Chapter 2: Medicaid and CHIP in Context 2 Part I. Medicaid and CHIP: An Overview 2 Chapter 2: Medicaid and CHIP in Context The Health Insurance In This Chapter: Landscape The Health Insurance Landscape Who Are the Uninsured? Who Are the Uninsured? An estimated 5.0 million Texans, or Unemployment 19.1 percent of the state population, Poverty had no health insurance in 2014.1 Texas has the highest rate in the Health Insurance Mandate nation for people without insurance.2 Private Coverage In 2014, approximately 800,000, or Medicare 11.0 percent, of Texas children under Medicare Parts A-D age 18 had no insurance (down from 15.6 percent in 2012).3 The national State Role in Medicare average uninsured rate for children TRICARE/Veterans was 6.0 percent.4 Administration Most of the uninsured in Texas Medicaid and CHIP History are adults under age 65. Most Medicaid Enrollment Over adults over age 65 have Medicare. Time Figure 2.1 depicts the uninsured Linked to Financial Assistance population in Texas by age group in Programs 2014. Temporary Assistance for Data indicates 62 percent of Needy Families uninsured, non-retired Texans age Supplemental Security 18 and older have a job. Uninsured Income adults may work in jobs that do not De-Linking Medicaid and Financial Assistance 1 U.S. Census Bureau, 2014 American Affordable Care Act Community Survey (ACS) for Texas. History of CHIP and CHIP 2 Ibid. Perinatal 3 Ibid. 4 Ibid. Texas Health and Human Services Commission • February 2017 17 Part I. Medicaid and CHIP: An Overview 2 offer employer-sponsored coverage, disabilities that qualify them for 2 or they may not be able to afford Supplemental Security Income (SSI), the coverage offered. Unless they most of these adults are ineligible are caretakers of children eligible for Medicaid. for Medicaid, are pregnant, or have Figure 2.1: Total Uninsured Population in Texas by Age Group, CY 2014 Ages 65+ Ages 6 and Younger 1% 4% Ages 7-17 11% Ages 45-64 24% Ages 18-24 17% Ages 35-44 19% Ages 25-34 24% Source: U.S. Census Bureau. 2014 ACS for Texas. Unemployment The unemployment rate varies Since Medicaid primarily serves among regions of the state, low-income individuals, a rise in as shown in Figure 2.2. In unemployment can result in an June 2016, the Metropolitan increase in the number of people Statistical Area (MSA) with the eligible for Medicaid due to their lowest unemployment rate was income level. Austin-Round Rock, with a rate of 3.3 percent. The highest In June 2016, Texas’ seasonally unemployment rate was in the adjusted unemployment rate was McAllen-Edinburg-Mission MSA, with 4.5 percent, which was lower than a rate of 8.2 percent.5 the national rate of 4.9 percent. The percentage of working-age persons (ages 16 through 64) in Texas who had a job in June 2016 was 69 percent. 5 Texas Workforce Commission, http://www. twc.state.tx.us/ (July 2016). 18 Texas Medicaid and CHIP in Perspective • 11th Edition Chapter 2: Medicaid and CHIP in Context 2 Figure 2.2: Unemployment Rates in Selected Texas Metropolitan 2 Areas, June 2016 9.0% 8.2% 8.0% 7.0% 6.9% 6.0% 5.5% 5.2% 5.3% 5.0% 4.6% 4.0% 4.0% 4.0% 3.3% Unemployment Rate Unemployment 3.0% 2.0% 1.0% 0.0% Source: Texas Workforce Commission Poverty living at or below the FPL in 2014.6 Since Medicaid primarily serves Approximately 24.9 percent of low-income individuals, poverty Hispanics and 23.2 percent of African in the state affects the number Americans in Texas were living at or of people eligible for the Medicaid below the FPL in 2014, along with program. In 2014, about 4.5 million 9.3 percent of White Non-Hispanics. Texans (17.2 percent of the state’s Table 2.1 lists the Federal Poverty population) lived at or below Guidelines by family size for 2014- the federal poverty level (FPL), 2016. and approximately 38 percent of these were children under age 18. Approximately 24.6 percent of all Texas children under age 18 were 6 U.S. Census Bureau, 2014 ACS for Texas. Texas Health and Human Services Commission • February 2017 19 Part I. Medicaid and CHIP: An Overview 2 Table 2.1: Federal Poverty Guidelines, 2014-2016 2 Size of 2014 Annual 2015 Annual 2016 Annual Family Unit Income Income Income 1 $11,670 $11,770 $11,880 2 15,730 15,930 16,020 3 19,790 20,090 20,160 4 23,850 24,250 24,300 5 27,910 28,410 28,440 6 31,970 32,570 32,580 7 36,030 36,730 36,730 8 40,090 40,890 40,890 For each additional $4,060 $4,160 $4,160 person, add Source: U.S. Department of Health and Human Services, Health and Human Services Poverty Guidelines, 2014-2016 http://aspe.hhs.gov/poverty/ (July 2016). Note: Federal poverty guidelines are applicable to the 48 contiguous states and are effective March 1st of each year. Health Insurance of the