Figure 1

The Role of Public Programs in Health Reform

Diane Rowland and Robin Rudowitz

Henry J. Kaiser Family Foundation

for

Congressional Health Care Reform Education Project

Washington, DC

September 19, 2008

Figure 2

Health Insurance Coverage of the Total Population, 2007

Military/VA1%

Employer-Sponsored Insurance

53%

Uninsured15%

Private Non-Group

5%

Medicare14%

Medicaid/SCHIP13%

SOURCE: KCMU and Urban Institute analysis of March 2008 CPS.

Total = 298.2 million

Figure 3

Public Health Coverage Programs• Medicare (44 million)

– Universal coverage for 37 million elderly (ages 65 +) and 7 million disabled (under 65) based on entitlement for Social Security with no regard to income or medical history

– Federally financed and administered

• Medicaid (59 million)– Means-tested program that provides health and long-term care for low-income children

and their parents, elderly, and disabled– Financed jointly by federal government and states and administered by states

• SCHIP (6.1 million)– Builds on Medicaid to provide insurance coverage to low-income uninsured children

who are not eligible for Medicaid – Financed jointly by federal government and states with capped funding from federal

government and administered by states

• Veterans Health Administration and Military Health System – VHA provides coverage for and delivers health care to over 5 million veterans and their

families at its network of outpatient providers and hospitals– Department of Defense purchases and provides health care to over 8 million active

duty personnel and retirees and their dependents at military treatment facilities as well as the TRICARE program’s network of civilian providers

Figure 4

• Only nationwide health insurance program in US

• Most Medicare beneficiaries (77%) in traditional Medicare program (Parts A & B)

• Low administrative costs (2%)

• High provider participation including almost all hospitals and over 90% of physicians

• Financed by payroll tax, general revenues, and beneficiary premiums

• 14% of the federal budget and 19 % of national health expenditures

Key Features of Medicare

13%7%

Home Health

Physicians and Other Suppliers

Medicare Advantage

(Part C)

Hospice2%

Skilled Nursing Facilities

Hospital Inpatient

Hospital Outpatient/Other Part B

Outpatient Prescription

Drugs

Part A

Part B

Part A and B

Part D

30%

5%

21%4%

20%

8%11%

Total Benefit Payments, 2008 = $444 billionTotal Benefit Payments, 2008 = $444 billion

SOURCE: CBO Medicare Baseline, March 2008.

Figure 5

The A, B, C and D’s of Medicare• Part A – Hospital Insurance Program (44.5 million)

– Inpatient hospital, skilled nursing facility, home health, and hospice care– Funded by a payroll tax paid by employers and employees

• Part B – Supplemental Medical Insurance (41.5 million)

– Physician visits, outpatient hospital, preventive services, home health – Funded by general revenues, premiums (some income-related)

• Part C – Medicare Advantage plans (10.1 million)– Private plans, such as HMOs, Private Fee-for-Service, and MSAs– Integrates financing from Parts A and B

• Part D – Medicare Prescription Drug Benefit (25.4 million)

– Offered through private stand-alone prescription drug plans (PDPs) and Medicare Advantage prescription drug (MA-PD) plans

– Funded by premiums, general revenues and state payments for dual eligibles

Figure 6

Medicare’s Benefit Package is Less Generous Than Typical Large Employer Plans or FEHBP Plan

NOTE: The FEHBP (Federal Employees Health Benefits Program) standard option is offered through Blue Cross Blue Shield. Employer plans include dental benefits.

SOURCE: Hewitt Associates analysis for the Kaiser Family Foundation, 2008.

Medicare Typical LargeEmployer PPO

Plan

FEHBP StandardOption

Total Average Medical Spending, 2007 = $14,270

$10,610

$12,160 $11,780

Figure 7

Most Medicare Beneficiaries Have Supplemental Coverage, 2006

35%

19%

18%

16%

1%11%

Medicare Advantage

Employer-sponsored

Medicaid

Self-purchasedonly

None – Medicare fee-for-service only

Other public/private

NOTES: Percents rounded to the nearest whole number. SOURCE: Kaiser Family Foundation analysis of the CMS Medicare Current Beneficiary Survey Access to Care File, 2006.

