Kaiser Family Foundation 50-State Budget Survey Provides Insight Into Medicaid Trends

The Kaiser Family Foundation’s annual 50-state budget survey is here! This year, they’ve captured the findings in three reports – Medicaid Enrollment & Spending Growth: FY 2017 & 2018, providing an analysis of national trends in Medicaid enrollment and spending; Medicaid Moving Ahead in Uncertain Times, taking a more detailed look at the policy and programmatic changes across all states; and Putting Medicaid in the Larger Budget Context: An In-Depth Look at Three States in FY 2017 & 2018, examining Medicaid programs in Nevada, North Carolina, and West Virginia. Here are some of the key findings from the reports.

Trends in Medicaid Enrollment and Spending. In fiscal years 2016 and 2017, growth in Medicaid spending and enrollment slowed. The state share of Medicaid spending ticked up in 2017 as the FMAP for the newly-eligible expansion population dropped from 100 to 95 percent. States developed their 2018 budgets amidst much uncertainty at the federal level – ACA repeal and replace, cutting and capping Medicaid, and delays in extending CHIP funding – along with slow and volatile state revenues. These circumstances make it difficult to predict trends in enrollment and spending in 2018, but states generally project slower enrollment growth even as the rate of growth in spending increases. This is due to a relatively stable economy and tapering of ACA-related enrollment growth, along with some provider payment rate increases and rising costs of prescription drugs and long-term care.

Medicaid Moving Ahead. Seven states implemented or planned targeted eligibility expansions in FY 2017 and 2018, including four states taking up the option to cover lawfully residing immigrant children. On the other hand, eight states plan to restrict eligibility through section 1115 waivers in 2018, including by imposing work requirements and waiving retroactive coverage. These waiver requests have not been approved to date.

Twenty-six states expanded or enhanced covered benefits in FY 2017 and another 17 states plan to do so in FY 2018, most commonly for behavioral health/substance use disorder services and dental services. Table 16 in the report shows the state-by-state breakdown, including pediatric benefit expansions like autism-related services (KS, MD, ND, OR, SC), increased coverage of behavioral health services for children with serious emotional disturbance (NH), easier access to school-based services (OK), and new dental services for former foster youth (MD).

The predominant delivery system continues to be managed care, with 29 of the 39 states with comprehensive risk-based managed care organizations (MCOs) reporting 75% penetration or higher. States are also continuing to “carve in” behavioral health care services in managed care and expand managed care to more medically complex populations. The report flags more recent developments in MCO arrangements too, like requiring MCOs to screen participants for social needs and using MCO contracts to promote value-based payment models. For example, in Louisiana, as a strategy go address social determinants of health, managed care plans are required to refer beneficiaries to WIC and supportive housing when appropriate.

In-Depth Look at Nevada, North Carolina, and West Virginia. In this report, the Medicaid-related findings from the budget survey are put in a broader context, like the state’s economic and budget outlook and demographic characteristics, and described in greater detail, like delivery system reform efforts and how the state is responding to the opioid epidemic.

In Nevada, the report highlights a finding similar to our finding on children’s coverage in the state – Nevada had the largest percent decline in the nonelderly uninsured rate of any state between 2013 and 2016 (11.8%). The report also finds that Nevada would have an especially hard time adjusting to a per capita cap or block grant model for Medicaid (as has been debated but so far defeated) because the state already operates an efficient Medicaid program (benefit spending per person is lowest in the country), has an aging population (the state has the second-highest projected growth rate in the percent of the population 85 years old or above), and has some high-cost populations (the state has been hit particularly hard by the HIV and opioid epidemics).

In North Carolina, the report highlights that because North Carolina has not expanded Medicaid for parents and other adults under the ACA, many adults fall into the coverage gap (income too high to qualify for Medicaid but too low to qualify for financial assistance in the Marketplace). In fact, the state has the 4th largest number of adults in the coverage gap (219,000 people), following Texas, Florida, and Georgia. This has contributed to North Carolina’s high uninsured rate of 11%, compared to 9% nationally. The report also describes North Carolina’s highly regarded primary care case management program known as Community Care of North Carolina (CCNC) and the state’s plan to transition away from CCNC to a managed care model. CCNC has been shown to save money while improving health outcomes like reducing hospital admissions and emergency department visits for asthma.

In West Virginia, Medicaid plays an especially important role because the state has the third highest percentage of people living in poverty (18%) and the second lowest per capita income ($36,132 in 2016), leading to the second highest share of its total population being enrolled in Medicaid (26%). The economy in West Virginia has struggled to rebound from the recession, but the state had second-highest GDP growth rate in the nation for the first quarter of 2017 and economists project continued moderate growth for the remainder of the year. The opioid epidemic has hit West Virginia harder than most other states, and the report highlights the multiple steps and interventions the state has taken to combat it. Unfortunately, the statistics remain startling – 30% increase in the rate of drug overdose deaths, 37 of every 1,000 births involve a baby born with neonatal abstinence syndrome, and 30% increase in the number of out-of-home foster care placements. CMS recently approved West Virginia’s 1115 waiver that may help improve these statistics. The waiver expands coverage for substance use disorder treatment including medications, peer recovery support, withdrawal management, and short-term residential services.

As usual, the KFF budget survey is chock-full of information about the state of play for Medicaid across the country. Check out the links above to see what you can learn about your state.

Kelly Whitener
Kelly Whitener is an Associate Professor of the Practice at the Center for Children and Families

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