A REPORTER'S TOOLKIT: MEDICAID
An Alliance for Health Reform Toolkit -
This toolkit will help you understand who the Medicaid program covers, how it is financed, how it differs from Medicare, how states can alter Medicaid through federal waivers, and what the future holds for the program. This resource also offers story ideas, selected experts with contact information, selected websites and a glossary.
This toolkit was compiled and written by Dinesh Kumar.
Selected ResourcesPlease email email@example.com if you find that any of the links mentioned in this toolkit no longer work.
Basics: Statistics, Eligibility, Costs
Federal and State Medicaid Financing
Reforms and Barriers to Enrollment - Federal Level
Reforms and Barriers to Enrollment - State Level
Medicaid & Children's Health
Medicare/Medicaid Dual Eligibility
Medicaid & Managed Care
Medicaid & Long-Term Care
Medicaid & Disparities in Care
Drawn from the Alliance for Health Reform's Find-an-Expert Service for reporters. Descriptions in quotes are written by the experts themselves. Credentialed reporters can see full profiles for these and other experts, including after-hours contact numbers, by going to www.allhealth.org/reporter_enroll.asp
Glossary on the Uninsured
ADVANCEABLE TAX CREDIT - A subsidy to help pay for health insurance that is available when the insurance premium is due, without having to wait until a year-end tax return is filed. Also see "tax credit."
ACTIVITIES OF DAILY LIVING (ADL) - An index or scale which measures a patient's degree of independence in bathing, dressing, using the toilet, eating and transferring (moving from a bed to a chair, for example). Used to determine need for long-term care and eligibility for payments for care by insurers.
BLOCK GRANT - A lump sum of money given to a state or local government to be spent for certain purposes. Normally, it is based on a formula, the objectives are broadly defined and the grant's source places relatively few limits on the money's use.
CAPITATION - Method of payment for health services in which a health care provider is paid a fixed amount for each person on the provider's patient roster, regardless of the actual number or nature of services provided to each person.
CARVE-OUTS - A payer strategy in which an HMO or insurance company isolates ("carves out") a benefit and hires another organization to provide this service. Common carve-outs include behavioral health and prescription drugs. The technique is intended to allow the insurer to better control its costs.
CASE MANAGEMENT - A process where a health plan identifies covered persons with specific health care needs, then devises and carries out for them a plan to achieve the best patient outcome in the most cost-effective manner.
CASH AND COUNSELING - A Medicaid long-term care waiver demonstration program that allows certain Medicaid beneficiaries to purchase their own personal care and related services. Medicaid provides a monthly allowance, the amount of which is determined after assessing the beneficiary's need for community-based long-term care services. Starting in 2007, states may implement similar capped programs covering costs of self-directed personal care services without a waiver.
CATEGORICAL ELIGIBILITY - Medicaid's eligibility pathway for individuals who can be covered. The program's 25+ categories can be organized into five broad groups - children, pregnant women, adults in families with dependent children, individuals with disabilities and the elderly. Certain individuals, notably single adults without children, cannot qualify for Medicaid, even if their incomes are low enough to meet financial eligibility standards.
CHRONIC CARE - Medical services provided to those a chronic condition, one that is not expected to improve, that lasts a year or longer or recurs, and may result in long-term care needs. Chronic illnesses include Alzheimer's disease, arthritis, diabetes, epilepsy and some mental illnesses. Contrast with "acute care."
COINSURANCE - A portion of the bill for a medical service, that is not covered by the patient's health insurance policy and therefore must be paid out of pocket by the patient. Coinsurance refers to a percentage, e.g., 10 percent of the total charge up to a specified maximum. Contrast with "copayment."
COMMUNITY HEALTH CENTER (CHC) - Organization providing comprehensive primary care to medically underserved populations, regardless of their ability to pay. These public and non-profit entities receive federal funding under Section 330 of the Public Health Service Act, as amended.
COST SHIFTING - The practice by which a seller of a health service, such as a hospital, increases charges for some payers to offset losses due to uncompensated or indigent care or lower payments from other payers.
CROSS-SUBSIDY - The concept of certain purchasers paying more for medical services than they otherwise would so that others can pay less (or nothing at all), or another activity can be funded. In the U.S. health system, this mechanism has been used to pay for medical services for the poor and uninsured, medical education and research.
