HOUSE_OVERSIGHT_021001.jpg

Restructure Medicare & Medicaid: Policy Option #4

Reducing Optional Services + Optional Beneficiary Groups¹ Could Save Up to ~60% of Annual Medicaid Cost, per Kaiser Family Foundation

Note: 1) Medicaid is a jointly financed federal and state program that provides health and long-term care services to 55 million low-income Americans. As a condition of participating in Medicaid, states are required to cover certain “mandatory” populations and to provide a specified set of benefits. States also have discretion to cover additional low-income individuals in each of these categories (“optional groups”) and receive federal matching payments. Optional eligibility categories include children and parents, persons with disabilities and the elderly above mandatory coverage limits; persons residing in nursing facilities; and the medically needy. Source: Kaiser Family Foundation, 2005

KP
CB
www.kpcb.com
USA Inc. | What Might a Turnaround Expert Consider? 319

Restructure Medicare & Medicaid: Policy Option # 4 – Reducing Optional Services + Beneficiary Groups¹ Could Save Up to 60% of Annual Medicaid Spending

Medicaid Expenditures by Eligibility Group and Type of Service, 2001

Mandatory Services* for Optional Groups 30.1%
Mandatory Services for Mandatory Groups 39.4%
Optional Services* for Optional Groups 12.3%
Optional Services for Mandatory Groups 18.1%

Eliminating optional groups could save ~42% of total Medicaid spending
Federal-required mandatory services / groups = ~40% total spending
Eliminating optional services could save ~30% of total Medicaid spending

Note: 1) Medicaid is a jointly financed federal and state program that provides health and long-term care services to 55 million low-income Americans. As a condition of participating in Medicaid, states are required to cover certain “mandatory” populations and to provide a specified set of benefits. States also have discretion to cover additional low-income individuals in each of these categories (“optional groups”) and receive federal matching payments. Optional eligibility categories include children and parents, persons with disabilities and the elderly above mandatory coverage limits; persons residing in nursing facilities; and the medically needy. Source: Kaiser Family Foundation, 2005

KP
CB
www.kpcb.com
USA Inc. | What Might a Turnaround Expert Consider? 320

HOUSE_OVERSIGHT_021001