November 2015

12 Things to Know About Medicaid In Rhode Island

This is a fantastic recap of the economics and demographics of the Medicaid Program in Rhode Island. I highly recommend all citizens understand the scope and scale of the program in Rhode Island.

http://wpri.com/2014/12/08/12-things-to-know-about-medicaid-in-rhode-island/

1. Rhode Island spends a ton of money on Medicaid every year.

Rhode Island spent $1.785 billion on Medicaid in the 12-month fiscal year that ended June 30, 2013; the total state budget that year was $8.1 billion.

Slightly more than half the money spent on Medicaid services usually comes from the federal government, with the rest covered by taxpayers in Rhode Island.

Here’s a chart showing the annual cost of Medicaid in Rhode Island over the five fiscal years through 2012-13:

2. Nearly one in four Rhode Islanders used Medicaid in recent years.

Part of why Medicaid is such an expensive program is because it’s such a large one. During the 2012-13 fiscal year, 22% of Rhode Island’s population – about 230,000 of the state’s roughly 1 million residents – used Medicaid at some point in the year.

Since there’s some amount of “churn” in Medicaid throughout the year – people signing up, people dropping off – the average number of Rhode Islanders signed up for Medicaid at any point in the fiscal year was somewhat lower: 195,000.

3. Rhode Island spends more per Medicaid enrollee than most states.

Or at least it did as of 2008-09, according to this chart from the Center on Budget and Policy Priorities, a liberal research group:

All the states in the Northeast spent more on Medicaid per beneficiary than the national average, with the exception of Vermont.

4. Obamacare is expanding the Medicaid program significantly.

The Affordable Care Act – Obamacare – expanded eligibility for Medicaid. Unsurprisingly, that has led to a surge in enrollment and will lead to a surge in spending on the program.

Rhode Island’s total spending on Medicaid is projected to be $2.7 billion in the current fiscal year, which runs through June 30, 2015 – an increase of nearly $1 billion from two years earlier. Enrollment is projected to jump from about 190,000 residents at the end of last year to 261,828 residents as of this past summer. The federal government is picking up much of the tab for newly eligible enrollees, however.

Here’s a chart showing that Medicaid spending is projected to consume nearly one-third of Rhode Island’s general revenue (basically, taxes and fees paid in the state) in this year’s budget:

5. Nearly half of Medicaid spending goes to hospitals and nursing facilities.

This chart is pretty self-explanatory:

As the figures at the bottom of the chart show, there’s a big difference in how fast costs have been going up annually between different types of Medicaid providers in Rhode Island.

6. The majority of Medicaid spending is for elderly and disabled residents.

The stereotypical Medicaid beneficiaries are single mothers and their children, and for good reason – in Rhode Island, they made up two-thirds of those who used the program (134,383) in the 2012-13 fiscal year. Their share is up to roughly 80% post-Obamacare, state officials report.

However, children and families aren’t where most of the Medicaid money is spent – not by a long shot.

Elderly Rhode Islanders accounted for just 9% of Medicaid enrollees (18,077 residents) but 27% of Medicaid spending ($484 million) in 2012-13. Similarly, disabled adult Rhode Islanders accounted for just 16% of Medicaid enrollees (30,987 residents) but 37% of Medicaid spending ($667 million).

It cost Medicaid $2,230 per member per month to cover elderly Rhode Islanders and $1,793 per member per month to cover disabled adult Rhode Islanders in 2012-13. It only cost $288 per member per month to cover Rhode Island children and families; they’re relatively cheap to cover.

Here’s the breakdown of spending on the four subgroups of Medicaid beneficiaries:

Put succinctly, the majority of people on Medicaid are children and families, but the majority of Medicaid spending is on elderly and disabled adult residents.

7. Rhode Island Medicaid spending on its two priciest groups is above average.

In 2011, Rhode Island’s Medicaid program spent 68% more than the national average for elderly residents and 15% more for disabled adult residents. These costlier-to-cover groups also made up a larger share of Rhode Island’s Medicaid enrollment:

8. Spending per Medicaid enrollee has been falling, except for the elderly.

Rhode Island’s total Medicaid spending rose an average of 1.3% a year between the state’s 2008-09 to 2012-13 fiscal years, and actually fell by 1.5% per enrollee over that period.

The outlier was elderly residents, the only group for whom cost-per-member rose over that period, as this chart shows:

9. Two-thirds of Medicaid spending on the elderly goes to nursing facilities.

“Most of the growth in Medicaid expenditure for elders has been in nursing home services and home and community based services,” the executive office explains in its report. “The increase in home and community based services is due in part to an effort to invest in alternatives to institutional/nursing home care.”

And here’s a chart showing the same breakdown for adults with disabilities:

10. Just 7% of Rhode Island Medicaid enrollees cost more than $1 billion a year.

This may be the most astounding fact on this page: the top 7% of Medicaid beneficiaries account for nearly two-thirds of spending on medical claims.

Put another way, out of the roughly 230,000 Rhode Island residents who used Medicaid during the 2012-13 fiscal year, on average one group of about 119,000 filed only $992 each in medical claims, while another group of about 16,000 (that top 7%) filed $66,000 each in claims.

“These high utilizes typically present with multiple, complex conditions, requiring care coordination across a variety of providers,” the executive office’s report explains.

Here’s a chart:

So where did all that money go? “Nearly half (49%) of claims expenditure on high cost users is on nursing facilities and residential and rehabilitation services for persons with developmental disabilities,” the report says. It also says: “Many high cost users are those who are institutionalized year-round.”

Here’s a chart on that:

11. Officials say Medicaid is a key reason Rhode Island faces large deficits.

The House Fiscal Office is projecting a larger budget shortfall in each of the coming fiscal years, according to these estimates provided to state lawmakers last month:

12. Growing Medicaid costs are a key concern to state officials.

The same House Fiscal presentation singled out Medicaid for growing far faster than state revenue:

13. Check out this Nesi’s Notes post featuring some interesting feedback to the Medicaid numbers.