CROWD-OUT - A phenomenon whereby expansions of public programs designed to extend coverage to the uninsured encourage some employers to drop coverage, or cause some employees to enroll themselves and/or family members in public coverage programs rather than employer-sponsored coverage.
DEDUCTIBLE - A fixed amount, usually expressed in dollars in the form of an annual fee, that the beneficiary of a health insurance plan must pay directly to the health care provider before a health insurance plan begins to pay for any costs associated with the insured medical service.
DEFICIT REDUCTION ACT OF 2005 (DRA) - The DRA made significant changes to the Medicaid program - for example, allowing states to increase premiums and cost-sharing for families and to base benefits on private plans. The law also tightened long-term care asset transfers and capped the amount of home equity that can be disregarded in measuring eligibility at $500,000. A DRA provision in effect since July 1, 2006 requires Medicaid beneficiaries to show proof of citizenship upon applying for or renewing their benefits. For more information, see www.kff.org/medicaid/7465.cfm.
DEFINED BENEFIT - A health insurance model used by an employer or government program where specified health services covered under the plan are standardized and guaranteed. The cost of providing the standard benefits may fluctuate. One example of a defined benefit plan is Medicare. Contrast with "defined contribution."
DEFINED CONTRIBUTION - A health benefit model used by employers or government programs where health services covered may fluctuate based on choice of plan, but the employer or government contributes a set amount (percentage or dollar amount) towards the purchase of the selected health plan. A defined contribution plan limits the financial liability of employers or the government, because the contribution is defined, or fixed. An example of a defined contribution plan is the State Children's Health Insurance Program. Contrast with "defined benefit."
DISPROPORTIONATE SHARE HOSPITAL (DSH) ADJUSTMENT - An increased payment under Medicare's prospective payment system or under Medicaid for hospitals that serve a relatively large number of low-income uninsured patients.
DUAL ELIGIBLE - A Medicare beneficiary who also receives either a full range of Medicaid benefits offered in his or her state, or help through Medicaid with Medicare out-of-pocket expenses. For more information, see www.cms.hhs.gov/DualEligible. Also see "qualified Medicare beneficiary" and "specified low-income Medicare beneficiary."
FEDERAL MEDICAL ASSISTANCE PERCENTAGE (FMAP) - Percentage used to determine the amount of federal matching funds for state Medicaid expenditures. By law, FMAP cannot be less than 50 percent or exceed 80 percent. Slightly higher Enhanced Federal Medical Assistance Percentages are used to determine matching payments for the State Children's Health Insurance Program (SCHIP). These payments cannot exceed 85 percent of the state's total SCHIP expenditures. For more information, see http://aspe.hhs.gov/health/fmap07.htm.
FEDERAL POVERTY GUIDELINES - Income amounts set each February by the U.S. Department of Health and Human Services used to determine an individual's or family's eligibility for various public programs, including Medicaid and the State Children's Health Insurance Program. Sometimes called Federal Poverty Level/Line (FPL). (The poverty guidelines are different from the U.S. Census Bureau's "poverty thresholds," which are used for Census statistical purposes.) For the 2007 poverty guidelines, see http://aspe.hhs.gov/poverty/07poverty.shtml
HEALTH INSURANCE FLEXIBILITY AND ACCOUNTABILITY (HIFA) DEMONSTRATION INITIATIVE - A Bush Administration initiative to encourage states to apply for certain Medicaid Section 1115 and SCHIP waivers. HIFA waivers make it possible for states to offer private health insurance coverage or employer-sponsored coverage, with subsidies, as an alternative to enrolling beneficiaries in traditional Medicaid or SCHIP. For more information, see www.cms.hhs.gov/HIFA
HEALTH OPPORTUNITY ACCOUNT (HOA) - A type of health savings account for Medicaid beneficiaries created by the Deficit Reduction Act of 2005 . States may deposit annual sums of up to $2,500 per adult and $1,000 per child into the account, to be used to pay for medical expenses not covered by the high deductible health plan with which the account is coupled. Beginning January 1, 2007, as many as 10 states could initiate HOA demonstration projects. Compare to "Health Savings Account" and "Health Reimbursement Arrangement."
