Medicaid plays a central role in our health care system, providing coverage that is unavailable under Medicare or most employer-sponsored health insurance. People needing coverage for long-term care services and supports, rehabilitative services, personal care, assistive technology or non-emergency transportation usually must obtain this coverage from Medicaid. The program also is crucial in covering the uninsured. In particular, children, people with disabilities, older adults and low-income households depend on Medicaid for their coverage. Medicaid’s coverage of the uninsured will expand significantly in 2014 under the Affordable Care Act if all states choose to adopt the expansion. The Medicaid program is administered jointly by the federal government and the states, with the federal government paying for 57 percent of the program’s costs today and a substantially higher percentage when states expand coverage.
Medicaid’s track record highlights its importance in our health care system and economy:
Medicaid has been a victim of the country’s skyrocketing health costs, which have plagued all forms of health coverage. Opponents of Medicaid (and public health programs in general) are trying to use the economic crisis and state budget problems to advance proposals they have pushed for years to make huge cuts in the program. Some of these proposals would end Medicaid as we know it by fundamentally restructuring the program.
It is essential that savings in Medicaid be achieved through improving the efficiency of health care delivery and the accuracy of payments to providers, not through arbitrary reductions in funding.
When the CHIP was established in 1997, 10 million children were uninsured. To address this problem, the CHIP program provides flexibility for states to expand their Medicaid programs or to establish separate programs to provide coverage for children. Like Medicaid, CHIP is a federal-state partnership, but the federal government pays a matching rate that is higher than the rate it pays for Medicaid, covering 70 percent of CHIP spending, on average.
Currently, the CHIP program provides essential coverage to nearly 8 million children in low-income families. During the economic crisis, CHIP and Medicaid enrollment expanded to protect families in need. Between 2007 and 2009, the uninsured rate for children actually declined by 600,000—despite a reduction in the number covered by employer-sponsored insurance—thanks to an increase in CHIP and Medicaid enrollment. The expansion of the program also served as fiscal stimulus that has preserved health care jobs during the recession.
Nevertheless, there are still 8.3 million uninsured children in the United States, including 5 million who are eligible for CHIP or Medicaid. When Congress reauthorized CHIP in 2009, it established a new grant program to address this enrollment gap through outreach and education. The health exchanges that will be established under the Affordable Care Act will facilitate enrollment in CHIP and provide subsidized coverage for many children who are not eligible for the program.
The CHIP program is only funded through fiscal year 2015. It is critical that future health reform efforts build upon the success of CHIP in providing health care coverage for all of America’s children.