Total Number of Beneficiaries = 39.8 Million

Figure 8

Medicare Per Capita Expenditures, 2004

AZ AR

MS

LA

WA

MN

ND

WY

ID

UTCO

OR

NV

CA

MT

IA

WIMI

NE

SD

ME

MOKS

OHIN

NY

IL

KY

TNNC

NH

MA

VT

PA

VAWV

CTNJ

DE

MD

RI

HI

DC

AK

SCNM

OK

GA

TX

IL

FL

AL

$0-$3,000 (19 states including DC)

$12,000 + (7 states)

$3,001-$6,000 (15 states)$6,001-$12,000 (9 states)

SOURCE: KCMU and Urban Institute estimates based on data from MSIS 2005.

Figure 9

Contribution of Health Care Costs and Enrollment Trends to Growth in Medicare Spending

0%

5%

10%

15%

20%

25%

30%

2007 2017 2027 2037 2047 2057 2067 2077

Medicare outlays net of beneficiary premiums as share of Gross Domestic Product (GDP):

SOURCE: CBO, 2007.

Historical trends in

health care cost growth

Enrollment trends

Current Medicare spending

K A I S E R C O M M I S S I O N O N

Medicaid and the Uninsured

Figure 10

Key Features of Medicaid• States administer program with federal funds and guidelines

– Operates as 50 distinct state programs with variation in eligibility, benefits, and provider payment

– Provides 44% of federal funds to states– Federal matching rates range from 50% to 76%

• Provides health insurance coverage for 29 million children and 15 million adults in low-income families and 8 million low-income persons with disabilities

• Provides supplemental health care coverage for 8.8 million aged and disabled Medicare beneficiaries

• Provides long-term care assistance to 1 million nursing home residents (41% of long-term care services)

• Accounts for 16% of national spending on health services and supplies and 7% of federal budget

• SCHIP supplements Medicaid covering an additional 6 million low-income children with enhanced match rate but capped federal financing

K A I S E R C O M M I S S I O N O N

Medicaid and the Uninsured

Figure 11

Enrollees Expenditures on benefits

Medicaid Enrollees and Expendituresby Enrollment Group, 2005

Children 18%

Elderly28%

Disabled42%

Adults 12%Children50%

Elderly10%

Disabled14%

Adults26%

Total = 59 million Total = $275 billion

SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute estimates based on 2005 MSIS data.

K A I S E R C O M M I S S I O N O N

Medicaid and the Uninsured

Figure 12

Medicaid Payments Per Enrolleeby Acute and Long-Term Care, 2005

Children Adults Disabled Elderly

Long-Term Care

Acute Care

$1,617$2,102

$13,524

$11,839

SOURCE: KCMU and Uninsured and Urban Institute estimates based on 2005 MSIS data.

K A I S E R C O M M I S S I O N O N

Medicaid and the Uninsured

Figure 13

Medicaid Expenditures by Service, 2006

Total = $304.0 billion

SOURCE: KCMU and Urban Institute estimates based on data from CMS (Form 64)

Inpatient Hospital

Ambulatory Care

Drugs

Other Acute

Payments to MCOs

Nursing Facilities

Mental Health

Home Care

Payments to Medicare

DSH Payments

AcuteCare59%

Long-TermCare36%

14%

11%

6%

7%

18%

3%

16%

5%

15%

6%

K A I S E R C O M M I S S I O N O N

Medicaid and the Uninsured

Figure 14

Medicaid Per Capita Expenditures for Nonelderly, 2005

AZ AR

MS

LA

WA

MN

ND

WY

ID

UTCO

OR

NV

CA

MT

IA

WIMI

NE

SD

ME

MOKS

OHIN

NY

IL

KY

TNNC

NH

MA

VT

PA

VAWV

CTNJ

DE

MD

RI

HI

DC

AK

SCNM

OK

GA

TX

IL

FL

AL

$2,000-$3,500 (17 states)

$5,500 + (6 states including DC)

$3,501-$4,500 (20 states)$4,501-$5,500 (7 states)

U.S. Average = $3,621

SOURCE: KCMU and Urban Institute estimates based on data from MSIS 2005.