HEALTH REIMBURSEMENT ARRANGEMENT (HRA) - A type of health insurance plan also known as "health reimbursement account" or "personal care account," HRAs are tax-preferred accounts with funds established by employers to reimburse employees for qualified medical expenses; often HRAs are paired with a high-deductible health plan. An HRA may be used by an employee to pay for medical coverage until funds are exhausted. Once the deductible is reached, normal coverage begins. Any unused funds are rolled over at the end of the year, but do not follow the employee once he or she changes jobs. Compare to "health savings account."
HEALTH SAVINGS ACCOUNT (HSA) - A type of health insurance plan similar to a Health Reimbursement Account, but which is owned by workers. An HSA is a tax-preferred savings account and is paired with a high-deductible health plan. Any employer can offer an HSA (or a self-employed individual can set one up on his or her own), and both employers and employees can contribute to it. The worker must pay for all services until the amount of the deductible is reached (in 2007, a minimum of $1,100 for an individual and $2,200 for family coverage). The worker can withdraw money from the HSA to pay for medical services under the deductible. Once the deductible is reached, normal coverage begins. Any unused funds are rolled over at the end of the year. Unlike HRAs, HSAs follow an employee when he or she changes jobs. Also see "health reimbursement arrangement."
HOME AND COMMUNITY-BASED SERVICES (HCBS) - State-designed HCBS encompass case management, adult day care, home health aide assistance, personal care, assisted living services and respite care. Section 1915(c) of the Social Security Act permits the HHS Secretary to approve Medicaid waivers that allow for long-term care services to be delivered in community instead of institutional settings. The Deficit Reduction Act also created a new capped HCBS option that allows states to offer these services without having to obtain administrative waiver approval. See "Medicaid Section 1915 Waiver."
HOME HEALTH CARE - Health services rendered in the home, including skilled nursing care, speech therapy, physical therapy, occupational therapy, rehabilitation therapy and social services. Medicare covers some home health care services if the beneficiary is homebound but does not require more than 35 hours of services per week. Medicaid pays for home health care services in 12 states.
INSTRUMENTAL ACTIVITIES OF DAILY LIVING (IADLs) - Activities relating to independent living, which include preparing meals, keeping a budget, purchasing groceries, performing housework and using a telephone. IADLs refer to skills beyond basic self care, or "activities of daily living."
INTERGOVERNMENTAL TRANSFER (IGT) - Transfer of funds among or between different levels of government, including state-owned or operated facilities and local governments. The term is most often used in Medicaid, where transfers of non-federal public funds to the state Medicaid agency are used to draw down federal matching funds. States also use IGTs to draw down federal "disproportionate share hospital adjustment" and "upper payment limit" funds.
LONG-TERM CARE (LTC) - Ongoing health and social services provided for individuals who need continuing assistance with activities of daily living and/or instrumental activities of daily living. Services can be provided in an institution, the home or the community, and include informal services provided by family and friends as well as formal services provided by professionals or agencies. Medicaid is the primary payer of LTC services in nursing homes.
MANAGED CARE - Care provided by a health care organization, such as a health maintenance organization (HMO) or preferred provider organization (PPO), that contracts to provide medical services to a group of enrollees in exchange for capitated monthly premiums. Payments to physicians and other practitioners in HMOs are often lower than fee-for-service payments.
MEANS-TESTING - Determining eligibility for government benefits based on an individual's lack of means, as measured by income and/or assets. Under Medicaid, means-testing differs for different eligibility groups (see "categorical eligibility").
MEDICAID - Public health insurance program that provides coverage for an estimated 60 million low-income persons for acute and long-term care. It is financed jointly by state and federal funds (the federal government pays at least 50 percent of the total cost in each state), and is administered by states within broad federal guidelines. Contrast with "Medicare."
MEDICAID SECTION 1115 WAIVER - Under Section 1115(a) of the Social Security Act, the secretary of Health and Human Services may waive most provisions of Medicaid law for demonstrations "likely to assist in promoting the objectives" of the program. Under long-standing policy, these waivers must be cost-neutral. Demonstration waivers may be granted for research purposes, to test a program improvement, or investigate a new way of delivering services.
