Is medicaid sustainable? Spending projections for the program's second forty years

Health Affairs

Volumn 26, Issue 2, 2007, Pages

  Kronick, Richard ^a   Rousseau, David ^b  

^a UNIVERSITY OF CALIFORNIA   (United States)

^b Kaiser Commission on Medicaid and the Uninsured   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; COST CONTROL; ECONOMICS; FORECASTING; HEALTH CARE COST; HEALTH CARE PLANNING; HEALTH CARE POLICY; HUMAN; MANAGEMENT; MEDICAID; NEEDS ASSESSMENT; STANDARD; TIME; UNITED STATES;

COST CONTROL; COST SAVINGS; FORECASTING; HEALTH CARE REFORM; HEALTH EXPENDITURES; HUMANS; MEDICAID; NEEDS ASSESSMENT; POLICY MAKING; STATE HEALTH PLANS; TIME FACTORS; UNITED STATES;

EID: 33947310236     PISSN: 02782715     EISSN: 02782715     Source Type: Journal    
DOI: 10.1377/hlthaff.26.2.w271     Document Type: Article

References (27)

1. Medicaid Commission, Final Report and Recommendations, December 2006, http://aspe.hhs.gov/medicaid/122906rpt.pdf (accessed 5 January 2007).
2. Congressional Budget Office, "Fact Sheet for CBO's March 2006 Baseline: Medicaid and the State Children's Health Insurance Program," March 2006, http://www.cbo.gov/budget/factsheets/2006b/medicaid.pdf (accessed 23 October 2006);
3. and U.S. Department of Health and Human Services, "HHS Budget in Brief, Fiscal Year 2007," February 2006, http://www.hhs.gov/budget/ 07budget/2007BudgetInBrief.pdf (accessed 25 October 2006).
4. CBO, "The Long-Term Budget Outlook," December 2005, http://cbo.gov/ftpdocs/69xx/doc6982/12-15-LongTermOutlook.pdf (accessed 29 September 2006).
5. That is, Medicaid spending/GDP = (Medicaid spending/NHE) x (NHE/GDP).
6. That is, Medicaid spending/NHE = (Medicaid spending/Medicaid beneficiaries) x (Medicaid beneficiaries/U.S. population) x (U.S. population/NHE) = (Medicaid beneficiaries/U.S. population) x (Medicaid spending per beneficiary)/(NHE per capita).
7. Our online technical appendix is available at http://content. healthaffairs.org/cgi/content/full/26/2/w271/DC2. All data in this analysis are on a calendar-year basis.
8. Projections of NHE as a share of GDP were produced by the Centers for Medicare and Medicaid Services (CMS) in the winter of 2006 and were supplied by Stephen Heffler of the CMS Office of the Actuary.
9. See the online technical appendix, as in Note 6.
10. Social Security Administration, "2006 SSI Annual Report," May 2006, http://www.ssa.gov/OACT/SSIR/SSI06/index.html (accessed 23 January 2007). The correlation between the number of under-age-sixty-five Supplemental Security Income (SSI) beneficiaries and the number of cash Medicaid disabled beneficiaries from 1990 to 2003 is 0.95.
11. The LTCFM was initially developed in the mid-1980s and has been updated and enhanced under a contract with the Office of the Assistant Secretary for Planning and Evaluation (ASPE) in the U.S. Department of Health and Human Services. See D.L. Kennell et al., Brookings/ICF Long Term Care Financing Model: Model Assumptions, February 1992, http://aspe.hhs.gov/daltcp/reports/ modampes.htm (accessed 23 January 2007), for the original model specifications. We used baseline output from the updated model that was graciously provided by the staff of the Georgetown University Long-Term Care Financing Project.
12. The updated model is described in P. Kemper, H.L. Komisar, and L. Alecxih, "Long-Term Care over an Uncertain Future: What Can Current Retirees Expect?" Inquiry 42, no. 4 (2005/2006): 335-350.
13. See the online technical appendix, as in Note 6.
14. The decline might be a result in part of case-mix changes.
15. See the online technical appendix, as in Note 6.
16. Social Security Administration, "2006 SSI Annual Report."
17. See the online technical appendix, as in Note 6.
18. The "clawback" payments (phased-down state contribution, in statute) in 2006 and beyond are not counted as Medicaid spending.
19. K.G. Manton and X. Gu, "Changes in the Prevalence of Chronic Disability in the United States Black and Non-Black Population above Age Sixty-five from 1982 to 1999," Proceedings of the National Academy of Sciences (U.S.) 98, no. 11 (2001): 6354-6359;
20. and D.A. Wolf, K. Hunt, and J. Knickman, "Perspectives on the Recent Decline in Disability at Older Ages," Milbank Quarterly 83, no. 3 (2005): 365-395.
21. CBO, "Fact Sheet for CBO's March 2006 Baseline"; and DHHS, "HHS Budget in Brief."
22. See the online technical appendix, as in Note 6.
23. National Association of State Budget Officers, 2004 State Expenditure Report, Table 28, http://www.nasbo.org/Publications/PDFs/2004ExpendReport. pdf (accessed 23 October 2006). Including federal Medicaid funds in the state spending total raises the 2004 percentage to 22.3 percent. These totals exclude administrative spending.
24. Data on states' own-source revenues from FY 1977 to FY 2004 were provided by the Rockefeller Institute of Government, State University of New York. State tax revenue data for FY 2005 are from Census Bureau, "Federal, State, and Local Governments: 2005 State Government Tax Collections," 23 May 2006, http://www.census.gov/govs/www/statetax05.html (accessed 23 January 2007).
25. CBO, "The Long-Term Budget Outlook."
26. Boards of Trustees, 2006 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 1 May 2006, http://www.cms.hhs.gov/ReportsTrustFunds/downloads/ tr2006.pdf (accessed 23 January 2007).
27. J. Holahan, M. Cohen, and D. Rousseau, "What Factors Contributed to Medicaid Spending and Enrollment Growth between 2000-2005" (Washington: Kaiser Commission on Medicaid and the Uninsured, February 2007).