AgSplainer on the Basics of Medicaid
May 30, 2017
Last week I talked about my local nursing home and how important Medicaid is to its existence. In order to help rural Americans understand how Medicaid and possible changes to it could affect them, this is part one of an AgSplainer on Medicaid.
This week we'll focus on the big picture. Medicaid is one of the big four expenses for the federal government - depending on how you slice the categories. It works by empowering states to run their own programs after meeting minimum standards.
For every dollar a state spends on Medicaid enrollees, the US government reimburses a minimum of one dollar, but for poorer states it could be higher. In the end the federal government pays 63% of Medicaid expenses. This money is spent providing health care to children, low income adults, the disabled, and elderly.
One important note is the cost sharing is reimbursed to states, not recipients or providers. I was surprised that even some providers thought the money came just from the state, because they never see a federal check. There is a divergence between the number of people helped and how much is spent.
Some recipients have higher needs, most notably the disabled and the elderly. So while the elderly number only 8% of enrollment, they receive 14% of the expenditures. This is even more pronounced for the disabled.
Long term care expenses totaled 118 billion dollars last fiscal year (this is the total for both states and federal). Of that 37% or $44 billion went to nursing homes. The largest portion of long-term expense is for home health services, and the balance for mental health facilities.
To sum up, Medicaid is the largest health insurer in the US, with 97 million recipients, almost 3 in 10 Americans. Ninety percent of the $553 billion Medicaid dollars went to children, the elderly, the disabled, or households with at least one working member.
With this background in the basics, next week we'll detail how Medicaid works and what its future could look like.