Medi-Cal

The case for Medicaid reform is strengthened by the program's rising costs and wide variations in state coverage and benefits systems, according to a report in Health Affairs.

The authors propose four reform options for Medicaid:

Expand the income eligibility to 150% of the federal poverty level, eliminate the State Children's Health Insurance Program and integrate children's coverage with Medicaid;
Expand eligibility to 150% of the federal poverty level and increase federal matching rates by 15% for all services;
Expand eligibility for adults only to 100% of the federal poverty level and retain SCHIP; and
Transfer responsibility for treating people dually eligible for Medicaid and Medicare, except for acute care services that Medicare currently does not cover.

All four options would make prescription drug coverage mandatory, increase flexibility in cost sharing for beneficiaries whose incomes exceed 150% of the poverty level, and shift responsibility for determining Medicare premiums and cost-sharing policies for acute care services to the federal government.

The authors conclude that Medicaid reform would help ease financial stress on state budgets and decrease the number of uninsured residents nationwide (Holahan/Weil, Health Affairs, 2/23).

Medicaid should remain sustainable for the next four decades, despite higher spending for the program in conjunction with substantial increases in other government services, according to a report in Health Affairs.

The authors estimate that Medicaid will account for 16.5% of national health expenditures on average from 2006 to 2025, and then increase to 19% by 2045. The report noted that Medicaid in 2005 accounted for 16.5% of national health spending.

Researchers estimate that federal revenue will increase sufficiently to sustain spending growth in both Medicaid and other programs. As a result, the report recommends that policymakers adopt a "measured and careful approach" to Medicaid reform (Kronick/Rousseau, Health Affairs, 2/23). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.