ACA, insurance companies Mandate cannot deny coverage or charge more for those who have a pre- As required by the Affordable Care existing condition. Act (ACA), beginning in 2014, most people must have health Individual plans can be insurance that meets minimum purchased directly from insurance federal coverage standards or pay companies and insurance a tax penalty. Health benefit plans agents or brokers. The Texas provided by employers and most Department of Insurance’s website, state or federal government health www.texashealthoptions.com, is a plans satisfy the requirement. resource to help understand how to find and use health insurance. Persons who do not have access to Coverage can also be purchased employer or government-sponsored online through the federally- health coverage can buy an operated insurance marketplace at individual plan to cover themselves www.HealthCare.gov. and their families. Also as a result 20 Texas Medicaid and CHIP in Perspective • 11th Edition Chapter 2: Medicaid and CHIP in Context 2 Figure 2.3: U.S. Personal Health Care Expenditures by 2 Source of Funding, 2014 Other Private 5% Other Public 3% Out-of-Pocket 13% Private Health Insurance 39% Medicaid 17% Medicare 23% Source: Centers for Medicare & Medicaid Services (CMS) Office of the Actuary, National Health Expenditures Accounts. Private Coverage source of coverage and type of service, respectively. The limits of private insurance affect Medicaid. In 2014, 66 percent of In Texas, the proportion of the the non-elderly U.S. population population covered by employer- had private health insurance sponsored health insurance is lower coverage, most often in the form than the national average. Fifty-four 7 of employer-sponsored coverage. percent of Americans under age 65 That same year, private insurance were covered by employer-sponsored paid for 39 percent of total national health coverage in 2014, compared 8 personal health care expenditures. with 50 percent of Texans.9 In 2014, Figure 2.3 and Figure 2.4 show 16 percent of working adults age 18 national health care spending by to 64 in the U.S. were uninsured, compared with 26 percent in Texas.10 Certain working uninsured individuals 7 U.S. Census Bureau, 2014 ACS for Texas. with low incomes may turn to 8 CMS, Historical National Health Expenditures By Type of Service and 9 U.S. Census Bureau, 2014 ACS for Texas. Source of Funds. National Health Statistics Expenditures Accounts. 10 Ibid. Texas Health and Human Services Commission • February 2017 21 Part I. Medicaid and CHIP: An Overview 2 Medicaid to meet their health care or health coverage through a 2 needs or those of their dependents health insurance marketplace is not when employer-sponsored coverage, available or affordable. Figure 2.4: U.S. Personal Health Care Expenditures by Category, 2014 Home Health Nursing Home 3% 6% Prescription Drugs 12% Hospital Care 37% Other 18% Physician and Clinical Services 24% Source: CMS Office of the Actuary, National Health Statistics Expenditures Accounts. The passage of the ACA prohibited program. As of September 2016, it health plans from denying or limiting covered 57.2 million Americans.11 coverage for pre-existing conditions for children under age 19 effective Medicare Parts A-D September 23, 2010, and for adults Most Americans age 65 and over starting January 1, 2014. automatically qualify for Medicare Part A (hospital insurance for Medicare inpatient hospital services) in the same way they qualify for Social The Social Security Act of 1965 Security based on their work history created both Medicaid and Medicare. and their payroll deductions while Medicare is a federally-paid and they were working. Qualifying administered health insurance 11 CMS, “Medicare Enrollment Dashboard,” http://www.cms.hhs.gov/MedicareEnRpts/ (December 2016). 22 Texas Medicaid and CHIP in Perspective • 11th Edition Chapter 2: Medicaid and CHIP in Context 2 individuals receive Part A coverage may offer additional benefits not 2 with no premium payment, but some available in the traditional Medicare cost-sharing through coinsurance program, or charge lower premiums. and deductibles is required. People Part D, the Medicare prescription who do not qualify may purchase drug benefit, was implemented in the hospital coverage. The federal 2006. Previously, Medicare did not government finances the hospital cover any outpatient prescription insurance program primarily through drugs, except for a few drugs a payroll tax on employers and covered under Part B. For those employees. Medicare beneficiaries who qualified Medicare Part B is a voluntary for Medicaid (called dual eligibles), program covering physician and Texas and other states offered related health services.