Medicaid Finance


Medicaid being the main public health insurance program for peoplewith low income in the US, has been experiencing challenges in itsrole to cover millions of uninsured Americans.

The scope of this problem is that the expansion Medicaid programsrequires more finances is to be able to cover millions of uninsuredadults who are not included in Medicaid. However, the Supreme Courtruling on the Affordable Care Act in June 2012 made the expansion ofMedicaid optional for states. Besides that, the magnitude of thisproblem is ACA introducing reforms that improve the program in allstates regardless of the expansion by Medicaid. The law requiresstates to modernize their enrollment processes for purposes ofcreating coordinated eligibility Medicaid enrollment. An array of newauthority has also been established by ACA and funding opportunitiesfor delivery system and payment reform initiatives leading to seriousgaps and cost redundancy.

This problem affects many people who depend on Medicaid for healthbenefits. Medicaid beneficiaries who are mostly children, theelderly, disabled adults, non –elderly and non-disabled are boundto suffer if ACA federal provides funding for only specifiedcategories of low-income individuals. One formal policy actor thatthis challenge is likely to affect is in Mississippi, the pooreststate today. The federal medical assistance percentage varies basedon state per capita income and the FMAP for FY 2015 began in Oct 1,2014 ranging from 50-73.6% (Paradise, 2015). One informal policyactor likely to be affected by Medicaid moving forward are physiciansand health professionals who provide care to undeserved areas. Theyhave to serve the increasing number of patients in all states.

Two indirect tools of administration covered in this case that arebeing used to manage Medicaid are home and community based services.HCBS target case management, family, caregiver training, personalcare services, rehabilitative services and housing coordination. Themanagement services help individuals locate and obtain communityhousing and a diversity of services like long term care in the US.

Private contracting for public services or allowing the market tomanage services for efficiency and cost savings is evident inMedicaid. Most beneficiaries of Medicaid obtain their care fromprivate office based physicians or health professional. Safety nethospitals play a crucial role in serving patients. 39 states contractmanaged care organizations to serve some Medicaid beneficiariesacross nations. More than half of the beneficiaries are children andparents getting their care through plans like the monthly state paidMCO premiums. Many beneficiaries of Medicaid are enrolled in primarycare case manage programs that states pay on a fee for service. Theyalso pay primary care givers a small additional monthly fee tocoordinate care for patients asserts Paradise (2015).

The long-term financing problems for Medicaid are finding a balancebetween the revenues and expenditure for states. States administerMedicaid programs and finance the program jointly meaning that theyrevenues are shared. According to Paradise (2015), during economicrecession, enrollment in Medicaid increases yet at that time taxrevenues decline due to the downturn. At such times, states constrainMedicaid spending through cutting provider payment rates and reducingbenefits. Medicaid costs are also shared by states and federalgovernments spending at least one dollar for beneficiaries eligiblefor Medicaid as per the pre ACA law.

One question after reading this case is what does Medicaid need to doto s it moves forward to reach out to many states and provide qualityhealth care services?


Paradise, J. (2015). ‘Medicaid moving forward,’ Health Reform,Family foundation, retrieved from