Budgetary Analysis

HCS/550
April 21, 2014

Budgetary Analysis
Each state offers Medicaid and CHIP programs. There is approximately sixty million Americans with this health care coverage. Individuals with disabilities, parents, seniors, pregnant women and children are all eligible to receive the Medicaid plan. With federal minimum standards in place each state sets there individual criteria. Some federal laws in place are to cover certain population groups (mandatory eligibility groups) and gives them the flexibility to cover other population groups (optional eligibility groups). Medicaid, individuals must satisfy federal and state requirements regarding their current residency, immigration status, and documentation that they are a U.S. citizen.
The Affordable Care Act of 2010 helped to expand Medicaid in 2014. “The Affordable Care Act provides Americans with better health security by putting in place comprehensive health insurance reforms that will: * Expand coverage, * Hold insurance companies accountable, * Lower health care costs, * Guarantee more choice, and * Enhance the quality of care for all Americans.

Most recently, the MMA of 2003 included increases in DSH state allotments for 2004-2011 and added requirements for an independently certified annual audit. Figure 8.14 shows DSH funds as a percentage of the total Medicaid budget.

The Affordable Care Act actually refers to two separate pieces of legislation — the Patient Protection and Affordable Care Act (P.L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152) — that, together expand Medicaid coverage to millions of low-income Americans and makes numerous improvements to both Medicaid and the Children's Health Insurance Program (CHIP)” (medicaid.gov).
Medicaid extends to any previously uncovered populations or receive federal Medicaid matching funds for otherwise unallowable costs under the terms of a section 1115 demonstration. Each individual state is required to establish that the demonstration is budget neutral. Section 1115 of the Social Security Act requires states to establish that the demonstration is budget neutral and that the Medicaid program is generating a savings. Health and Human Services (HHS) approves the demonstration, it is typically approved for a 5-year period. “Once approved, each demonstration operates under a negotiated budget neutrality agreement that places a limit on federal Medicaid spending over the life of the demonstration. In assessing a state’s projected spending limit, HHS’s policy calls for using estimates of growth that are the lower of: (1) the state’s historical growth for Medicaid in recent years, or (2) the President’s budget Medicaid trend rate projected for the nation. The lower rate is referred to as the benchmark growth rate” gao.gov).
The capital of Texas is Austin. “The Republican-majority Texas House and Senate on Sunday sent Governor Rick Perry a proposal to prevent the state from expanding its Medicaid program as outlined by President Barack Obama's healthcare reform law” (huffingtonpost, (2013).There has been an amendment to the Medicaid that health officials may only provide medical assistance to a person who would have been otherwise eligible for medical assistance or for whom federal matching funds were available with eligibility effective December 31, 2013.
The amendment by the House-Senate conference committee choosing to keep, although it’s the language is tweaked to prevent unintended consequences members. The Medicaid number for previous years in Texas are as follows: * Medicaid as a percentage of Texas budget, SFY 2011: 26 percent * Percentage of Texas Medicaid budget spent on children, SFY 2011: 33 percent * Dollars spent on Texas Medicaid, FFY 2011: $29.4 billion * Texas Medicaid payments to nursing homes, FFY 2010: $2.3 billion * Texas Medicaid prescription drug expenditures, SFY 2011: $2.5 billion * Percentage of Texas Medicaid clients under age 21, SFY 2011: 77 percent * Percentage of Texas children on Medicaid or CHIP, CY 2011: 47 percent * Percentage of nursing home residents covered by Medicaid, CY 2010: 59 percent * Percentage of births covered by Texas Medicaid in 2011, CY 2011: 56.4 percent * Percentage of Texas Medicaid clients in managed care, SFY 2011: 76 percent * Unduplicated number of Texans receiving Medicaid, SFY 2011: 4.57 million * Average number of Texans with Medicaid each month, SFY 2011: 3.54 million * Percentage of Texas population covered by Medicaid, CY 2011: 14 percent (hhsc). *
Texas also offers Medicaid Managed Care organization (MCOs) as well to provide, arrange for, and coordinate preventative, primary, and acute care covered services, including pharmacy and it is called Medicaid’s State of Texas Access Reform (STAR) program. STAR Health is for children in foster care, who are an at high-risk with higher or greater medical and behavioral health care needs than most children in Medicaid, and whose changing circumstances make continuity of care an ongoing challenge. “An estimated 6.2 million Texans, or 24.6 percent of the state population, had no health insurance in 2010.1 Texas has the highest rate in the nation for people without insurance.2 In 2010, approximately 1.2 million or 16.3 percent (down from 16.5 percent in 2009) of Texas children under age 18 had no insurance.3 The national average was 9.8 percent” (hhsc). The Medicaid program of Texas is, under the direction of the Health and Human Services Commission (HHSC). In 1991, various pieces of federal legislation were passed, limiting or capping DSH funding increases. Federal law capped the size of Texas’ DSH program at $1.513 billion. Nationally, between 1989 and 1992, federal funding for DSH significantly increased from $400 million to $10.1 billion which is approximately 15 percent.
Currently in Texas legislation there are several items affecting Medicaid and CHIPS to include: * Cost Containment and other quality measures * Hospital Payment System Reform – Texas Health Care Transformation and quality Improvement Program 1115 Waiver * Managed Care Expansion * Pharmacy Benefits in Managed Care * Dental Benefits in Managed Care * Medicaid Cost Sharing * Nursing Services Assessment * CHIP Coverage for Dependents of Public Employees * Streamline 1915(c) Waiver Programs * Physician Incentive Program * Texas Institute of Health Care Quality and Efficiency

