Perspectives on the Medicaid Cost Problem

Transcription

1 Perspectives on the Medicaid Cost Problem John Holahan The Urban Institute October 12, 2005 THE URBAN INSTITUTE

2 Figure 1 Medicaid Expenditure Growth, U.S. and Wisconsin, (in billions) Four Year Growth Average Annual Growth U.S. $205.7 $ % 9.5% Wisconsin $3.4 $4.6 34% 7.6% 2

3 Figure 2 Increases in Medicaid spending per person on acute care services has been less than for those with private insurance Percentage increase between 2000 and % 6.9% 9.0% Medicaid Acute Care Spending Per Enrollee 1 1 Holahan and Ghosh (2004) 2 Strunk and Ginsburg (2004) 3 Kaiser/HRET Survey (2003) Health Care Spending Per Person with Private Coverage 2 Monthly Premiums For Employer- Sponsored Insurance 3 *Significantly different from zero at 5% level. 3

4 Figure 3 Medicaid enrollment growth has been a major reason for the growth in total Medicaid expenditures Percent increase in Medicaid enrollment U.S. Wisconsin 10.1% 9.6% 8.0% 6.6% 2.9% 1.4% Total Aged and Disabled Adults Children and Non-disabled Adults Total Aged and Disabled Adults Children and Non-disabled Adults SOURCE: Urban Institute estimates based on KCMU Medicaid enrollment data collected by Health Management Associates from 44 states inflated proportionally to national totals, *Significantly different from zero at 5% level. 4

5 Figure 4 Sources of Enrollment Growth Families and Children The Recession Rising Health Care Costs Aged and Disabled Increased participation in Medicaid, likely due to rising health care costs, e.g., prescription drugs Aging of the baby boomers affecting disability rates Medical technology Increased participation in home- and communitybased waiver programs 5

6 Figure 5 Changes in Health Insurance Coverage in Wisconsin, Percentage Point Changes Non-Elderly Children Adults * * 2.3* 3.4* * 2.8* Employer Sponsored Medicaid Change in Population -9.8* 116 Thousand -11.9* -22 Thousand -8.9* 138 Thousand Direct Purchase Uninsured Change in Uninsured 171 Thousand* 15 Thousand 156 Thousand* * Statistically significant change between 2000 and 2002 (p<.10) Medicaid also includes S-CHIP, other state programs. Source: Urban Institute 6

7 Figure 6 Medicaid families are poorer, less educated, and less likely to be married than low income people with private coverage 72% 48% Medicaid Privately Insured Poor 60% 21% 18% 29% Below Poverty Level Less Than a High School Education Currently Married Note: All differences are significant at the.05 level. This chart compares families with income below 200% of the Federal Poverty Level that were covered by Medicaid or private insurance between 1996 and

8 Figure 7 Adults and children on Medicaid are in worse health than low income people with private insurance Percent of reporting fair or poor health 37%* Medicaid Privately Insured 11%* 8%* 3%* Adults Children SOURCE: Hadley and Holahan (2003/2004). *Significantly different from zero at 5% level. 8

9 Figure 8 Medicaid adults are more apt to have physical and cognitive limitations than low income people with private coverage 26% Medicaid Privately Insured 21% 16% 9% 4% 4% 3% 3% Fair of Poor Mental Health Social or Cognitive Limitations Difficulty with Lifting, Walking or with Steps Work/Housework/ School Limitations Note: All differences are significant at the.05 level. This chart compares families with income below 200% of the Federal Poverty Level that were covered by Medicaid or private insurance between 1996 and

10 Figure 9 Medicaid costs are less than private insurance for adults and children Per capita expenditures (in 2001 dollars) Difference = $1,265* $4,410 $3,145 Medicaid Privately Insured Difference = $76* $719 $795 Adults Children SOURCE: Hadley and Holahan (2003/2004). *Significantly different from zero at 5% level. 10

11 Figure 10 Medicaid costs are much less than private insurance for adults and children in fair or poor health Per capita expenditures (in 2001 dollars) Difference = $5,170* $14,785 $9,615 Medicaid Privately Insured Difference = $675* $1,112 $1,787 Adults Children SOURCE: Hadley and Holahan (2003/2004). *Significantly different from zero at 5% level. 11

