Yesterday we talked about the first section of the new law, which creates a brand new program – exchanges and subsidies for people who can’t afford coverage on their own. The next section of the bill deals with changes to some existing programs– Medicaid, and SCHIP.
First, some quick background on Medicaid and SCHIP
Medicaid is a public insurance program for people with low incomes and resources. It’s funded by the federal and state government and is managed by the states. A lot of people think that all poor people are covered under Medicaid, but in most states individuals are only eligible if they also fall into certain categories: children, pregnant women, parents of eligible children, and people with disabilities. It’s estimated that 60% of poor people currently do not currently qualify for Medicaid.
And so in 1997, the State Children’s Health Insurance Program (SCHIP) was created to cover kids whose families make too much money to qualify for Medicaid, but not enough to afford private insurance. Again, it’s funded by both federal and state governments, and is managed by the states. One significant difference from Medicaid is that every couple years Congress has to vote on whether or not to reauthorize SCHIP.
Last year Medicaid covered nearly 47 million people, an increase of 7.5% over the previous year. In 2009, 7 million children were covered through SCHIP, although last year $33 billion was added to the program, enough to cover an estimated 4 million more kids by 2013.
All right, so that’s Medicaid and SCHIP now. Here’s how the new health law will affect those programs…
Improved Access to Medicaid
Whereas before, only certain categories of poor people were eligible, the new law will expand Medicaid coverage to anyone who makes less than 14,500 (or less than $29,000 for a family of four).
Also, eligibility for Medicaid will now be based solely on income- which means that if you lose your job and have no income, you won’t have sell your house and your car just to get your family covered under Medicaid. It’s estimated that 15 million more people will now be covered.
The “Cornhusker Kickback,” in which Nebraska was the only state to get a ton of money to help pay for all the new Medicaid enrollees, was cut out of the final bill. Now, every state will get federal money to pay for their new Medicaid enrollees. In the first year of the program they’ll get 100% funding, and that will gradually be reduced to 90% in 2020. Some states have already expanded Medicaid eligibility to cover everyone below the poverty line– those states will also get more federal money.
More support for SCHIP
The new law extends SCHIP though at least 2019. It maintains the current level of funding until 2016, when the federal government will increase it’s share of funding by 23%, to help states cover even more children under the program.
Individuals will be able to apply for and enroll in Medicaid or CHIP through streamlined, easy to use websites. And if you log into the website for your state’s health insurance exchange, it will tell you whether or not you’re eligible for Medicaid or SCHIP. Hospitals will also be able to presume eligibility– meaning that if you’re eligible for Medicaid but haven’t enrolled yet, you’ll still be able to get treatment.
New Long Term Care Options
The new law creates a “Community First” option for people in Medicaid with disabilities. This provision will make it easier for states to provide people with disabilities care in their home or in their community, instead of just sending them to a nursing home or hospital. Services might include help with dressing, bathing, and grocery shopping, which often enable people with disabilities to be independent and become or remain employed. The new law also instructs Health and Human Services to develop regulations making it easier for people with long term care needs to receive home and community-based care.
Medicaid doesn’t pay drug manufacturers for prescription drugs. Right now the program currently gets a rebate of 15.1% for brand name drugs- under the new law that discount will increase to 23.1%. The discount for generic drugs will increase to 13%.
Improved Coordination for Individuals Enrolled in both Medicare and Medicaid
One of the more confusing things about having a health care system as fragmented as the United States’ is that often people are eligible for more than one program. For example, some people are eligible for coverage through both Medicare and Medicaid– they’re called “dual-eligible individuals”- and each program covers certain services and each program has its own rules and regulations. The new law establishes a Federal Coordinated Health Care Office with the goal of improving quality and reducing costs for those who are eligible for both programs.
Incentives to Improve Care
The new law includes funding for a bunch of types of demonstration projects under Medicaid. We’ll talk about these in detail in a later post, but in general they’re designed to improve the coordination of care, and to reduce financial incentives for doctors and hospitals to order extra tests and procedures that won’t make you any healthier.
Maternal and Child Health Services
We’ll also talk more about this one later as well, but it’s worth highlighting: among industrialized countries the United States ranks almost dead last in rankings of infant and maternal mortality. Certain communities are much worse than others. Under the new law, money will be available for states to identify high need communities and to improve services there.
The law specifies that funding will be made available for:
- Maternal, infant, and early childhood home visiting programs
- Support, education and research on post-partum depression
- Personal responsibility education, meant to help reduce unwanted pregnancies and sexually transmitted diseases, and help prepare teenagers for adulthood.
- Abstinence education
Wow, that’s a lot of stuff. And this is only one section of the bill- no wonder it’s over 2000 pages. On deck for next week: Title 3- Medicare.