely, appropriate, and higher quality care. Specific disease
management programs target chronic conditions like asthma,
12
Ohio Medicaid Basics • February 2003
diabetes, congestive heart failure, hypertension, and chronic
obstructive pulmonary disease.
Eligibility Cuts. In FY 2003, 18 states planned eligibility cuts or
restrictions compared to 8 states in FY 2002. Of the 18 states,
3 enacted cuts that will eliminate coverage for a large number of
people on Medicaid.
Cost-containment strategies like these can be very complex. Often,
a policy change that appears reasonable can
produce an unintended consequence that
undermines the intent of the Medicaid
Medicaid’s Role in the
program or that causes increased spending
Economy
on other Medicaid services. For example,
Representing 12% of the U.S. gross domestic
reducing or freezing provider rates can have
product, health care is a large and growing
a serious impact on access to services and
part of state and local economies. Medicaid
could cause increases in emergency room
makes up a significant portion of the total
utilization or hospitalizations.
national spending on major health concerns.10
Case in point: Although Medicaid covers
Tot al nat ional
Por t ion
spending in
paid by
dental services for children, low payment
2000 (billions)
Medicaid
rates have reduced the number of dentists
willing to care for these children. Many kids
Tot al per sonal healt h
$1,130
16.7%
car e
live with untreated dental problems because
they can not afford routine care. These
Pr ofessional ser vices
$422
11.1%
children end up needing more expensive
Hospit al car e
$412
17.0%
emergency room services for severe pain,
abscesses, and other dental problems—
Pr escr ipt ion dr ugs
$122
17.2%
services for which Medicaid pays the bill.
Nur sing hom e car e
$92
48.2%
Ohio policymakers have these and other
difficult issues to consider as they work to
sustain Ohio Medicaid, a program important for the health of the
state. Ultimately, many believe that significant federal changes are
also necessary for the long-term health of the Medicaid program.
Why Changing Medicaid Isn’t
Easy
Ohio Medicaid is not a single program but rather a collection of
programs, services, and funding mechanisms that is part of the
increasingly complex health and human services system. In many
cases, an adjustment to one element of this system will have
unintended effects or consequences on other elements.
Ohio Medicaid Basics • February 2003
13
Therefore, policymakers, state administrators, and others use a
systems approach when considering changes to Medicaid.
Economic effects are especially considered, as Medicaid brings
new funding to the state through federal matches that fluctuate
relative to state spending.
Ohio Medicaid has an obvious impact on the lives of the lowincome individuals, children, and families it serves. Connections
between Ohio Medicaid and other important issues, however, are
not always as clear.
For example, Ohio Medicaid:
• helps maintain a healthy work force;
• helps reduce personal bankruptcies, the number one reason
for which is unpaid medical debt;
• helps kids stay healthy and succeed in school;
• supports welfare-to-work efforts; and
• supports nearly all state-funded health and human servicerelated agencies—including university medical schools,
mental health agencies, and health departments.
Medicaid also supports the state’s entire health care infrastructure
by helping to:
• reduce uncompensated care,
• promote earlier treatment in appropriate settings and reduce
preventable hospitalizations,
• decrease unnecessary emergency room use, and
• support education and training in academic medical centers.
Without the Medicaid program, these infrastructure costs would
be passed on to employers and their employees through higher
insurance premiums. In
addition, individuals, families,
and society as a whole would
For More Information about Medicaid
bear the human costs of
Ohio Medicaid Basics provides a brief overview of the Ohio
untreated illnesses.
Medicaid program. For more information about the
federal Medicaid program, including federal eligibility
requirements, benefits, financing, and administration,
please refer to The Medicaid Resource Book, a publication of
The Kaiser Commission on Medicaid and the Uninsured,
published by The Henry J. Kaiser Family Foundation. The
Medicaid Resource Book is available at www.kff.org or by
calling 800.656.4533.
For more information about Ohio Medicaid, please visit
the Ohio Health Plans program of the Ohio Department of
Job and Family Services at
www.state.oh.us/odjfs/ohp/.
