Transcript Medicaid: Still the Forgotten Issue in Health Reform

Robert B. Helms
Resident Scholar
American Enterprise Institute
AEI on the Hill
January 25, 2012
Unchecked entitlement growth
40
46.0%
of GDP
35
Net Interest
30
9.7%
% GDP
25
20
Medicaid & Exchanges
15
26.4%
of GDP
6.3%
5
AEI
10.4%
Medicare
10
0
2010
Total
Estimated
Cost in 2084
Social Security
2020
2030
2040
2050
2060
2070
2080
Source: CBO Long Term Budget Outlook, 2010
2
Medicaid – the second largest
entitlement program
• Medicaid Expenditures $383.5 B in FY 2010
– Federal $260.0 Billion
– States $123.5 Billion
• Projected to reach $840.4 B by 2019
• 91% of new Medicaid expenditures to be paid by Federal
government
• Medicaid covered about 62 million in FY 2009
• ACA projected to increase enrollment by 34% to 84.3
million by 2019 (CMS estimates are low compared to
others)
• CBO projects Federal outlays of $4.08 T 2012-21
AEI
Sources: CMS Form 64; Office of the Actuary; CBO
3
Medicaid State Matching Rates,
FY 2012
•
14 States with 50% FMAPs –
and their FMAP without the
50% minimum*:
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Connecticut
Massachusetts
New Jersey
Maryland
New York
Wyoming
Alaska
Virginia
New Hampshire
Washington
California
Colorado
Minnesota
Illinois
14.2%
26.5%
26.7%
33.5%
34.5%
40.6%
45.1%
45.2%
46.8%
48.2%
48.6%
48.8%
49.0%
49.7%
Source: Federal Register, 75-217, 69083
*Vic Miller calculations, FY 2013
•
10 States with highest FMAPs
Mississippi
74.2%
West Virginia
72.6%
Kentucky
71.2%
Utah
71.0%
Arkansas
70.7%
South Carolina
70.2%
Idaho
70.2%
District of Columbia 70.0%
(set by law, not by formula)
– New Mexico
69.4%
– Alabama
68.6%
– Arizona
67.3%
–
–
–
–
–
–
–
–
4
Nine States Get Half the Federal
Medicaid Money, Billions, 2010
35
30
25
$ Billions
20
15
10
5
0
NY*
CA*
TX
PA
FL
*States with ~50% matching rate
OH
IL*
MI
NC
AVG, 41
States &
DC
Total Federal Medicaid expenditures were $260 Billion in FY 2010
AEI
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Federal Medicaid Funds are Flowing to the
Richer States
Federal Medicaid Spending per Poor Person*, 2010
Five Richest States
Five Poorest States
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
CT
MD
MA
NJ
NY
SC
KY
WV
ID
MS
*States are ordered by per capita income. “Poor persons” are individuals below 125% of the Federal
Poverty Line.
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ACA Matching Rates for the
Newly Eligible
• In 2014, states required to provide
coverage for individuals with incomes up to
133% FPL
• Adds an estimated 16 to 21 million new
enrollees
• 2014 – 2016 FMAP = 100%
• 2017 = 95%
• 2018 = 94%
• 2019 = 93%
• 2020+ = 90% What will this cost?
AEI
7
Estimates of New Medicaid
Expenditures, 2014-2019
$700
$575
$600
$500
$434
$404
$400
$300
$200
$100
$43
$20
$17
$Urban
AEI
CBO
State Costs
Lewin Gp
Federal Costs
8
Additional Spending in the Five
Richest and Poorest States,
2014-2019
Additional
Federal Spending
($millions)
Additional State
Spending ($millions)
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
AEI
Five Richest States
Five Poorest States
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
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