Financial Impact of Medicaid Essay

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Medicaid Budget Analysis

The author of this report has been charged with doing a budgetary analysis of the federal program that is known is Medicaid. While its counterpart Medicare focuses on helping those that have reached retirement age, Medicaid is geared more towards those people of any age that are encountering poverty and/or that have encountered a recent disaster like a hurricane or an earthquake. This report will answer several questions about Medicaid including the general budgetary policies that Medicaid follows, the legislative committee(s) that are assigned to the task, how the budgetary changes affect the community, whether a deficit/cut situation is better or whether surplus/additional funding should be done instead, the political climate in the home state of the author of this report, how the people in that home state drive the agenda and how this all differs from developing legislation overall. At least five references will be cited along the way. While Medicaid is a great program that does great things, there are political spats and funding shortages that make administration of the program a challenge.

Analysis

On the whole, Medicaid has five major functions. These functions include health insurance coverage for about thirty-one million children and about sixteen million adults from low-income families. About sixteen million people of elderly age or of disability are assisted as well. The second part is that Medicare beneficiaries receive money from the Medicaid funding, about 9.4 million people to be exact. This is about twenty percent of all Medicare beneficiaries. The third prong of Medicaid is the long-term care assistance for 1.6 million institutional residents and about 2.8 million community-based residents. The fourth prong is the support and health care system safety-net dollars. This is about sixteen percent of national health spending and about forty percent of long-term care spending. Lastly, the fifth prong is state capacity for health coverage. For FY 2013, the FMAP's range from fifty to nearly seventy-five percent. When it comes to health coverage, employer-sponsored healthcare makes up about half of all people covered but Medicaid is about sixteen percent. Medicare makes up another thirteen percent. When it comes to healthcare spending, Medicaid and Medicare make up a combined forty percent, which is more than private health insurance (thirty-five percent). One detail about Medicaid is that the states are not always on the same page as far as who is made eligible and who is not. In many states, less than half of people below the federal poverty level get coverage. There are many others that are between one half and one hundred percent. All of the others cover all people below the federal poverty level. As of 2013, the numbers of states in each group were sixteen, seventeen and eighteen, respectively. The home state of the author of this report, that being Iowa, was in the fifty to ninety-nine percent group (Kaiser, 2015).

The overall budget process for Medicaid is that both the federal and state governments provide funding. For every dollar that the state spends, the federal government is to match it at a 1:1 ratio. In many cases, counties will chip in their own dollars as well. Given that the states do have at least some discretion to deliver their own desired level of care, that is why there are a lot of disparities from state to state. In fact, the recent passage of the Patient Protection and Affordable Care Act (aka ObamaCare) has created a lot of perceived or actual problems and has led to lawsuits (Ballopedia, 2015). Medicaid (not to mention Medicare) are overseen by the Centers for Medicare and Medicaid Services (CMS). That group is a part of the larger Department of Health and Human Services, or HHS. The leader of HHS is a cabinet-level position that reports to the President. The person who runs the CMS, a woman by the name of Marilyn Tavenner, stepped down in January 2015. The actual congressional committee in the Senate that oversees Medicare and Medicaid is the Senate Finance Committee. At present, that committee is chaired by Orrin Hatch from Utah. A House of Representatives committee that has been involved with Medicaid is the House Appropriations-Human Services Committee. While not a Congressional or regulatory agency, there is also the opinions of what is known as the Congressional Budget Office, or CBO. They offer projections about the spending levels and deficit impact that a law has and the Patient Protection and Affordable Care Act was no exception. Even those projections were testy because the first ten years of the law measured were from 2012 to 2021 and a net surplus was projected.

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However, this was quickly assailed because the law does not fully go into effect until 2010. As such, the 2022-2031 projections would be a better window to look at since the law would be fully active at that point (Levey, 2015).

As for how budgetary changes affect the community, this is not hard to figure out or see. As explained from the Kaiser data referenced earlier, there is a rather wide disparity when it comes to how much of the people below the federal poverty level are covered. Some states see to it that everyone under the federal poverty level are covered. Some are between a half and all of the federal poverty level people while others are below half. This can obviously have a dramatic effect on the poor people in each state and the level of healthcare that they are able to receive. However, the federal poverty level is not an exact science. To be sure, cost of living can actually vary a lot from place to place. For example, one hundred thousand dollars can buy a fairly nice house in many parts of Iowa. However, in states like New York and California, it is not even a starting point or would only buy homes in areas that most people would dare not live. Also important to factor in is that many kids have become "boomerang children" and live with their parents despite being well into their twenties or even thirties. They are often employed but do not have the financial obligations that a normal adult would have and the federal poverty measurements mostly look at adults living on their own and/or adults with children in more "traditional" living arrangements. Even so, even with the measurements being off, trying to over-correct for these metrics being a little screwy leads to people that truly need help getting shafted when it comes to receiving benefits (Wisconsin, 2015).

The inherent problem is that the federal poverty line being inaccurate leads to either too many people being helped or too little and it is quite hard to find a middle ground. The end result is that either too many taxpayer dollars are spent or too little. Rather than simply shooting for too little funding and deficits or too much funding and a surplus, the author of this report would rather focus on getting benefits to those that deserve and need them and ONLY to those people. This would require changing the yardstick used to measure who should get the benefits and those that do not. For example, if an adult is only making $10,000 a year, they would normally receive benefits but this should typically be at least somewhat different if the child is living with their parents and is not paying rent to those parents. After all, their annual expenses are much lower than the normal adults out there who have to bear all the expenses of living. Gay marriage becoming legalized earlier this year (2015) and the increased ability for LGBT people to adopt and otherwise realize the benefits that heterosexual couples have had for years has led another paradigm shift that the federal statistics and measurements will have to take into account to keep the poverty level measurements accurate. At the same time, there are many people that really should be receiving help but do not because they exist in a narrow sliver of statistical anomalies that say they are not eligible when they really should be (Wisconsin, 2015).

As for the political climate of the author's home state, it was mentioned earlier that the author of this report is in Iowa. Even with the state of Iowa being in the middle of the road when it comes to the percentage of people under the federal poverty line being served, the governor of the state of Iowa is extremely conservative. The man's name is Terry Branstad and he has been in office since 2011. He is sixty-eight years old. He was actually governor of Iowa from 1983 to 1999 and then came back, as mentioned above, in 2011. While governors do not write law on their own, they can certainly veto the laws that come across their desk. Unless the support for a bill is overwhelming, this means that the governor can block anything that they do not find to their liking. It does not help Iowa all that much is that….....

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