There are several different committee * Medicaid/CHIP Quality-Based Payment Advisory Committee * The Physician Payment Advisory Committee * Neonatal Intensive Care Unit Council * Texas Diabetes Council
“Medicaid is jointly financed by the federal government and the states. The Secretary of the U.S. Department of Health and Human Services (U.S. HHS) determines each state’s federal share of most health care costs (federal medical assistance percentage - FMAP) using a formula based on average state per capita income compared to the U.S. average”( hhsc). Below is Historical Major Federal Medicaid and CHIP Legislation, 1965 to present: * Social Security Amendments of 1967 * Public Law 92-223 of 1971 * Social Security Amendments of 1972 * Omnibus Budget Reconciliation Act of 1981 (OBRA) * Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) * Deficit Reduction Act of 1984 (DEFRA) * Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) * OBRA of 1986 * OBRA of 1987 * Medicare Catastrophic Coverage Act of 1988 * OBRA of 1989 * Medicaid Voluntary Contribution and Provider-Specific Tax Amendments of 1991 * OBRA of 1993 * Health Insurance Portability and Accountability Act of 1996 (HIPAA) (P.L. 104-191) * Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) (P.L. 104-193) * The BBA of 1997 (P.L. 105-33) * Balanced Budget Refinement Act of 1999 (BBRA) (Incorporated by reference in P.L. 106-113) * The Ticket to Work and Work Incentives Improvement Act of 1999 (TWWIIA) (P.L. 106-170) * Breast and Cervical Cancer Prevention and Treatment Act of 2000 (P.L. 106-354) * Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) (P.L. 106-554) * Improper Payments Information Act of 2002 (IPIA) * Jobs and Growth Tax Relief Reconciliation Act of 2003 (TRRA) (P.L. 108-27) * CHIP Allotment Extension (P.L. 108-74) * The Deficit Reduction Act (DRA) of 2005 (P.L. 109-171 * Increased state allotments for DSH payments for 2004-2010. * 2-41 * Deficit Reduction Act of 2005 (DRA) (P.L. 109-171) * U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act of 2007 (P.L. 110-028) * The U.S. Troop Readiness, Veteran’s Care, Katrina Recovery, and Iraq Accountability Appropriations Act was signed into law May 25, 2007. * Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) (P.L. 110-343) * MHPAEA was incorporated into the Emergency Economic Stabilization Act of 2008 that was signed into federal law on October 3, 2008. * Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) * Health Care and Education Reconciliation Act of 2010 (HCERA) (P.L. 111-152) (hhsc).

The Social Security Act of 1965 created both Medicaid and Medicare. It is hard to determine to changes necessary within the Medicaid program. The state of Texas does offer additional services other than just the federal required guidelines.
In Conclusion there is approximately sixty million Americans with this health care coverage. Individuals with disabilities, parents, seniors, pregnant women and children are all eligible to receive the Medicaid plan. Medicaid is financed by the federal government and the states. The Secretary of the U.S. Department of Health and Human Services (U.S. HHS) determines each state’s federal share of most health care costs. The Medicaid program of Texas is, under the direction of the Health and Human Services Commission (HHSC). An estimated 6.2 million Texans, or 24.6 percent of the state population, had no health insurance in 2010.1 Texas has the highest rate in the nation for people without insurance. In 2010, approximately 1.2 million or 16.3 percent (down from 16.5 percent in 2009) of Texas children under age 18 had no insurance. The Affordable Care Act of 2010 helped to expand Medicaid in 2014. The Affordable Care Act provides Americans with better health security by putting in place The Affordable Care Act actually refers to two separate pieces of legislation — the Patient Protection and Affordable Care Act (P.L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152) comprehensive health insurance reforms that will: expand coverage to all individuals. This is part of health care reform. The senate and the house help create and amend the legislation of the Medicaid health care bills. Increases in Medicaid spending are caused by higher utilization and increases in the costs of services. At the beginning of the 2014-2015 biennium in September 2013, the Medicaid data used for projections is five months old. By the end of the biennium in August 2015, the data is 29 months old. If Medicaid budget projections were too low, this could result in a budget shortfall. If projections were too high, it could result in an unexpected surplus.

www.hhsc.state.tx.us/medicaid/reports/pb9/pinkbook.pdf www.gao.gov/assets/660/655483.pdf‎ http://www.medicaid.gov http://www.huffingtonpost.com/2013/05/27/texas-medicaid_n_3341034.html http://www.medicaid.gov/AffordableCareAct/Affordable-Care-Act.html http://www.ncsl.org/research/health/medicaid-home-page.aspx Reference
http://www.medicaid.gov/AffordableCareAct/Affordable-Care-Act.html