Medical Assistance Programs (Medicaid) Issues - Essay Example

Medical Assistance Programs/ Medicaid Introduction Medicaid is the s fundamental health insurance program for the low earners as well as the high-need vast majority of Americans (Centers for Medicare & Medicaid Services 44313). It is the largest and the most significant financing for the safety-net providers and is a dominant financer for most of the long-term care. Every state administers the Medicaid program in the context of the broader federal rules and shows a high degree of flexibility in manipulating the Medicaid programs in the respect to the requirement of the state. Medicaid programs cover an estimated amount of 62 million low-income Americans who are unable to get other forms of health insurance. However, not all the low-income earners get the Medicaid coverage. The majority of low-income adults not enrolled in the program are those without dependent children are. Medicaid offers a broad spectrum of services at very limited cost-sharing (Garfield 2). Moreover, Medicaid provides the largest and most reliable sources of financing to the safety net providers. The safety net providers include community health centers as well as the public hospitals that mainly serve the penniless and low-income earners. It is estimated that the program provides medical financing to about 9 million geriatrics and the disabled in the society who cannot afford the long-term medical care. States Administration of Medicaid Participation in the Medicaid program is not mandatory for all the states. However, those that opt to participate must meet the requirements of the federal government relating closely to the nature of coverage. Despite the presence of a high degree of flexibility, those states must meet the minimum standards set by the federal government. The estates receive government matching funds to finance the extra coverage in the program .They exercise a high degree of flexibility in relevance to the provision of the coverage in the Medicaid program. Usually, this flexibility is the key determinant of the service delivery as well as the amount paid to the providers in each of the state utilizing the program. There has been rigidity in setting the eligibility level of the participants. However, the federal government has set the minimum level to cover children and expectant women in the recent past (Broaddus 9). The Medicaid program financing comes from both the federal and state governments. The federal government, however, provides the largest share of about 57 percent with the rest from the state government. Medicaid program is, therefore, a significant budget item and provides a notable source of revenue to the federal government The cost of Medicaid Medicaid is a significant expenditure in the health system of the United States accounting for more than one-sixth of the overall spending on healthcare. Statistically, it claims 19 percent of the total hospital spending and approximately 32 percent of the total nursing home expenditure in the United States. In the 2010 financial year, a total of 389 billion US dollars was spent in the program with over 60 percent committed to the purchase of medications, hospitals, staff salaries and acute care services (Garfield 2). Only a small fraction covers nursing homes and long-term health care services Children and parents contribute the majority of individuals enrolled in the Medicaid program with 75 percent while the elderly and the disabled contributing a mere 25 percent. Ironically, the geriatrics and the disabled take the greater portion of the expenditure. For instance, in 2009, the medical expenditure per childs head was at $2,313, and that for parents was $2,926. On the other hand, the average elderly expenditure per head was $13,186 and the disabled cost $15,453 per head. In this case, the Medicare cost for the elderly and the disabled was more than seven times that of the parents and children. This variation is due to more acute health care services required by the older persons and the disabled compared to the children and parents. The elderly and the disabled are more often subjected to long term care that also requires higher expenditure (Markus 273). The dominant factor driving the Medicaid program is the rate and the number of enrollments. The program cushions highly escalated inflation rates in the cost of health care service by employing the high number of registration as a principle driver. The strategy works perfectly well especially in the economic depression, in the presence of high cases of unemployment and subsequent fall in the income rate. Under such circumstances, the number of low-income earners increases with a subsequent rise in enrollment. For instance, between 2007 and 2010, the sum expenditure of Medicaid went up by approximately 24 percent with a subsequent enrollment rate of 19 percent (Ku et al. 493). The expenditure per head, however, had only a slight increase of 4 percent. A table showing sources of funding of uncompensated care spending in billion US dollars (2008) Source Dollars % Medicare 7.2 12.5 Medicaid 10.9 19 State & Local 10.6 18.5 Direct care programs 14.6 24.4 Physicians 7.8 13.6 Private 6.3 11 Total 57.40 100 Reasons for the recent increase in Medicaid spending The spending on Medicaid program has been on the rise since 2002 evident in all the services provided by the program. For example, there was 11.2 percent increase in the spending for the acute care and 3.8 percent