MEDICAID 1915 (b) AND (c) WAIVER - Under Section 1915(b) of the Social Security Act, the secretary of Health and Human Services may waive any provision of Medicaid law that prevent states from limiting beneficiaries' ability to choose providers. Section 1915(b) waivers are often sought by states that hope to control costs through managed care. Under Section 1915(c), the Secretary can allow states to obtain matching funds for long-term care services provided to Medicaid beneficiaries in home and community-based settings. Waivers are effective for two years.
MEDICALLY NEEDY - A Medicaid category for income eligibility in which states can choose to cover individuals and families who quality for coverage because of high medical expenses, usually for hospital or nursing home care. To qualify, individuals must be categorically eligible and their monthly incomes minus accumulated medical bills must be below state income limits for the Medicaid program. This allows Medicaid coverage for people who have extensive health care needs but too much income to be eligible for Medicaid. Also see "spend-down."
MEDICARE - Federal health insurance program for virtually all persons age 65 and older, and permanently disabled persons under age 65, who qualify by receiving Social Security Disability Insurance. Contrast with "Medicaid."
MEDICARE SAVINGS PROGRAM - A series of Medicaid-financed provisions enacted by Congress beginning in 1988 to assist Medicare beneficiaries who do not qualify for a full Medicare benefits package. People enrolled in MSPs are often referred to as "dual eligibles" because they are usually eligible for both Medicare and Medicaid.
PREMIUM ASSISTANCE - The use of federal funds available through public health coverage programs -- especially Medicaid and the State Children's Health Insurance Program -- to purchase or help purchase private insurance.
PRIMARY CARE CASE MANAGEMENT, INITIATIVE, OR CLINICIAN - (PCCM/PCI/PCC) - A Medicaid managed care program in which an eligible individual may use services only with authorization from his or her assigned primary care provider. That provider is responsible for locating, coordinating, and monitoring all primary and other medical services for enrollees. Those services are usually paid on a fee-for-service basis.
QUALIFIED MEDICARE BENEFICIARY (QMB) - A person who is eligible for Medicare, has an income below 100 percent of the federal poverty level and has limited assets, is eligible to receive cost-sharing assistance if enrolled in the Qualified Medicare Beneficiary program. Under the QMB program, state Medicaid agencies are required to pay the cost of Medicare Part A and B premiums, deductibles, and coinsurance. For more information, see www.cms.hhs.gov/DualEligible. Compare to "specified low-income Medicare beneficiary."
SPECIFIED LOW-INCOME MEDICARE BENEFICIARY (SLMB) - A person who is eligible for Medicare, has an income of between 100 to 120 percent of the federal poverty level and has limited assets, is eligible to receive cost-sharing assistance if enrolled in the Specified Low-Income Medicare Beneficiary program. Under the SLMB program, state Medicaid agencies are required to pay the beneficiary's Part B premiums, but not deductibles or copayments. Also see "qualified Medicare beneficiary." For more information, see www.cms.hhs.gov/DualEligible.
SPEND-DOWN - Process by which individuals in many states can qualify for Medicaid because high medical expenses, usually hospital or nursing home care, reduce their monthly income to below state income limits for the Medicaid program. The amount that each individual must "spend down" is determined at the time eligibility is determined. Also see "medically needy."
STATE CHILDREN'S HEALTH INSURANCE PROGRAM (SCHIP) - A program enacted by Congress in 1997 that provides federal matching funds for states to spend on health coverage for uninsured kids. The program is designed to reach uninsured children whose families earn too much money to qualify for Medicaid but not enough to afford private coverage.
SUPPLEMENTAL SECURITY INCOME (SSI) - A federal income support program for low-income disabled, aged and blind individuals. Eligibility for SSI monthly cash payments does not depend on previous employment or contributions to a trust fund. Eligibility for SSI usually confers eligibility for Medicaid.
TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) - The block grant program that, in 1996, replaced categorical welfare assistance such as Aid to Families with Dependent Children. Under TANF, time limits are set for cash benefits, and recipients are expected to accept work or be enrolled in training programs. TANF was reauthorized in 2005 as part of the Deficit Reduction Act with $16.4 billion in annual funding through FY 2010. For more information, see www.acf.hhs.gov/programs/ofa/.
