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Medicaid and the States

Updated: June 2006

AT A GLANCE: Medicaid is the state-federal partnership health program that serves about 40 million people in all 50 states and the U.S. territories. The program is complex in structure, and varies from state to state. For many locales it is the single largest health program in place. According to the Congressional Budget Office, as of August 2002, "Medicaid spending is expected to rise by $18 billion, or 14 percent this year. That rapid increase may be attributable to rising costs for prescription drugs and greater enrollment in Medicaid because of the sluggish economy, the expansion of eligibility requirements in some states, and increased outreach efforts by states to recruit participants." ¹

NEW & RECENT: MEDICAID REFORMS - The Deficit Reduction Act of 2005.    P.L. 109-171, signed into law on February 8, 2006, enacted several Medicaid reforms, including additional state flexibility and a new direction in the country's approach to funding for long-term care.  The reforms seek efficiencies to help control Medicaid spending.  NCSL's Federal Health Issues page provides comprehensive information. (03/03/2006) NEW! Effective July 1: CMS Guidance Regarding Citizenship Documentation Requirements  As a result of the DRA, Medicaid beneficiaries must now meet new requirements for proof of citizenship.  CMS recently released the guidance on these new procedures, effective July 1, 2006.  NCSL's comprehensive information here.  STATE MEDICAID REFORM: States are forging ahead with plans and proposals to change Medicaid.  Archive Now Available!: To this September 20 webcast that discussed the importance of Medicaid to persons with Alzheimer's, including functional eligibility requirements and more.

NCSL On-line Reports on Medicaid:

• HIFA waivers

• Long-Term Care

• Medicaid Prescription Drug Laws & Strategies, 2001-2005  -updated 2005

  • Pharmacy Plus waivers - NCSL report on state programs that are eligible for federal Medicaid funds, updated 2005
  • "Pharmacy Plus: The Perfect Cure?" State Legislatures magazine article, 2/03 [members- password required]

• Ticket to Work

• Redesigning Medicaid: New Attempts at Reform - Presentations from Fall Forum, Dec. 2004

• NCSL Health Conference features Medicare Rx law updates (December 8, 2004) - Slides Available

• "Medicaid: A Snapshot for State Legislators" - An NCSL  "101 introduction" - 28 pages - October 2004 [member password or login required]

• NCSL Resolution Adopted by the Task Force on Medicaid from the Fall Forum of the NCSL Standing Committees, December 10 2004, Savannah, Georgia. Includes comments on dual-eligibles and the "clawback" payments within the Medicare Modernization Act.

• "Medicaid: 10 Fixes that Work" - NCSL State Legislatures cover story, 2004 ~ [MEMBERS ONLY]  Other users may purchase this calling our marketing department at (303) 364-7812, or e-mailing  books@ncsl.org. 
  
• Medicaid Benefits: 50 State Survey  Medicaid Benefits: Services Covered, Limits, Copayments and Reimbursement Methodologies for 50 States, District of Columbia and the Territories -by NCSL Health Care Program, October, 2003.
• "Medicaid and Budgets: From Impasse to Impact" (12/09/03) video and transcript of session from the NCSL Health Chairs Meeting, webcast by KaiserNetwork.
  Speakers included: Victoria Wachino, Kaiser Commission on Medicaid and the Uninsured; Jane Woods, superintendent of Health and Human Resources, Virginia; Chuck Milligan, The Lewin Group; Donna Folkemer, NCSL; Sen. Jim Jensen, Nebraska; and Kala Ladenheim, NCSL.
• Disease Management: a strategy for addressing health care outcomes and costs. This web-assisted audioconference that took place on Wednesday, July 30, 2003 has now been archived. This event featured Dr. Autumn Dawn Galbreath from the University of Texas Disease Management Center, Alicia Crowder from Mississippi Disease Management, and Heidi Fox and Melanie Brown-Woofter from Florida's Disease Management Program.
• Medicaid Cost Containment: A Legislator's Tool Kit - managing costs (28 pages) - online edition 4/02.
  
• "The Toughest Challenge: Restraining Medicaid Costs While Preserving Coverage" Webcast online: Watch, hear and/or read the presentations from all the speakers at NCSL's Medicaid session in New Orleans, November, 2002.
  
• Slides from Annual Meeting Session on Medicaid If you missed NCSL's July 2002 annual meeting session on Medicaid opportunities and challenges, you can now see the speaker's slides.
  
• Health Insurance Flexibility and Accountability (HIFA) Demonstration Initiative - NCSL report on Medicaid and SCHIP, January 2002.
  
• States and Flexibility with Medicaid Waivers - This report provides information on the Health Insurance Flexibility and Accountability 1115 Waiver Initiative.
  
• State Fiscal Conditions, 2003: State finances are worsening, according to a comprehensive 50-state survey updated regularly by NCSL. In at least 23 states, Medicaid is cited as over budget for FY2002 while five more states have concerns about the coming months. [29 pages]
  • Medicaid: Connecticut Between a Rock and a Hard Place (part of NCSL's Medicaid Matters session, November 2001)
• 
   Medicaid Survival Kit: NCSL is the author and publisher of the Medicaid Survival Kit, a 250-page manual for state legislators and policymakers. Originally published in 1996, with periodic updates through 2003, it provides comprehensive information on:
  [full text is available to NCSL members with password]

• Children's Health Insurance Program (SCHIP or CHIP) Overview menu page, with numerous NCSL links
• Olmstead Decision website - 2002, updated regularly
• Ticket to Work and the Medicaid Buy-In website - updated regularly
• Disproportionate Share (DSH), Federal Proposals on Medicaid - AFI chart - 3/00
• State legislatures express support for delay in Medicaid Changes. NCSL news release of August 24, 2001.
• Provider taxes, HHS actions - 9/99 AFI alert
• Deinstitutionalization of Persons with Developmental Disabilities: A Technical Assistance Report for Legislators

