1. Rosenbaum, Sara JD

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IF recent statistics are a reliable guide (Medicaid and CHIP Payment and Access Commission, 2017), at some point during 2018, more than 80 million children and adults-one-quarter of the population-will rely on Medicaid for necessary health care. For the vast majority, Medicaid will be their sole source of coverage. For others-chiefly Medicare beneficiaries in need of long-term care, working adults with disabilities, and parents of children with significant, disabling conditions-Medicaid will supplement other forms of insurance.


Medicaid's seminal role in the American health system transcends the duties typically ascribed to standard insurance. For most Americans, health insurance represents the indispensable means for paying for routine preventive and primary care, along with health care costs associated with episodic serious illnesses and conditions. Medicaid does this as well, of course.


But as a federal policy matter, Medicaid also carries other responsibilities that could be assigned only to a social welfare program whose funding rests on general revenues that in turn give it the ability to grow and reshape itself as needed without the constraints of either premium-based financing or dedicated revenue sources. Because it is a public welfare program that operates without the necessary structural limits on which insurance ordinarily rests, Medicaid is built to embrace risk rather than avoid it. For this reason, and in ways that would far exceed the length of a brief commentary, Medicaid can perform in unique ways. Medicaid is truly a health care safety net. People can enroll when they need health care; there are no fixed annual open-enrollment periods designed to avoid adverse selection. When serious health needs strike, Medicaid imposes no waiting periods; coverage can begin up to 3 months prior to the application date, thereby protecting patients from catastrophic costs incurred prior to application. Coverage is exceptionally broad, encompassing both long-term services and supports and a children's preventive benefit that is unmatched in standard policies. Premiums generally are not used and cost-sharing is nominal.


Because its coverage terms correlate with poverty, and because poverty tends to be concentrated, Medicaid serves the nation in other ways. The program represents the central source of health care financing for the clinics and hospitals that anchor care in the nation's poorest and most medically underserved communities. Effectively our largest public health first responder, Medicaid has, over many years, been rapidly deployed through special demonstration authority to fund care for millions of additional people who have lost everything to disasters, whether naturally occurring or man-made; expanded Medicaid coverage in response to Hurricanes Harvey, Irma, and Maria is just the latest example of this phenomenon. Medicaid serves as a vital companion to other social welfare programs, providing the critical health care component for social interventions ranging from child welfare and special education services to social service programs for children and adults with developmental disabilities and serious mental illness.


Medicaid did not spring full-blown with its missions completely in place. Instead, the program evolved steadily over a half century in the face of a host of public health needs that in turn led both Congress and the states to return to Medicaid repeatedly to address social and health challenges that any society faces, from ending unnecessary deinstitutionalization of people with disabilities and achieving their fuller community integration to treating previously undiagnosed breast and cervical cancer, reducing maternal and infant mortality, ensuring the health of children in the child welfare system, and promoting fuller life opportunities for children and adolescents with disabilities that require special intervention. In 1966, Medicaid covered 1 million people; today it reaches 1 in 4 Americans, and every 1 of the hundreds of amendments that have transformed Medicaid over the past 53 years tells a different public health story.


Despite its size-nearly $600 billion in total spending in the most recent fiscal year-Medicaid is efficient, with per capita costs fully one-third lower than the cost of comparable commercial insurance. But Medicaid's size and relative generosity have made it the subject of enormous controversy; over its life the program has faced a series of existential challenges, 2 of which occurred during 2017. With an administration poised to launch another round of attacks in 2018 under the misnamed banner of welfare reform, there is no real end in sight. The summer of 2017 saw perhaps the most spectacular challenge as part of the effort to repeal and replace the Affordable Care Act; this effort, which would not only have eliminated coverage for those gaining Medicaid eligibility under the Affordable Care Act but would also have ended Medicaid as we know it, collapsed in dramatic fashion in the middle of the night in late July, only to be followed by another, potentially even more destructive, run at the program that ended in September. Whether the next round comes legislatively or through a war of attrition by a president bent on bringing down the program through executive action, Medicaid's survival remains an open question. And yet, it can be said with at least a degree of confidence that Medicaid will endure, in part because of the broad base of positive public opinion on which it rests, in part because its future is so vital to states, and in part because there simply is nothing to replace it.


In their article in this issue examining the complex topic of Medicaid and payment reform, Milwee, Quinn, and Goldfield rightly look to structural changes in how Medicaid pays for care as a key element of the program's future. No payers work harder to implement transformative measures to improve health care quality and efficiency than the state's Medicaid programs, charged as they are with managing the nation's largest insurer and single largest source of state health care spending. To be sure, some states are pressing for changes that would reduce Medicaid's footprint by eliminating people and services. But thankfully, these states remain in the minority. A far larger number of states have embraced the national goal-formally declared in the Affordable Care Act-of making Medicaid the insurer for all poor Americans. Despite their ongoing struggles to sustain the program, these states view Medicaid as integral to the future of their health care systems; in so doing, they also have made a strong commitment to delivery and payment reform. It is to this larger group of states that this article truly speaks; these are the states that will become the testing ground for the reforms the authors envision and that will help Medicaid carry on its multiple missions for decades to come.




Medicaid and CHIP Payment and Access Commission. (2017). MACStats: Medicaid and CHIP data book. Retrieved January 5, 2018, from [Context Link]