Medicaid is a United States health insurance program run and funded by states with federal oversight and financial contributions. The total annual federal contributions vary by state, reflecting the differing levels of poverty and states’ decisions about whether to participate in the Medicaid expansion created by the Affordable Care Act of 2010.
It’s the largest U.S. insurer in terms of lives covered, with 65.6 million people in the United States enrolled as of April 2020.
In contrast, the giant of for-profit insurers, UnitedHealth, reported having 48.4 million customers for its medical plans as of June 30. This tally includes 6 million in UnitedHealth plans that manage Medicaid benefits.
The federal Medicare plan for people age 65 and older is estimated to have enrollment this year of about 62 million, with some overlap with Medicaid.
The federal government has several options for waivers states can use to adapt Medicaid policies to respond to public health crises. And every U.S. state has altered its Medicaid health program to respond to COVID-19 pandemic, according to the data gathered by the nonprofit nonpartisan Kaiser Family Foundation.
Steps taken this year include temporary easing of eligibility requirements, expansion of access to telehealth services and changing rules on drug benefits to reduce how many trips people must make to pharmacies.
Medicaid has long been a go-to option for responding to U.S. public health crises, including current attempts to address concerningly high maternal mortality rates.
“When states are dealing with emergencies that are either local or regional, they turn to Medicaid,” says Benjamin D. Sommers, a professor at the Harvard T.H. Chan School of Public Health, who refers to Medicaid as the “workhorse” of the U.S. public health system.
For reporters who are covering health care at the local or national level, it’s important to have a handle on how Medicaid works. Here are six things you should know.
#1. The Affordable Care Act was enacted with an intent for all states to expand their Medicaid programs, but a 2012 Supreme Court ruling made Medicaid expansion an optional decision for states.
The ACA set the stage for expanding Medicaid to cover more working people with incomes too low to afford health insurance. (In practice, this statutory limit rises to 138% due to other adjustments made in calculations.) As of 2020, the federal government picks up 90% of the tab for what’s known in policy circles as the expansion population, according to the Medicaid and CHIP Payment and Access Commission (MACPAC). Earlier support had been more generous, with the federal government picking up 100% of the tab for this group.
The ACA was enacted with an intent for all states to expand their Medicaid programs, but a 2012 Supreme Court ruling made this an optional decision for states.
Many Republican governors have resisted calls from consumer groups such as Families USA to expand their Medicaid plans, with President Donald Trump persisting in his attempt to undo the ACA entirely. But there’s been a steady growth in the number of states that have expanded their Medicaid plans, even under GOP leadership, with the support of physician groups such as the Oklahoma State Medical Association.
Oklahoma last month became the 37th state to take formal action toward an expansion of its eligibility rules for Medicaid, according to a tally kept by the Kaiser Family Foundation.
Voters on June 30 narrowly approved, 50.5%-49.5%, a ballot question that kicked off the process of an expansion of Medicaid in Oklahoma.
That’s a notable result, given that Republicans account for almost half — 1.01 million– of Oklahoma’s 2.1 million registered voters. The state’s 738,256 Democrats accounted for 35% of its registered voters, with independents, 332,111, making up 16%, according to a January state tally.
In a January 2020 letter to directors of state Medicaid programs, the Trump administration outlined what it called its “Healthy Adult Opportunity” plan. This is intended to be a path for states to accept budget caps in exchange for federal permission to expand their Medicaid enrollment limit and to gain greater local control of Medicaid policies.
#2. If you’re covering Medicaid, you should be familiar with block grants.
Look for partisan debate over approaches to Medicaid funding to continue, no matter what the outcome of the 2020 presidential election.
Many Republicans in Congress back the idea of caps on Medicaid spending, at least the portion of its funding intended to cover adults without disabilities.
Congress to date has not acted on proposals to limit the federal commitment to state Medicaid programs through options such as block grants, which would give states a limited, pre-budgeted amount of money, write Rachel Sachs, an associate professor of law at Washington University, and Nicole Huberfeld, now a professor of health, law, ethics and human rights at Boston University School of Public Health, in a 2019 blog post in Health Affairs.
