The tragedy of the COVID-19 pandemic remains seared into the fabric of our society, with over 1 million lives lost, significant economic impacts, and a health care workforce that remains frustrated and in critically short supply. Early on, federal legislation prohibited states from disenrolling people from Medicaid in exchange for enhanced federal matching funds, which resulted in over 21 million additional enrollees by December 2022 (asamonitor.pub/3ZM6lCz). But how much do you really know about the program and its expansion during the pandemic and current state efforts at contraction?
So, what is Medicaid? It is a jointly administered federal-state program that provides health care coverage to low-income households. The program is needs-based and available in all 50 states, the District of Columbia, and U.S. territories. Medicaid came into existence as a part of the Social Security Amendment of 1965. Over the next decade, eligibility included elderly, blind, and disabled individuals. It took almost 20 years for complete implementation, as Arizona became the last state to opt into Medicaid in 1982. The Affordable Care Act (ACA) of 2010 allowed states to further expand Medicaid to cover all Americans under 65 with incomes up to 138% of the federal poverty level (those making less than $20,120). To date, 41 states and D.C. have expanded Medicaid. From its inception to now, Medicaid is the safety net medical coverage program for 90 million U.S. citizens.
“Children are by far the largest cohort of enrollees at 40%. Nonelderly adults constitute 22%, given access to expansion during the pandemic. Other adults meeting criteria account for 17%, and people with disabilities and those over 65 account for the remaining 20%. Notably, this cohort of disabled and elderly account for half of all Medicaid health expenses.”
While there are mandatory eligibility groups defined by federal law, Medicaid differs from Medicare in that each state administers its own program. This allows for additional eligibility criteria and service offerings with a wide variability of benefits and expenditures. State spending per enrollee varies, from Nevada spending $4,800 per enrollee to South Dakota spending $10,500 per enrollee. In 2021, 69% of Medicaid funding came from the federal government. In fact, Medicaid finances one-fifth of all health care spending annually (asamonitor.pub/3tjAygd; asamonitor.pub/46o06HM; asamonitor.pub/3LSM7S5).
Figure 1: Adapted from NHE Fact Sheet. U.S. Centers for Medicare & Medicaid Services website (asamonitor.pub/3tjAygd).
Children are by far the largest cohort of enrollees at 40%. Nonelderly adults constitute 22%, given access to expansion during the pandemic. Other adults meeting criteria account for 17%, and people with disabilities and those over 65 account for the remaining 20%. Notably, this cohort of disabled and elderly account for half of all Medicaid health expenses (asamonitor.pub/46o06HM).
The program has obvious benefits for society. One in three school-aged children are covered by Medicaid or the Children’s Health Insurance Program (CHIP) (asamonitor.pub/3Q7kdo3). The program also covers 41% of all births. Medicaid provides coverage for 62% of all nursing home residents and 43% of all disabled, nonelderly adults (asamonitor.pub/46o06HM). A Kaiser Foundation literature review analyzing 404 studies related to Medicaid expansion found positive effects on a broad range of outcomes associated with access, disparities, utilization, and quality of care (asamonitor.pub/3ZMRUOA).
Medicaid constitutes three-quarters of a trillion dollars spent annually in the U.S., with only 11% of spending toward physician services. It covers a broad range of health care expenses such as equipment, home health, nonemergent medical transportation, and nursing home care (see Figure 2).
Figure 2: Percent of Health Care Spending Paid by Medicaid.
These benefits, however, fail to address concerns voiced by policymakers about sustainability or costs. The Consolidated Appropriations Act of 2022 phased down the enhanced federal matching for states, which allowed for a discontinuation of the continuous enrollment provision. Unwinding commenced on April 1, 2023, with 15 million people estimated to be unenrolled by year end. Almost half of those dropped remain eligible for the program, but variable efforts at redetermination leave many people overwhelmed by next steps (asamonitor.pub/46oEMSr).
Medicaid also fails to address longstanding concerns from those caring for patients. For 2019, the Medicaid-to-Medicare fee index for all services was 72%. This is the ratio of payment Medicaid provides when compared to Medicare for the same service. Variability by state is expected, but we see additional variability for services provided, which adds further complexity to this program. The primary care fee index is 67%, while obstetric care receives 80%.
The most recent annual anesthesia commercial conversion factor survey average is $85.42, which stands in stark contrast to the expected Medicare conversion factor for 2023 of $20.6097. In states like California, where one in four patients are covered by Medicaid, the conversion factor forces anesthesia practices to rely on subsidies for viability. This is underscored by a 2019 Government Accountability Office report, which found that Medicare conversion factors averaged 28.9% of commercial rates, highlighting anesthesia underpayment associated with RBRVS creation that led to the “33% Problem” for the specialty and Medicare (asamonitor.pub/3ZNDFt0; asamonitor.pub/46H0h0H). There are a minority of states where Medicaid rates are at or above Medicare, with many states featuring rates that are approximately half of Medicare (asamonitor.pub/3rP5Bjz).
Figure 3: Anesthesia Services: Difference between Private and Medicare Payments Likely Due to Providers Strong Negotiating Position (2020).
So, what can ASA do about this health care behemoth? ASA’s advocacy efforts include ensuring that policymakers are aware of the critical roles anesthesiologists play in the care of Medicaid’s diverse populations. ASA also monitors regulations that can impact patients’ access while also advocating for fair and appropriate payment for anesthesia, critical care, and pain medicine. Most recently, ASA submitted comments on two proposed Medicaid Program Rules (CMS-2442-P and CMS-2439), commending CMS for working toward improved quality and outcomes for Medicaid beneficiaries, but urging continuation of safe, physician-led care. You can see details of ASA’s efforts on its website (asamonitor.pub/3QOe5yn).To gain a better understanding of the state-to-state variability of Medicaid programs, ASA is also fielding a survey about Medicaid conversion factors and payment types. With this information, ASA will gain invaluable information that can allow for a focused approach to better deliver changes to the program that benefits the specialty of anesthesiology.
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