K A I S E R C O M M I S S I O N O N

Medicaid and the Uninsured

Figure 15

44%

25%

50%

18%

41%

16%

37%

46%

33%

43%

16%

20%

17%

39%

43%

64%

19%

29%

Medicaid/Other Public Employer/Other Private Uninsured

Poor

Near-Poor

(<100% Poverty)

(100-199% Poverty)

Poor

Near-Poor

Poor

Near-Poor

Children

Parents

Adults without Children

Medicaid also includes SCHIP and other state programs, Medicare and military-related coverage.SOURCE: KCMU and Urban Institute analysis of March 2008 CPS.

Health Insurance Coverage of Low-Income Adults and Children, 2007

K A I S E R C O M M I S S I O N O N

Medicaid and the Uninsured

Figure 16

Access Problems by Insurance Status

4%9%

2%2% 3% 1%

52%

29%

23%

12%10% 10%

Medicaid Private UninsuredPercent Reporting:

Adults Adults Children

No Usual Source of Care

Needed Care but Did Not Get It

SOURCE: KCMU analysis of 2007 NHIS data and Summary of Health Statistics for U.S. Children: NHIS, 2006.

Children

K A I S E R C O M M I S S I O N O N

Medicaid and the Uninsured

Figure 17

Children’s Eligibility for Medicaid/SCHIP by Income, January 2008

AZAR

MS

LA

WA

MN

ND

WY

ID

UTCO

OR

NV

CA

MT

IA

WIMI

NE

SD

ME

MOKS

OHIN

NY

IL

KY

TNNC

NH

MA

VT

PA

VAWV

CTNJ

DE

MD

RI

HI

DC

AK

SCNM

OK

GA

*The Federal Poverty Level (FPL) for a family of four in 2008 is $21,200 per year.**IL and NY use state funds to cover children above 200% FPL.

TX

IL

FL

AL

185-199% FPL (9 states)

251-350% FPL (11 states including DC)

200% FPL (23 states)201-250% FPL (8 states)

U.S. Median Eligibility = 200% FPL

SOURCE: Survey by the Center on Budget and Policy Priorities for KCMU, 2008.

K A I S E R C O M M I S S I O N O N

Medicaid and the Uninsured

Figure 18

Medicaid Eligibility for Working Parents by Income, January 2008

AZAR

MS

LA

WA

MN

ND

WY

ID

UTCO

OR

NV

CA

MT

IA

WIMI

NE

SD

ME

MOKS

OHIN

NY

IL

KY

TNNC

NH

MA

VT

PA

VAWV

CTNJ

DE

MD

RI

HI

DC

AK

SCNM

OK

GA

*The Federal Poverty Level (FPL) for a family of four in 2008 is $21,200 per year.SOURCE: Survey by the Center on Budget and Policy Priorities for KCMU, 2008.

TX

IL

FL

AL

50- 99% FPL (21 states)20-49% FPL (13 states)

100-150% FPL (8 states)US Median Eligibility = 63% FPL151-275% FPL (9 states including DC)

K A I S E R C O M M I S S I O N O N

Medicaid and the Uninsured

Figure 19

The Low-Income Challenge for Health Reform

Other Adults

ParentsChildren

Children

Parents 17%

Other Adults 35%

Children14%

Parents

Total = 45.0 million uninsured

*200% of the Federal Poverty Level (FPL) for a family of four in 2008 is $42,400 per year.SOURCE: KCMU/Urban Institute analysis of March 2008 CPS.

Other Adults

<200% FPL

200-299% FPL

9%

4% 3%

11%

4% 3% 300% FPL +