Medicaid is key part of reform discussions and it is not one program

NPR has a story today on the continued discussion of Medicaid, that focused on some of Gov. Romney’s statements about wanting to block grant the program to states as a way to expand health insurance coverage, presumably as part of a “replace” plan for the ACA.

Most of this debate misses a fundamental point about the program–it is not really one program at all in terms of the patients it covers and their needs, but 3.

Program 1: covers mainly pregnant women and children for acute services. There are around 45 Million such persons. The ACA would expand this portion of the the program greatly. This is the group that experienced barriers to access in the recent study, and this is where most of the debate is centered. Such beneficiaries are numerous, but are relatively inexpensive on a per capita basis.

Program 2: covers long term care, most notably nursing home care for Medicare beneficiaries who are also poor and therefore covered by Medicaid. Such persons are know as Dual Eligibles, because they are covered by both Medicare and Medicaid). There are 9 Million duals, around two-thirds of them are eligible for Medicare because of age, the remainder due to permanent disability. This relatively small number of persons are extremely costly to both Medicare and Medicaid.

Program 3: covers long term care and acute specialized services for persons younger than 65 who are disabled, but not eligible for Medicare; There are 5.9 Million such persons, who are more difficult to describe because of their variety of needs.

As I said back in June

If you block grant Medicaid and grow the block granted amount slower than health care inflation, it will be very hard (impossible) to provide similar services to the existing beneficiaries. With block granting, you either can’t expand coverage or you have to cut benefits and services, and most of the cuts will have to fall on the elderly and disabled. Most folks forget that Medicaid is at least 3 programs.

Block granting Medicaid is not a strategy to expand insurance coverage, unless it is combined with a plan to severely reduce long term care spending paid for by Medicaid for the elderly and disabled, or you are planning to spend more money via a block granted approach than is currently projected for Medicaid.

I have called for federalizing the long term care and disabled portions of Medicaid, with a goal of moving low income beneficiaries into private insurance purchased in health exchanges. My book elaborates at length on both the political and policy reasons for such a move.