TRANSITIONAL MEDICAL ASSISTANCE (TMA) - Medicaid coverage for up to one year for families leaving welfare to become self-supporting through work. During this transition period, states are required to continue Medicaid benefits even if earnings increase. For more information, see http://opencrs.cdt.org/document/RL31698/.
UPPER PAYMENT LIMIT (UPL) - Federal regulatory payment limit governing what states can pay eligible public facilities for Medicaid services. The UPL is usually the rate Medicare would pay for the same service. In some cases, states request federal matching funds in amounts that exceed the state's standard Medicaid reimbursement rate, and use the new revenues generated for other goods or services. Also see "Intergovernmental Transfer."
1 Congressional Budget Office, "Statement of Donald B. Marron, Acting Director: Medicaid Spending Growth and Options for Controlling Costs," Testimony before the Special Committee on Aging, U.S. Senate, July 13, 2006. http://www.cbo.gov/ftpdocs/73xx/doc7387/07-13-Medicaid.pdf
2 Centers for Medicare and Medicaid Services, "2006 Medicaid Managed Care Enrollment Report," June 30, 2006. http://www.cms.hhs.gov/MedicaidDataSourcesGenInfo/Downloads/mmcer06.pdf
3 Kaiser Commission on Medicaid and the Uninsured, "New Survey Indicates Medicaid Enrollment Declines for the First Time in Nearly a Decade," Oct. 10, 2007. http://www.kff.org/medicaid/kcmu101007nr.cfm
4 Kaiser Commission on Medicaid and the Uninsured, "The Medicaid Program At a Glance," March 2007. http://www.kff.org/medicaid/upload/7235-02.pdf
5 Kaiser Family Foundation State Health Facts, "Total Medicaid Spending FY 2006," http://www.statehealthfacts.org/comparetable.jsp?cat=4&ind=177. This page also included individual spending for each state in 2006.
6 National Association of State Budget Officers, "The Fiscal Survey of States," June 2007. www.nasbo.org/Publications/PDFs/Fiscal%20Survey%20of%20the%20States%20June%202007.pdf
7 National Conference of State Legislatures (2007). "State Budget Actions FY 2006 and FY 2007." http://www.ncsl.org/programs/fiscal/sba06sum.htm
8 Kaiser Commission on Medicaid and the Uninsured, "Medicaid: A Primer," March 2007. http://www.kff.org/medicaid/upload/7334%20Medicaid%20Primer_Final%20for%20posting-3.pdf
9 Rowland, Diane (2005) "Medicaid - Implications for the Health Safety Net," New England Journal of Medicine 353(14): 1439-1441. http://content.nejm.org/cgi/content/short/353/14/1439
10 Kaiser Commission of Medicaid and the Uninsured, "The Medicaid Program at a Glance." March 2007. (www.kff.org/medicaid/7334-02.cfm)
11 AARP, "The Medicaid Matching Formula: Responding to States in Times of Need," March 2007. http://assets.aarp.org/rgcenter/health/fs134_medicaid.pdf
12 Kaiser Commission on Medicaid and the Uninsured, "State Fiscal Conditions and Medicaid," October 2006, p. 2. http://www.kff.org/medicaid/upload/7580.pdf
14 David M. Cutler and Jonathan Gruber, "Does Public Insurance Crowd Out Private Insurance" National Bureau of Economic Research Working Paper No. 5082, April 1995, http://www.nber.org/papers/w5082.v5.pdf, cited in Andrew M. Grossman and Greg D'Angelo, "SCHIP and 'Crowd-Out': How Public Program Expansion Reduces Private Coverage." Heritage Foundation, June 21, 2007. http://www.heritage.org/Research/HealthCare/wm1518.cfm
15 Kaiser Commission on Medicaid and the Uninsured, "Vermont's Global Commitment Waiver: Implications for the Medicaid Program." May 2, 2006. http://www.kff.org/medicaid/7493.cfm
16 Centers for Medicare and Medicaid Services, "Medicaid State Waiver Program Demonstration Projects - General Information," http://www.cms.hhs.gov/MedicaidStWaivProgDemoPGI/