12 Figure 11 Adult Medicaid beneficiaries have lower expenditures on dental and other acute care services than do those with private insurance 2% 9% Dental/Other services 11% 11% 12% 0% 13% 18% Home Health Prescription drugs 23% 42% 23% 36% Outpatient/emergency room Office-based care Inpatient care Medicaid $1,752 Private Insurance $2,253 SOURCE: Hadley and Holahan (2003/2004). 12

13 Figure 12 Adults with public coverage have better access and use than the uninsured Percentage point difference under public coverage relative to being uninsured Usual source of care 24* -10* Unmet need for medical/surgical care -7* Unmet need for dental care -5* Unmet need for Rx Doctor or other health professional visit Dental visit 15* 25* Clinical breast exam PAP smear 20* 19* Women only Source: Adults--Unpublished tabulations by the authors using the 2002 National Survey of America's Families and the model in Coughlin et al. (2005); Children--Dubay and Kenney (2001). *Significantly different from zero at 5% level. 13

14 Figure 13 Children with public coverage have better access and use than the uninsured Percentage point difference under public coverage relative to being uninsured Usual source of care -7* -3* Unmet need for Rx Doctor or other health professional visit 9* Unmet need for medical/surgical care Unmet need for dental care 0 17* Dental visit 29* Well-child visit 26* Source: Adults--Unpublished tabulations by the authors using the 2002 National Survey of America's Families and the model in Coughlin et al. (2005); Children--Dubay and Kenney (2001). *Significantly different from zero at 5% level. 14

15 Figure 14 For adults, public coverage generally provides the same access and use as private insurance Percentage point difference under public coverage relative to private insurance Usual source of care -1 Unmet need for medical/surgical care 0 Unmet need for dental care 4* -11* Unmet need for Rx Doctor or other health professional visit 0 1 Dental visit Clinical breast exam -3 PAP smear Source: Adults--Unpublished tabulations by the authors using the 2002 National Survey of America's Families and the model in Coughlin et al. (2005); Children--Dubay and Kenney (2001). *Significantly different from zero at 5% level. 15

16 Figure 15 For children, public coverage generally provides the same or better access and use as private insurance Percentage point difference under public coverage relative to private insurance 1 Usual source of care 5 Unmet need for medical/surgical care 1 Unmet need for dental care 2* Unmet need for Rx 6* Doctor or other health professional fisit 9* Well-child visit 10* Dental visit Source: Adults--Unpublished tabulations by the authors using the 2002 National Survey of America's Families and the model in Coughlin et al. (2005); Children--Dubay and Kenney (2001). *Significantly different from zero at 5% level. 16

17 Figure 16 Cost Containment Cutting Medicaid is possible but difficult Most reasonable options have been exploited Cuts in optional acute care benefits for adults would not yield large savings Cuts in eligibility would increase the uninsured, affect beneficiary health and the revenues of safety net providers 17

18 Figure 17 Cost Containment: Drug Pricing Prescription drugs are a major source of cost growth Pricing is a major issue and reform is badly needed; generally not controversial Design issues reforms should affect manufacturers prices, but not disrupt access to pharmacies 18

19 Figure 18 Cost Containment: Asset Transfers Good policy target, but no real savings Nursing home residents on Medicaid have very limited assets Incidence of transferring large amount of assets is small Administration and CBO estimate budget savings to be low 19

20 Figure 19 Cost Containment: Cost Sharing Theory reduce inappropriate use of services; research evidence reduces inappropriate and appropriate use Cost sharing is generally targeted at those above the federal poverty line, but most Medicaid beneficiaries are below poverty Caps on cost sharing obligations help but medical spending is skewed so the burden still falls on sickest beneficiaries If well designed, savings are not great; if not well designed, can be very punitive Collection is a major issue for providers 20

21 Figure 20 Options with greatest potential involve better management of high cost cases 4% Enrollees 4% Expenditures 39% 42% 49% 16% 30% Expenditures Per Person $25,000 $10,000-$25,000 $1,000-$10,000 $0-$1,000 $0 11% 5% Total = 44.1 million Total = $162.2 million SOURCE: John Holahan and Arunabh Ghosh analysis of 2000 Medicaid Statistical Information System (MSIS) data,