Thursday, May 27, 2010

Health Care Reform & KY Medicaid

As the the Federal Health Care reform legislation begins to take shape there will be a significant role for state's to play. A large piece of the puzzle to achieve universal coverage is Medicaid, which is a Federal program that is administered by the states and the states share in the costs of the program. The match rate for Kentucky is approximately 20% after adjustments made by the Federal stimulus monies, normally the match rate would be closer to 30%. This is generally a good deal for the states, because of the high Federal participation.  

But as the Medicaid rolls grow, due either to the poor economy or the Federal health care reform and their expanded eligibility for the program, the costs are going to go up for states. Kentucky will not be immune to those increases and with the current budget situation as an example of how cash-strapped Kentucky is, it is likely that we will have trouble meeting the increased costs of the Medicaid program going forward.

Kentucky Medicaid is a nearly $6 billion program, so meeting the Federal Stimulus 20% match at the state level is over a $1.2  billion proposition. Not to mention if the match rate goes back up to pre-ARRA levels. As the program grows that cost will as well. 

Here are a couple of articles on the potential increases in enrollment and how they could impact Medicaid.

Report: Number of Kentucky Medicaid patients will surge: (Herald-Leader) "The number of Kentucky residents with Medicaid coverage could shoot up by nearly 424,000 patients by 2019, and the federal government will foot most of the cost of their treatment.

The Kaiser Family Foundation on Wednesday released a study projecting nationwide increases in Medicaid enrollment over a five-year period beginning in 2014, when most provisions of the health care reform bill will take effect.

If Kentucky aggressively pursues enrolling new Medicaid patients, the percentage of uninsured low-income adults in the state would drop 77 percent, versus a 69.5 percent drop in the number of uninsured people nationally.

The state also stands to get a slightly larger than average share of its Medicaid expansion paid for by the federal government 95 percent of the costs of covering newly eligible Kentuckians from 2014 to 2019, versus a national average of 92.5 percent.

The study estimates that if states actively sought to enroll additional Medicaid patients the uninsured and those earning up to 133 percent of the federal poverty level the federal government would pay $531 billion of the additional health care cost, with states picking up $43 billion."


Health care reform's X factor: (Stateline.org) "

Nobody knows for sure how much expanding Medicaid will cost the states because it's impossible to say how many new people will sign up for the program. A new study says that new enrollments, and their associated costs, could run much higher than many states expected."


How much state Medicaid costs will go up as a result of the federal health care overhaul depends a lot on how many people enroll in the program. In Texas, which has one of the least generous Medicaid programs in the country, enrollments are bound to go up. In New York, which has one of the more generous Medicaid programs in the country, the issue is how many people who are currently eligible for Medicaid but not enrolled will ultimately sign up for the program.

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