(Conservatives sometimes cite a proposal made by then President Bill Clinton, a Democrat, as evidence of his support for a form of Medicaid block grants. The Washington Post examined this issue and found Clinton proposed a per capita Medicaid cap to counter a GOP drive to convert the program’s open flow of federal funds into block grants.)
Switching to capped funding would be a “drastic policy change” for a program that has long been structured to target more aid to states where people tend to have low incomes, Sachs and Huberfeld write. Medicaid’s base level of funding is set through what’s called federal medical assistance percentage (FMAP).
“A poorer state such as Mississippi has a higher federal match rate (76 percent in 2019) than wealthier states (for example, New York at 50 percent),” Sachs and Huberfeld write. “In either case, for every dollar a state spends on Medicaid, it receives a matching amount of federal funds—without limit—making Medicaid a statutory entitlement for states participating in the program.”
Many Republicans remain intent on converting Medicaid funding into federal block grants.
In a February 2020 debate on the House floor, Rep. Bob Latta, an Ohio Republican, sang the praises of this approach.
“Block grants give states the flexibility to invest in their citizens’ best interests,” Latta said. ”It is plain and simple. Children, seniors, and individuals with disabilities will not be negatively affected by this option, and those in low-income communities will be greatly benefited.”
Among those objecting to the Trump administration’s plan was Rep. Michael F. Doyle, a Pennsylvania Democrat. Doyle described a shift toward Medicaid block grants as a threat to the flexible nature of the program.
“When the economy is bad, more people might need Medicaid, and when the economy is good, Medicaid payments shrink. This is common sense and good public policy,” Doyle said. “Yet the Trump administration wants to undo that. Instead, the amount of money that a state would receive would be flat, and states would have to adjust their coverages accordingly” during downturns.
#3: While Medicaid and Medicare are different, there is some overlap.
There were 61.2 million people in the United States enrolled in Medicare last year, of whom 52.6 million were aged 65 and older. Another 8.7 million were covered by Medicare due to disabilities.
There’s overlap between Medicare and Medicaid. There were about 12 million people eligible to be covered by both programs in 2018, according to the Centers for Medicare and Medicaid Services (CMS). This group is often referred to in health policy discussions as “dual eligibles.”
People who qualify for Medicare and Medicaid tend to be people with serious health problems and those who are frail and need significant help with daily living tasks.
About 4 in 10 people — or 41% — who qualify for both Medicaid and Medicare have at least one mental health condition. Almost half of this group — 49% — need long-term care services, according to CMS. Medicare payments are largely limited to covering the cost of medical services and products. Medicaid pays these kinds of bills, but also covers some costs for nursing homes.
The adults in the so-called dual eligible group drive much of the cost of Medicaid, but the program is also the dominant insurer for America’s children.
As of April, the most recent month for which the data is available, there were about almost 29 million children enrolled in Medicaid in 49 states, according to CMS. Another 6.7 million children were enrolled in the State Children’s Health Insurance programs (CHIP), which provide coverage for some children whose parents’ income exceeds Medicaid guidelines.
CHIP functions as a sister program to Medicaid. Enrollment estimates for people under 18 in Medicaid often fold in the CHIP numbers. If that’s the case, it’s good to note where the CHIP and Medicaid youth population figures have been combined.
But whether taken separately or combined with CHIP enrollment, Medicaid plays a large role in pediatric and adolescent medicine in the United States.
#4: It’s worth noting how your state’s Medicaid program has responded to the COVID-19 pandemic.
The Trump administration has taken several steps to give states more flexibility to alter Medicaid rules during the COVID-19 pandemic. CMS in March, for example, announced a series of Medicaid waivers giving states more flexibility on matters such as steps to allow reimbursement for medical care delivered in alternative settings due to evacuations of certain facilities.
The Kaiser Family Foundation has a detailed list of Medicaid-related actions taken by states in response to the pandemic.
#5. It’s also worth looking at how enrollment in Medicaid might expand in your region during the current economic downturn.
The combination of the economic downturn and the lingering effects on business of the COVID-19 pandemic could trigger an increase in enrollment in Medicaid. The Kaiser Family Foundation in May published estimates showing how many people in each state might become eligible for Medicaid due to job loss. To develop these estimates, Kaiser researchers drew upon pools of data from the Census Bureau, including the American Community Survey, and Labor Department statistics. There’s more information here on the foundation’s methods.
