Because of its size and cost, Medicaid has been called the “workhorse” of the U.S. health system. Now it’s front and center in the debate on overhauling the U.S health system and expanding coverage to the uninsured. With 60 million enrollees, Medicaid dwarfs other insurance programs, including its cousin, Medicare, which covers 44 million elderly and disabled people.
Test your knowledge of Medicaid:
1. Medicaid is a national program of the federal government.
Partly true. Medicaid is a joint federal-state program, with the federal government picking up about 57 percent of the overall Medicaid tab. But the federal contribution varies by state, ranging from 50 percent to 73 percent, with poorer states getting a bigger matching rate.
Medicaid isn’t a one-size-fits-all program; after meeting certain federal requirements, each state has the flexibility to shape coverage and benefits. As a result, the Medicaid program in Pennsylvania bears little resemblance to the one in Louisiana. For example, non-working parents in Pennsylvania qualify for Medicaid if their incomes are below twice the federal poverty level ($44,100 for a family of four). But in Louisiana, non-working parents qualify only if their incomes are below 11 percent of the poverty level ($2,426 for a family of four). States frequently experiment with new concepts in benefit design, eligibility and delivery systems.
2. If you’re poor enough, Medicaid will cover your health care needs.
False. Medicaid covers about 45 percent of poor Americans, defined as those with incomes below the federal poverty level (about $22,000 for a family of four). To be eligible for coverage, individuals must fall below certain income thresholds, which vary by state, and belong to certain categories, such as having dependent children, or being pregnant or disabled. In 20 states, a parent in a family of four who gets paid the federal minimum wage makes too much to qualify. Only 18 states cover adults without dependent children.
3. Medicaid provides bare-bones coverage compared to what’s available in the private sector.
False. “At least on paper, Medicaid has a longer list of benefits than many private plans,” said John Holahan, director of the health policy center at the Urban Institute, a Washington think tank. Medicaid benefits include mental health services, transportation-to-health services, and comprehensive screenings and treatment for children. In addition, Medicaid enrollees have much lower out-of-pocket costs than people with private coverage. There are typically no monthly premiums and no, or very low, copayments.
4. Medicaid patients get better treatment than patients covered by private insurance.
Not necessarily. In many states, specialists and dentists don’t see Medicaid patients. “It is far from a given to get referrals to specialists,” said Dan Hawkins, policy director for the National Association of Community Health Centers. Providers typically blame low reimbursement rates as the main reason for not accepting Medicaid patients. In Kentucky, Medicaid pays doctors $210 for a colonoscopy; Medicare pays $333. Private insurers usually pay more. In Pennsylvania, Medicaid pays doctors $300 for an appendectomy, while Medicare pays $575. “It’s a sad fact that Medicaid payments don’t come close to covering the cost of caring for the vulnerable patient population that relies on it for coverage,” said Dr. Joseph Heyman, chairman of the American Medical Association Board of Trustees.
5. Most Medicaid enrollees are children and their parents.
True. About 76 percent of all enrollees are children and their parents. And 65 percent of people on Medicaid come from working families.
6. Most Medicaid spending pays for services for children and their parents.
False. About three quarters of Medicaid spending is for the elderly and disabled, even though the two groups make up only about one quarter of the program’s enrollees. Medicare provides little coverage for long-term care, so many elderly, after depleting their savings, rely on Medicaid to pay their costly nursing home bills.
7. Medicaid is more efficient than private insurance.
True. Administrative costs of Medicaid are less than 7 percent, or half the rate that’s typically seen in the private sector. Medicaid holds down costs in part by paying providers lower fees and doing little marketing.