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How Medicaid Works A Chartbook for Understanding Virginia’s Medicaid Insurance and the Opportunity to Improve it The Commonwealth Institute Virginia Poverty Law Center December 1, 2017

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Page 1: How Medicaid Works - Commonwealth Institute...Health Insurance Matters The debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has

How Medicaid WorksA Chartbook for Understanding Virginia’s Medicaid Insurance

and the Opportunity to Improve it

The Commonwealth Institute

Virginia Poverty Law Center

December 1, 2017

Page 2: How Medicaid Works - Commonwealth Institute...Health Insurance Matters The debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has

SECTION I Understanding Virginia’s Medicaid Program Today 1

SECTION II Virginia’s Opportunity to Expand Medicaid 7

Cover photo: Catherine Scott

Page 3: How Medicaid Works - Commonwealth Institute...Health Insurance Matters The debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has

SECTION I

Understanding Virginia’s Medicaid Program Today

1

The Commonwealth Institute

Page 4: How Medicaid Works - Commonwealth Institute...Health Insurance Matters The debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has

• Medicaidisapublichealthinsuranceprogramforlow-incomepeople.Itwasstartedin1965.Medicaidinsurancecoversmostlychildren,pregnantwomen,parents,seniorsoverage65,andpeoplewithdisabilities.

• InVirginia,nearly1millionpeoplehavehealthcoveragethroughMedicaidatanytime.

• Medicaidisjointlyfundedthroughfederalandstatedollarsandadministeredbythestate.EverydollarVirginiaspendsinMedicaidismatchedbyadollarinfederalfunds.

• Sevenoutoftenoffice-baseddoctorsinVirginiaareacceptingnewMedicaidpatients.

SECTION I: Understanding Virginia’s Medicaid Program Today

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The Commonwealth Institute

Page 5: How Medicaid Works - Commonwealth Institute...Health Insurance Matters The debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has

• Medicaid’simportantroleandeffective-nessleadtobroadpublicsupportformaintainingit.

• Eighty-fourpercentofthepublicopposescutstoMedicaid.

SECTION I: Understanding Virginia’s Medicaid Program Today

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The Commonwealth Institute

Page 6: How Medicaid Works - Commonwealth Institute...Health Insurance Matters The debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has

Eligibilitylevelsdeterminewhocanreceivecoverage.Statesseteligibilitylevelsbasedonpersonalincomeandassets.Eligibilitylevelsforchildren,parents,andpregnantwomenincludea5percentincomedisregard.

VirginiahasveryrestrictiveMedicaideligibility:

• Pregnantwomenandchildrenthroughage18cannothaveincomehigherthan148percentoffederalpovertylevel(FPL)or$30,240forafamilyofthree.(Virginia’sFAMISprogramcoverschildrenandpregnantwomenupto205percentFPLor$41,880forafamilyofthree.)

• Elderlyanddisabledpeople(unlessonaspenddownorinlongtermcare)cannothaveincomehigherthan80percentFPLor$12,992foranelderlycouple.

• Workingparentsmusthaveincomebelow52percentFPLor$10,524forafamilyofthree.(Seenextpageforincomelevelsbygeographicregion.)

• ChildlessadultsarenoteligibleforMedicaidinVirginia.

SECTION I: Understanding Virginia’s Medicaid Program Today

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The Commonwealth Institute

Page 7: How Medicaid Works - Commonwealth Institute...Health Insurance Matters The debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has

• Forworkingparents,maintainingeligibilityisahighwireact.Becausethemaximumallowableincomeissolowandvariesbylocality,workingparentscanenduplosingtheireligibility—thoughnotimmediately—withjustalittleovertimeorevenapromotionthatcomeswithaslightlyhighersalary.Or,iftheyhavetomovetoanotherlocality,theymaysuddenlyfindtheyhavelosttheireligibility

SECTION I: Understanding Virginia’s Medicaid Program Today

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The Commonwealth Institute

Page 8: How Medicaid Works - Commonwealth Institute...Health Insurance Matters The debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has

• Becausehealthcarecostshavebeenrisingacrosstheeconomyformanyyears,Medicaidcostshavebeenrising,too.Whencomparedtothestatebudget,whichshrunkduringtherecession,itcanlooklikeMedicaidcostsarerisingrapidly.

• Farfrombroken,Medicaidisactuallyveryefficient.Medicaidhasloweradministrativecoststhanprivateinsurance,andtherateofgrowthhasbeenmuchslowerthanprivateinsurance.

SECTION I: Understanding Virginia’s Medicaid Program Today

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The Commonwealth Institute

Page 9: How Medicaid Works - Commonwealth Institute...Health Insurance Matters The debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has

SECTION II

Virginia’s Opportunity to Expand Medicaid

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The Commonwealth Institute

Page 10: How Medicaid Works - Commonwealth Institute...Health Insurance Matters The debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has

SECTION II: Virginia’s Opportunity to Expand Medicaid

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The Commonwealth Institute

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The Commonwealth Institute

Page 11: How Medicaid Works - Commonwealth Institute...Health Insurance Matters The debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has

Health Care for Low-Income Adults• Virginia lawmakers could close the coverage gap

by taking the option offered to states to increase Medicaid eligibility for most adults to 138 percent of the federal poverty level (FPL). This is equal to an annual income of $16,643 for an individual and $28,180 for parents in a family of three in 2017.

