Speaking of 1115 waivers, we’re seeing more state Medicaid initiatives that go beyond reimbursing care. For example, North Carolina used funds to pay off the medical debt for its residents.
Yeah, I always tell people, it’s not your not your granddad’s Medicaid program. Ultimately the funds have to be used for something health related, but there’s a better understanding that healthcare is attached to social needs. For example, states are also using funds for rent assistance, because that is a factor in ensuring access to care services.
Right now, we’re seeing a real big focus around non-traditional drivers of health, what people would refer to as ‘social determinants.’ Access to food and nutrition is exploding; access to transportation has been a key benefit all the while; and now Medicaid is being used for housing. Twenty years ago, nobody would even think Medicaid would have a role in supporting housing. Things have definitely shifted.
Will this have a broader impact on society? What I mean is, could Medicaid be a vehicle to improve what private insurers cover as far as social determinants?
Yes, I think expanding Medicaid sends a message and builds the framework to cover care the same for everyone. Whether you get your insurance from a state or federal exchange, or from work, or you’re on Medicaid, we want people to have the same access to care.
This benefits providers because it expands capacity, and for health plans it helps them to build better networks for group plans. It also increases participation in services, for providers and patients alike.
For example, mental health access is a challenge because there’s not a sufficient number of qualified providers. When people dig into why, it’s often reimbursement. But, if a health plan has a larger number of individuals to manage that have mental health needs, they will have to cover those services and reimburse providers at a fair rate as part of their contracts. States have a mechanism where Medicaid reimbursement rises to reflect increased care needs, and health plans have a similar incentive to meet the full needs of patients in order to control costs and produce the best outcomes.
As things stand currently, what patients benefit from state Medicaid plans the most, and what are some of the biggest challenges for keeping the programs viable?
When people think of Medicaid, they often think of pregnant women and children—those remain the primary beneficiaries. Depending on the state, over 50% of births are paid for by Medicaid. If a state has 5 million people on Medicaid, the majority of those people are pregnant women and children, both of whom are likely to be healthy and once the mother has her baby, she is emancipated from Medicaid. The costs are manageable.
But, Medicaid benefits are also meeting the needs of individuals with physical disabilities, or individuals with intellectual and developmental disabilities—and those patients bring high costs. If you have a patient who needs 24-hour nursing, or somebody who needs in-home services, their care utilization can be quite high.
The fact is, with Medicaid there’s about 40% of your population that uses 60% of the benefits. I can tell you from my experience as Medicaid director in Texas, that’s what our data said. And it’s because, for those 40%, care is resource intensive. So, it’s very important to manage care appropriately to produce the best outcomes and contain costs.