Financing Medicaid by Federal Government
User Rating: 0 / 5
- Details
- Hits: 17108
Financing Medicaid
The Medicaid has a dual financing by the Federal government and the states. The Federal government matches the state’s spending at a matching rate referred to as Federal Medical Assistance Percentage (FMAP). This rate varies across states based on a states per capita income (Kaiser, 2013). It ranges from a minimum 50 percent and rises upwards to around 73.4 percent for the poorest state. The funding by the Federal government accounts for about 57 percent of the total funding overall (Kaiser, 2013). The changes by the Affordable Care Act brought the match rate for adults who are newly eligible due to expansion to 100 percent in the first three years and at least 90 percent thereafter.
The Role of the Federal and State Governments on the Operation and Design of Medicaid Programs
The Medicaid program was established in 1965 through Federal legislation. It was originally thought that the program was designed for those receiving cash welfare assistance. This program made it possible for low-income individuals and families that would not have access to job based health covers or those that could not afford insurance premiums to receive health cover.
The program was expanded by the congress and the states to address widening gaps in the private health insurance system. This enabled the poor in the society to have access to health cover with both the Federal government and the states playing a very crucial role. The Federal reform introduced Medicaid to cover the low-income people. This would enable them access proper medical care, which they would not have afforded in the other health cover arrangements. The states would have the option of implementing the Federal reforms.
The Affordable Care Act made other key investments and improvements meant to strengthen the program. These included medical expansion. However, the States at the Supreme Court challenged these. In this regard, the Supreme Court left the role of enforcing the Medicaid expansion in the hands of the states on 28th June, 2012. Therefore, each state decides whether to implement the Medicaid expansion (Kaiser, 2013). However, the law on constitutionality was upheld.
Both the state and the Federal government have a role in financing the program. The funding by the Federal government is based on a match rate (FMAP) which depends on a state’s per capita income with the poorest state receiving the highest Federal match rate.
The states administer Medicaid under guidelines from the Federal government. Each state has single agency that administers Medicaid under the oversight of medical centers. Participation by states is voluntary (Kaiser, 2013). However, Federal law specifies requirements that all state Medicaid must meet to receive Federal Medicaid funding. The states are, nonetheless, the ones that determine eligibility, benefits, provide payment, delivery systems and other aspects of their programs. States are left with the role of coming up with innovations in the program that respond to economic and demographic changes. This means that the operation and design in each state is unique to that particular state (Kaiser, 2013).
The impact of the Patient Protection and Affordable Care Act on the eligibility and coverage of Medicaid
The impact of Patient Protection and Affordable Care Act cannot be underestimated. The act expanded eligibility to people who would have otherwise been rejected before. Hence, individuals and families that earlier could not afford health care benefited because of the program.
Affordable Care Act expanded Medicaid to people less than 65 years of age with an income at or below 138 percent of the Federal Poverty Level. This meant that more people who were originally not insured could have access to health cover. The adults under 65 years of age represented about half of the insured (Kaiser, 2013). This shows how such an act could be effective in bringing many people on board who would have initially not be able to afford health insurance but yet be locked out of health care services because their incomes could not afford it.
The Affordable Health Care required states to simplify and streamline Medicaid eligibility and enrolment. This would have the effect of increasing the number of people enrolling for the program. These changes made it possible for individuals and families that could not afford health insurance premiums and those that could not access job based health insurance covers to access a health cover (Sommers, 2012).
The Patient Protection Act made sure that people could no longer be rejected for coverage based on their health status or condition. Therefore, people with serious conditions that were rejected in other covers found a place of refuge. It should be noted that most of these people with serious health conditions come from poor backgrounds and therefore could not afford private health covers (Garret & Holahan, 2009). This act also brought a change in the way income was counted by the states in order to determine eligibility. Income calculation changed to Modified Adjusted Gross Income (MAGI) (Kaiser, 2013).