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New Mathematica Report Finds Medicaid Buy-In Enrollees May Offer Savings to States
Contact: Cheryl Pedersen, (609) 275-2258
WASHINGTON, DC (October 30, 2009)—A new report from Mathematica provides the most comprehensive information to date on patterns of Medicaid and Medicare spending and service use among Medicaid Buy-In participants. Researchers found that combined inflation-adjusted Medicaid and Medicare expenditures for Buy-In participants more than doubled from $887 million to $1.9 billion between 2002 and 2005, as did program enrollment. However, they also found that, when compared with other working-age disabled Medicaid enrollees, Buy-In participants in 2005 incurred lower annual Medicaid expenditures. This difference suggests that Buy-In participants who are working may require fewer services or a less expensive mix of services than other disabled Medicaid enrollees.
More than 200,000 people with disabilities enrolled in the Medicaid Buy-In program between 1997 and 2007. When workers with disabilities “buy into” Medicaid by paying monthly premiums or co-payments, states can offer them Medicaid coverage when their income and assets would otherwise make them ineligible. Most Buy-In participants also receive Medicare coverage if they are eligible for Social Security Disability Insurance payments.
Although total Medicaid expenditures rose as enrollment increased between 2002 and 2005, the average monthly Medicaid cost remained relatively stable over this period, fluctuating between $1,287 and $1,161 depending on the year. However, the average monthly Medicare cost for Buy-In enrollees rose from $493 in 2002 to $597 in 2005.
The study, which will help the Centers for Medicare & Medicaid Services and state policymakers shape programs that improve the employment and health outcomes of workers with disabilities, integrates data from a variety of federal and state sources, including Buy-In participant files provided by the states, Medicaid eligibility and claims files, Medicare claims records, and administrative data from the Social Security Administration. Additional findings from the report include:
- Prescription drugs accounted for the largest share of total Medicaid spending (36 percent, or $436 per month); more participants (91 percent) used this service than any other. Community long-term care services represented the second-largest share of spending (22 percent, or $270 per month) and were used by 15 percent of participants.
- Inpatient hospital expenditures accounted for the largest share of Medicare spending (44 percent, or $264 per month) among Buy-In participants who are dually enrolled in Medicare and Medicaid.
- Not surprisingly, Medicare expenditures increased with the age of the participant. For example, typical monthly Medicare costs for those ages 65 and older were $785, compared with costs of $378 for those 30 and younger. Medicaid expenditures showed a different pattern: Adults ages 31 to 50 had the highest level of Medicaid expenditures.
“Medicaid and Medicare expenditures will rise as enrollment in the Buy-In program continues to grow,” said Gilbert Gimm, the report’s lead author and a health researcher at Mathematica. “However, much of this spending would not represent a new burden on state Medicaid budgets because most new Buy-In participants transfer from another Medicaid eligibility category. Since Buy-In participants overall are less expensive to Medicaid than other adult enrollees with disabilities, states without a Buy-In program might want to consider starting a new one. States with a Buy-In program might consider focusing outreach efforts toward younger workers with disabilities.”
“Analysis of Medical Expenditures and Service Use of Medicaid Buy-In Participants, 2002–2005,” by Gilbert Gimm, Kristin Andrews, Jody Schimmel, Henry Ireys, and Su Liu
Executive Summary
Read more about the study.
Mathematica, a nonpartisan research firm, provides a full range of research and data collection services, including program evaluation and policy research, survey design and data collection, research methods and standards, and program management/data system support, to improve public well-being. Its clients include federal and state governments, foundations, and private-sector and international organizations. The employee-owned company, with offices in Princeton, N.J., Ann Arbor, Mich., Cambridge, Mass., Chicago, Ill., Oakland, Calif., and Washington, D.C., has conducted some of the most important studies of health care, education, family support, employment, nutrition, and early childhood policies and programs.