And there are continuing efforts to expand Medicaid enrollment beyond the short-term spike expected following the economic challenges of 2020.
The Kaiser Family Foundation maintains a map showing which states have expanded Medicaid, showing only 13 of them have not yet proceeded with plans to expand Medicaid.
And efforts continue in many of those holdout states. Missouri has a ballot question on Medicaid expansion slated for its voters on Aug. 4. The Missouri Chamber of Commerce and Industry has issued a statement supporting the expansion.
Many Republicans, including Trump, continue to call for the repeal of the ACA, a move that would end the Medicaid expansion. But the Medicaid expansion has continued in recent years with GOP-dominated states such as Utah using the ACA-created mechanisms to provide more working adults with access to medical care.
In discussing the Medicaid expansion, health policy experts note the lags in full adoption of the original program. Medicaid was created in 1965. But it was only in 1982 that Arizona became the last state to adopt this program.
#6. States file many public reports with CMS about their Medicaid programs
States’ reports to CMS about their Medicaid programs may prove a good source for story ideas. Many documents of interest are posted on CMS’ State Waiver Lists website.
Georgetown University’s Center for Families and Children, for example, posted a brief titled “Indiana’s Own Medicaid Waiver Evaluation Shows Evidence of Coverage Losses.”
Indiana used ACA money to expand its Medicaid eligibility under then Gov. Mike Pence, but also won permission from the Obama administration to impose certain requirements on the adults added to the program under this initiative. These included monthly premium payments for some enrollees.
In a 2016 article in Health Affairs, Pence’s advisers Seema Verma and Brian Neale described the required financial contribution as being a “way for members to demonstrate personal responsibility.” (Verma now serves as administrator of the Centers for Medicare and Medicaid Services.)
These requirements were also meant to “encourage members to stay engaged with their health plan, providers, and overall personal health,” Verma and Neale write.
But these requirements appeared to be a stumbling block for many people who were allowed to enroll in Indiana’s Medicaid coverage through the ACA expansion, according to the brief from Georgetown’s Center for Families and Children. This brief was written by Allexa Gardner, a research associate, and Joan Alker, executive director of Georgetown’s Center for Children and Families and a research professor at the Georgetown University McCourt School of Public Policy.
Gardner and Alker dove into Indiana’s renewal request for its Medicaid expansion. They found almost 6,000 people in 2018 had been disenrolled from Medicaid coverage for failure to pay initial premiums into Indiana’s HIP Plus plan.
“An additional 5,500 individuals with HIP Plus benefits were disenrolled and locked out of coverage for six months (they are barred from Medicaid coverage for this length of time),” Gardner and Alker report. “This means that a total of more than 11,000 beneficiaries lost coverage due to nonpayment of premiums.”
The University of Michigan maintains a web page, Healthy Michigan Plan Evaluation, for research done to monitor how well the Medicaid expansion has proceeded in that state.
The Centers for Medicare and Medicaid Services (CMS) long has allowed states permission though waivers to test policies intended to try different approaches to funding health care.
One of the most widely watched efforts at this time is North Carolina’s attempt to use Medicaid to address factors that can affect health beyond medical care.
The North Carolina Department of Health and Human Services last year released a standardized fee schedule for health-related social services — including, for example, housing support and healthy food boxes — reimbursed by Medicaid under the state’s Healthy Opportunities Pilots, as outlined a brief about this initiative posted on the website of the nonprofit Commonwealth Fund.
Besides the Commonwealth Fund and Kaiser Family Foundation, another nonprofit group that closely watches Medicaid is the Center on Budget and Policy Priorities. In addition, Congress advisers on the program, the Medicaid and CHIP Payment and Access Commission, also offered in-depth examinations of issues facing the program.
And CMS publishes an annual report on the finances and operations of Medicaid. Here’s the most recent copy of CMS’ annual update, 2018 Actuarial Report On The Financial Outlook For Medicaid.
For more help reporting on Medicaid, see our roundup of research on Medicaid’s expanding role in US health care.
For further help reporting on health care policy issues, see our 7 tips for reporting on surprise medical billing.