14
Ohio Medicaid is an important
and complex system that
touches the lives of individuals
and families across the state.
Understanding the basics of
this system is an important step
toward improving the health of
millions of Ohioans.
Ohio Medicaid Basics • February 2003
An Ohio Parent’s View of Medicaid
The security of knowing that the kids can get what they need is so valuable
to us. I’m not afraid that the next trip to the doctor or a kid falling off a bike
will wipe us out financially.
And if one of the kids is running a fever, we don’t have to “play Russian
roulette” wondering if it’s bad enough to call the doctor and spend $100, or
should we wait, hoping it will get better on its own.
We really struggle with that, and hope we don’t make the wrong decision.
I’m grateful for this program, and we don’t take advantage of it by making
unnecessary trips to the doctor.
—Statement of John Reed, of Salem, Ohio; taken from the Kaiser Commission
on Medicaid and the Uninsured and Alliance for Health Reform briefing
“Medicaid Coverage for All Children Living in Poverty,” September 30, 2002.
Online Resources
• Agency for Healthcare Research and Quality—www.ahrq.gov
• Center for Health Care Strategies—www.chcs.org
• Center on Budget and Policy Priorities—www.cbpp.org
• Centers for Medicare and Medicaid Services (CMS)—www.cms.gov
• Children’s Defense Fund—Ohio—www.cdfohio.org
• Families USA—www.familiesusa.org
• Health Affairs—www.healthaffairs.org
• Heritage Foundation—www.heritage.org/Research/HealthCare
• The Kaiser Commission on Medicaid and the Uninsured—www.kff.org/kcmu
• National Association of State Medicaid Directors—www.nasmd.org
• National Center for Health Statistics—www.cdc.gov/nchs
• Ohio Department of Jobs and Family Services—www.state.oh.us/odjfs
• The Urban Institute—www.urban.org
Endnotes
1
Kaiser Commission on Medicaid and the Uninsured (2002). Medicaid Spending Growth: Results from a
2002 Survey. Menlo Park, CA: The Henry J. Kaiser Family Foundation.
2
National Pharmaceutical Council (2001). Pharmaceutical Benefits under State Medical Assistance
Programs. Washington, DC: Author.
3
National Association of State Budget Officers (2001). 2000 State Expenditure Report. Washington, DC:
Author.
4
Kaiser Commission on Medicaid and the Uninsured (2002). Medicaid Spending Growth: Results from a
2002 Survey. Menlo Park, CA: The Henry J. Kaiser Family Foundation.
5
Health Care Financing Administration (2001). National Health Expenditure Projections. Washington, DC:
Author.
6
Kaiser Commission on Medicaid and the Uninsured (2002). Analysis of CBO Medicaid Baseline. Menlo
Park, CA: The Henry J. Kaiser Family Foundation.
7
Bill Hayes, Ph.D., Assistant Deputy Director, Ohio Department of Job and Family Services (personal
communication, October 2002).
8
Begala, J.A., Ellis, D.A., Weiner, G.D.
(October 2002). Future Ohio Medicaid
Services and Spending for Older Adults
and People with Disabilities. Presented at
Ohio Medicaid Basics is a project of The
a meeting of the House Select
Health Foundation of Greater Cincinnati and
Committee on Medicaid Reform,
the George Gund Foundation. Statistics were
Columbus, OH.
provided by the Ohio Department of Job and
9
Kaiser Commission on Medicaid and the
Family Services (DJFS) unless otherwise
Uninsured (2002). Medicaid Spending
indicated.
Growth: Results from a 2002 Survey.
Menlo Park, CA: The Henry J. Kaiser
Additional copies of Ohio Medicaid Basics are
Family Foundation.
available by calling The Health Foundation of
10
Tobler, L. (August 2002). Medicaid:
Greater Cincinnati toll-free at 888.310.4904 or
Challenges and Opportunities. Presented
by visiting our website at
at a meeting of the Ohio Select
www.healthfoundation.org.
Committee on Medicaid Reform and
Select Committee on Quality Health
Care, Columbus, OH.
16
Ohio Medicaid Basics • February 2003