• This expanded eligibility would primarily help parents and other working adults who are not offered coverage through their jobs and cannot afford other coverage. As of October 2017, Washington D.C. and 31 states, including Kentucky, West Virginia, and Maryland have expanded, and the opportunity remains today. Virginia’s share of expansion cost is limited to 10 percent.

Health Care for Workers in Key Sectors• The majority of people who would be newly eligible

for coverage are working. And they are working in the most important sectors of our economy. Workers in five of the state’s largest employment sectors have the most to gain: Accommodation and Food Services; Retail Trade; Education, Health, and Social Services; Construction; and Professional and Business Services.

Health Care for Veterans• If Virginia expanded Medicaid and closed the

coverage gap, Virginia’s military veterans would also benefit. 12,600 military veterans in Virginia could get quality, affordable health care coverage. An estimated, 5,300 Virginia veterans are uninsured, while another 7,300 are underinsured.

Health Care for Communities of Color• 66 percent of the nonelderly population with

Medicaid coverage in Virginia are people of color. Over forty percent of the adults left uninsured because of Virginia’s refusal to expand Medicaid are also people of color.

SECTION II: Virginia’s Opportunity to Expand Medicaid

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The Commonwealth Institute

Page 12: How Medicaid Works - Commonwealth Institute...Health Insurance Matters The debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has

IfVirginiacontinuestorefusefederaldollarsforMedicaidexpansionin2019and2020, thestatewouldbe:

• Unabletosave$5.7millionpermonthinstategeneralfunddollarswhicharenowusedforstate-fundedhealthprograms;

• Losingoutonatotalnetstate-savingsof$138millioningeneralfundsduringfiscalyears2019and2020;

• Forfeiting$3.4billioninfederaldollarsbytheendofthebiennium.Thatmoneycanbeusedtohelphundredsofthousandsoflow-incomeVirginiansgetthehealthcaretheyneed;

• Foregoingsupportfor15,000jobsinhealthcareandVirginia’soveralleconomythatwouldgenerate$74millionperyearinnewstateandlocaltaxrevenues;and

• Ignoringthebestwaytodirectlyaddressmentalhealthneedsandtheopioidcrisisthroughdirectservicesandtreatmentsforuninsuredadults.

SECTION II: Virginia’s Opportunity to Expand Medicaid

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The Commonwealth Institute

Page 13: How Medicaid Works - Commonwealth Institute...Health Insurance Matters The debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has

Health Insurance MattersThe debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has ignored an equally important issue: the value of health insurance. Three recent studies show just what kind of value health care coverage delivers for individuals and communities.

CONTROLS COSTS

REDUCES DEATH RATE

IMPROVES FINANCIAL

HEALTH

48.3% 4.5%

235 1st year

fewer deaths in Virginia by 2018

decrease in average health care costs per year

reduction in potentially preventable deaths

Results compare people without health insurance who gained coverage through a VCU program for 1 year versus 3 years. Those insured for 3 years had fewer emergency room and more regular doctor visits.

Results compare people with gained coverage in Oregon versus those who didn’t.who are uninsured.

Results compare the reduction in mortality when people in Massachusetts gained coverage with similar localities in other states where people didn’t gain coverage.

80%less likely to have catastrophic medical expenses

50%less likely to borrow money or fail to pay other bills because of medical debt

3rd year

Sources: The New England Journal of Medicine, Health Affairs, Annals of Internal Medicine

$8,900

$4,600

Results compare people who gained coverage in Oregon versus those who remained uninsured.

SECTION II: Virginia’s Opportunity to Expand Medicaid

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The Commonwealth Institute

Page 14: How Medicaid Works - Commonwealth Institute...Health Insurance Matters The debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has

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The Commonwealth Institute

Page 15: How Medicaid Works - Commonwealth Institute...Health Insurance Matters The debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has

For more information, contact:

Kenneth GilliamPolicy AssociateThe Commonwealth Institute for Fiscal [email protected] x108

Jill A. HankenHealth AttorneyVirginia Poverty Law [email protected]

The Commonwealth Institute

The Commonwealth InstituteTheCommonwealthInstituteforFiscalAnalysisprovidescredible,independent,andaccessibleinformationandanalysesofstatepublicpolicieswithparticularattentiontotheimpactsonlow-andmoderate-incomepersons.Ourproductsinformstateeconomic,fiscal,andbudgetpolicydebatesandcontributetosounddecisionsthatimprovethewell-beingofindividuals,communitiesandVirginiaasawhole.

The Virginina Poverty Law CenterTheVirginiaPovertyLawCenterisanon-profitorganizationthatservesVirginia’slegalaidsystembyprovidingadvocacy,training,andlitigationsupportonciviljusticeissuesthataffectlow-incomeVirginians.

This work is licensed under the Creative Commons Attribution-NonCommercial-

NoDerivs 3.0 Unported License. To view a copy of this license, visit

http://creativecommons.org/licenses/by-nc-nd/3.0/ or send a letter to Creative

Commons, 444 Castro Street, Suite 900, Mountain View, California, 94041, USA.

13

The Commonwealth Institute

Page 16: How Medicaid Works - Commonwealth Institute...Health Insurance Matters The debate surrounding the expansion of Virginia’s Medicaid insurance program has focused on costs, but has

The Commonwealth Institute

Virginia Poverty Law Center


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