Nationwide Kaiser Survey on Medicaid

Due to the enactment of the Patient Protection and Affordable Care Act (ACA), states are currently preparing for changes in Medicaid programs. In the original bill, the ACA would expand Medicaid eligibility to include eligibility for all adults with incomes up to 133% of the federal poverty level ($14,856 per year for an individual in 2012). Estimates from the Congressional Budget Office put the number of newly eligible individuals at 17 million by 2016.

In June 2012, the US Supreme Court ruled that the federal government’s authority to enforce the ACA Medicaid expansion requirement was limited and gave states the right to determine whether or when to implement the expansion. Concerns about reducing the federal deficit added to the changing landscape of state decision-making.

The Henry J. Kaiser Family Foundation’s Commission on Medicaid and the Uninsured recently released a report titled Medicaid Today: Preparing for Tomorrow. The report contains results from a 50-state Medicaid budget survey for state fiscal years (FYs) 2012 and 2013. It describes trends in Medicaid Spending, enrollment, and policy initiatives for FY 2012 and FY 2103 as well as policy changes in reimbursement, eligibility, benefits, delivery systems, and long-term care.

In FY 2012, as the economy began to improve and growth in Medicaid enrollment abated, Medicaid spending slowed to a near-record low. Expectations for FY 2013 include continuation of slow growth in the program. Across all 50 states, on average, FY 2012 total Medicaid spending increased by only 2.0%; the pace of Medicaid spending slowed to 3.2%, the lowest rate of growth since 2008. For the second consecutive year, Medicaid enrollment growth in FY 2012 was below initial projections.

For FY 2013, legislatures authorized an average of 3.8% total spending growth, a rate that is 1 of the 3 lowest rates of growth in total Medicaid spending in the past 15 years. Ten states budgeted for actual declines in Medicaid spending for FY 2013.

In FY 2012, cost-containment was a priority; 48 states implemented at least 1 new policy aimed at controlling costs and 47 planned to do the same in FY 2013. However, according to the report, “with small improvements in the economy, a number of states were able to make some targeted program improvements, including continued expansions of community-based long-term care options.”

In most states, levels of Medicaid eligibility remained stable, due in part to the ACA maintenance of eligibility (MOE) provisions, which limited states from restricting Medicaid eligibility standards or procedures. In FY 2012, 32 states reported moving forward with positive eligibility changes; 21 states reported similar changes for FY 2013. Conversely, a few states are moving forward with restrictions to Medicaid eligibility that are exempt from MOE provisions.

The survey found that states continue to adapt policies to expand managed care and enhance quality of care. In FY 2012, 20 states reported expanded use of managed care, primarily by expanding managed care into new geographic areas or by adding eligibility groups. For FY 2013, 35 states said they were expanding managed care, including 10 states that had plans to implement managed long-term care. Key objectives of Medicaid managed care are improvement in health plan performance, quality of healthcare, and improved outcomes.

Looking ahead, states are preparing for the implementation of the ACA and are currently making decisions about Medicaid expansion. States are choosing which insurance coverage model should operate in their state in 2014 as well as how to best proceed with the ACA Medicaid expansion. Although the June 2012 US Supreme Court ruling has left the decision whether to expand Medicaid eligibility up to each state, those that opt not to expand eligibility will have to forego federal funding, potentially leaving many citizens without coverage.

Even without the expansion, states are required to streamline and simplify the enrollment process for health coverage by 2014. Nearly all 50 states are moving forward with plans to take advantage of the 90/10 federal funding to upgrade or replace their Medicaid eligibility systems.