for the long term care especially for the elderly and disabled. Throughout the entire duration, the acute care services escalated by 13.4 percent. This increase is due to several factors. First, the high rates of spending in the acute care relative to the long-term care is a consequence of a rise in children enrollment in the Medicaid program compared to the initial years. There is also an increase the enrollment of the non-disabled adults in the program. As a result, the demand for the acute health services has remarkably increased relative to the long term expenditure. Both the federal government and the state government have both in creased the allocation in their yearly budgets to increase the financial capability of the program to provide quality healthcare (Markus 273). The increase and rapid growth in the prescription drugs are also contributing factors to the rise in spending on the Medicaid. In 2003, the Medicaid drug expenditure increased from $16.6 billion to $26.6 billion. Thus, an increase of more than $10 billion US dollars was spent on drugs. Consequently, increase in spending on the drug resulted in the rise in the managed care plans from $26.5 billion to $41.5 billion between 2000 and 2003. Due to such expenditure on the prescription drugs, both the federal government and the state government increased the budget allocation to the Medicaid plan. The additional funds cushion the programs and services from collapse and also ensure the financial stability. The increase in the variety and cost of the prescription drugs in the recent times have contributed to the rise in spending. The increase in expenditure in the nursing homes is however attributed to the integration of Upper Payment Limit (UPL) programs. UPLs principal role is to transfer funds either from various local government or other providers to the accounts of the state government. In return, the states provide every high payment rates to such providers – nursing homes. The consequence of such increased rate payment by the state government to the providers is increased budget on the Medicaid programs as well as the services provided. The chart below shows different enrollment proportions to the Medicaid and expenditure. The funds contributed to Medicaid are committed to several services under the program. The increase in expenditure correlates with the rise in the finance requirements of these services (Ku et al. 493). Among the several ways the fund is utilized include; Nursing Care Facilities A relatively larger amount of the Medicaid money is used in the financing the nursing care facilities providing care to the aged and the disabled. As noted, this group of people takes a larger portion of the money as they require long term care that is relatively more expensive. Following the increased enrollment of such groups of beneficiaries, there is a need for more funds. Thus, resulting in increased budget allocated to the program by different states. Prescription Drugs The purchase of the prescription drug is one of the fundamental expenditure of Medicaid. From year 2000 to date, there has been a steady increase in the use of the prescription drugs. For instance, between 2000 and 2003, there was $10 billion increase in drug expenditure by Medicaid. As a consequence, there were higher financial needs of the health cover program. These drugs are used by all the categories of enrolled persons. Physician and Clinical Services Spending on the physician and the clinical services accounted for a relatively larger portion of the Medicaid dollars The substantial increase in such expenditures for the past few years has been due to enrollment of children and expectant mothers to the program. The growth in the physician and clinical services is primarily accelerated by the transient increase in the cost of payment given majorly to the primary healthcare providers (Broaddus 9). Other Professional services Some funds are spent on the professional services that are provided for under the healthcare program. For instance, the expenditure on the professional services like optometry and podiatry constitute a significant use of the Medicaid funds. Conclusion The current increase in the budget allocation to the Medicaid program is justified under the prevailing circumstances that the program is experiencing. Several factors attribute to the observable rise in the expenditure in Medicaid. Among the factors include increased use of prescription drugs and the rise in enrollment of children and expectant mothers. Funds allocated to the program are employed in the provision of professional services and financing nursing homes among other purposes. Works Cited Broaddus, Matt. "Childless Adults Who Become Eligible for Medicaid in 2014 Should Receive Standard Benefits Package." Washington, DC: Center on Budget and Policy Priorities (2010). Centers for Medicare & Medicaid Services (CMS), HHS."Medicare and Medicaid programs; electronic health record incentive program.Final rule."Federal register 75.144 (2010): 44313. Garfield, Rachel. "Enrollment-Driven Expenditure Growth: Medicaid Spending during the Economic Downturn, FFY2007-2010." (2012). Ku, Leighton, et al. "The states next challenge—securing primary care for expanded Medicaid populations." New England Journal of Medicine 364.6 (2011): 493-495. Markus, Anne Rossier, et al. "Medicaid covered births, 2008 through 2010, in the context of the implementation of health reform." Womens Health Issues 23.5 (2013): e273-e280. Read More