• Florida: Changes to Medicaid Preferred Drug List Requirements and Competitive Bidding Pharmacy Contracts Could Save an Additional $86.6 Million in 2003-04, Legislative audit report, April 2003
• South Carolina: Options for Medicaid Cost Containment - SC Legislative Audit Council, January 2003
• TennCare Prescription Drug Costs - Comptroller, Office of Research, December 2002
• Vermont: Medicaid Program Costs Vermont Joint Fiscal Office, December 2002 [5 pages]
  • Vermont: Evaluation of Savings Attributable to Medicaid Pharmaceutical Cost Containment - Vermont Joint Fiscal Office, Feb. 2003 [5 pages]
• Summary of Premium Assistance Programs, NCSL Chart, June 2003

2006 HHS Poverty Guidelines

Persons in Family or Household	48 Contiguous States and D.C.	Alaska	Hawaii
1	$ 9,800	$12,250	$11,270
2	13,200	16,500	15,180
3	16,600	20,750	19,090
4	20,000	25,000	23,000
5	23,400	29,250	26,910
6	26,800	33,500	30,820
7	30,200	37,750	34,730
8	33,600	42,000	38,640
For each additional person, add	3,400	4,250	3,910

SOURCE:  Federal Register, Vol. 71, No. 15, January 24, 2006, pp. 3848-3849

These web pages provide more extensive details about the federal and state aspects of Medicaid:

• Centers for Medicare and Medicaid Services (CMS) - the federal agency that administers Medicaid.
• • Medicaid Data: Introduction || Spending by states - by CMS
  • Medicaid Prescription Reimbursement Information by State - 50-state chart of dispensing fees, copayments and ingredient costs, from CMS, September 30, 2003.
  • Pharmaceutical Manufacturers & labelers having signed Medicaid Drug Rebate Agreements on file with the Centers for Medicare and Medicaid Services (CMS). Provided by IL Medicaid office, December 30, 2003
  • "Bush Administration Will Propose Innovative Improvements" in Medicaid - including new funding, flexibility and limitations. Announced by HHS January 31, 2003
  • Federal Matching Funds (FMAP) for FY 2004 (through September 30, 2004)

• MEDICAID FISCAL RELIEF TO STATES - President Bush signed the Jobs and Growth Tax Relief Reconciliation Act of 2003 (TRRA) on May 28, 2003. The act provides a temporary increase in the FMAP (federal medical assistance percentage) for states. An explanatory letter to state Medicaid directors from the Centers for Medicare and Medicaid Services may be found at: http://cms.hhs.gov/states/letters/smd61303.pdf. Click here for additional information about TRRA.
• 2000-2001 State Health Care Expenditure Report, Co-published by the Milbank Memorial Fund, the National Association of State Budget Officers, and the Reforming States Group. In FY2001, states spent $290.7 billion on health care, approximately 30 percent of state budget totals. This report identifies and summarizes the amount of state-funded health care expenditures in each of the following broad categories: Medicaid, SCHIP, state employees' health benefits, corrections, higher education, insurance and access expansion, direct public health care, state facility-based services, community-based services, and population health expenditures.
• State Medicaid Programs and Agencies - directory with links to state programs from Alabama to Wyoming, updated for 2003.
• Prior Authorization for Medicaid Prescription Drugs in Five States: Lessons for Policy Makers - Report by Kaiser Commission on Medicaid and the Uninsured, April 2003 [61 pages].
• "State Budget Deficits: The Effect on Medicaid"- 9/19/2002 webcast and transcripts, from the Alliance for Health Reform and the Kaiser Commission on Medicaid and the Uninsured, Washington, DC.
• The New Medicaid and CHIP Waiver Initiatives - Kaiser Commission brief (#4028) describes past waiver activity, the principles of the new HIFA initiative, and the policy issues to consider in thinking about new waiver proposals, February 2002.
• Health Plan Collaboration Improves Quality of Services for Medicaid Enrollees - by Center for Health Care Strategies, Jan. 23, 2002
• Medicaid: Purchasing Prescription Drugs - Kaiser Commission on Medicaid and the Uninsured reports outline how state Medicaid programs purchase drugs and summarize state responses on eligibility, payment policies, benefit limitations, and cost control measures. January 2002
  2) "States Strive to Limit Medicaid Expenditures for Prescribed Drugs" - a report on trends on prescription drug spending, summarizing states' options in designing their benefit, and reviewing ways states are curbing the rate of growth of their Medicaid drug budgets, February 2002. (19 pages)
  3) "Florida's Medicaid Prescription Drug Benefit: A Case Study" - summarizes the state's attempt to reform its
  Medicaid prescription drug benefit program, including the development of preferred drug lists (those not needing prior authorization) in exchange for supplemental drug rebates or guaranteed savings from alternative programs like disease management. February 2002. (44 pages)
  4) Medicaid Outpatient Prescription Drug Benefits: Findings from a National Survey
  5) Outpatient Prescription Drug Benefits Under Medicaid: Detailed Case Studies
• Disease Management: Findings from Leading State Programs - AcademyHealth, December 2002
• A Closer Look at Medicaid Managed Care - Managed care has become an important part of the delivery of Medicaid services over the past decade. Over half of Medicaid beneficiaries are enrolled in managed care plans, and most states have some mandatory managed care enrollment. The Kaiser Family Foundation has published four new publications.

 Footnote:

1. - CBO's The Budget and Economic Outlook: An Update, August 2002