Shift from Fee-for-Service to Managed Medicaid: What is the Impact on Patient Care?

As states take on more responsibility with expanded Medicaid enrollment and management of exchanges in 2014, their direct and indirect impact on patient care will be subject to closer scrutiny.

Summary

A high level of attention is being placed on the Medicaid program as the ongoing implementation of the Affordable Care Act 2010 brings a significant new pool of patients into the program from 2014. Already, Medicaid accounts for 16 cents of every healthcare dollar spent in the U.S. and has grown faster than the rest of national health expenditure since 1999. For States, the stakes are high: 24 cents of every State budget dollar goes to supporting the Medicaid program.

As States take on more responsibility with expanded Medicaid enrollment and management of exchanges in 2014, their direct and indirect impact on patient care will be subject to closer scrutiny. Measuring and assessing the consequences of their actions on patient care will become more vital to this critical healthcare program

Key Findings 

Medicaid consumes 11% of the Federal government budget and 24% of State budgets 

  • In the U.S. Federal Budget of $3.6 Trillion in 2011, $0.11 of each dollar was spent on Medicaid, compared to $0.20 spent on defense.
  • Total State spending on Medicaid accounted for $0.24 of each dollar in the 2011 combined States’ budgets, surpassing spending on elementary and secondary education.
  • States spend between 9 cents (in WY and AK) and 34 cents (in IL, MO, and AZ) of every dollar on Medicaid.*
  • State funding for Medicaid from their general funds increased by 16% in fiscal year 2011 and 22.5% in fiscal year 2012.

Medicare spending growth has outpaced overall health spending

  • Growth rates for Medicaid have exceeded the rest of national health expenditure since 1999, when multiple States expanded eligibility, continuing through 2001.
  • By 2021, Medicaid will expand to 20% of National Health Expenditure and will have increased more than 5–fold in 25 years.
  • In 2006 Medicare Part D was introduced and low income and disabled patients who were eligible for Medicare were shifted to the Medicare Part D program.
  • The Affordable Care Act is expected to drive a 6% increase in Medicaid enrollment, beginning January 1, 2014.
  • Low income individuals up to 138% of the federal poverty level will become eligible for the program in States which choose to adopt the expansion. The Supreme Court’s ruling has allowed States to opt out of this expansion.

 

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Note: All third party trademarks contained herein are the property of their respective owners and their use herein is for informational purposes and does not imply sponsorship or endorsement of their products or services.

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