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Medicaid Spending Growth in the Great Recession and Its Aftermath, FY 2007-2012

Appendix A: Additional Tables

Table A1: National Economic Data 2007-2012
  2007 2008 2009 2010 2011 2012
GDP1
in billions $14,480 $14,720 $14,418 $14,958 $15,534 $16,245
% change 8.2% 1.7% -2.1% 3.7% 3.8% 4.6%
Unemployment Rate2 4.6% 5.8% 9.3% 9.6% 8.9% 8.1%
Income (in 2012 dollars)3
Real Median Household $55,627 $53,644 $53,285 $51,893 $51,100 $51,017
Real Per Capita4 $29,682 $28,755 $28,400 $27,968 $28,130 $28,281
SOURCES:
1. Bureau of Economic Analysis: National Economic Accounts.  U.S. Department of Commerce. http://www.bea.gov
2. Bureau of Labor Statistics: Current Population Survey: Labor Force Statistics.  U.S. Department of Labor. http://www.bls.gov/data
3. Income measurements are from U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplements.
4. The per capita income data presented are not directly comparable with estimates of personal per capita income prepared by the Bureau of Economic Analysis, U.S. Department of Commerce. The lack of correspondence stems from the differences in income definition and coverage. For further details, see http://www.census.gov/hhes/www/income/compare1.html
Table A2: Monthly Medicaid Enrollment, FY 2007-2012
Population Enrollment (in millions) Average Annual Growth Rate
June 2007 June 2008 June
2009
June 2010 June 2011 June 2012 2007-
2008
2008-
2009
2009-
2010
2010-
2011
2011-
2012
2007-2012
Total 42.3 43.6 47.0 50.4 52.8 54.1 3.1% 7.8% 7.2% 4.7% 2.5% 5.1%
Aged & Disabled 12.2 12.6 13.0 13.5 14.0 14.4 2.7% 3.5% 3.6% 4.0% 3.1% 3.4%
Families1 30.1 31.1 34.0 36.9 38.8 39.7 3.3% 9.5% 8.5% 5.0% 2.3% 5.7%
SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute estimates based on KCMU Medicaid enrollment data collected by Health Management Associates. Aged and disabled and total enrollment data were reported for all states and DC and were used to calculate family enrollment figures for all states.
1. The term “families” is used to refer to non-disabled children and adults.
Table A3: Average Annual Growth in Federal and State Expenditures Per Enrollee, FY 2007 – 2012
Service Category 2007-
2008
2008-
2009
2009-
2010
2010-
2011
2011-
2012
2007-2012
Medical Services, Total (Federal and State Totals) 2.7% 3.1% 0.9% 2.2% -2.2% 1.3%
Medical Services, Federal Total (Includes ARRA beginning in FY 2009) 2.8% 20.6% 3.4% -4.3% -12.1% 1.5%
Medical Services, Federal Non-ARRA Total1 2.8% 3.3% 1.5% 1.9% -2.1% 1.4%
Medical Services, Federal ARRA Total N/A N/A 14.8% -36.6% -97.6% N/A
Medical Services, State Total 2.6% -20.3% -3.9% 16.2% 15.3% 1.0%
SOURCE: Urban Institute estimates based on data from Medicaid Financial Management Reports (HCFA/CMS Form 64), Medicaid Statistical Information System (MSIS), and KCMU/HMA enrollment data. Expenditures reflect nominal spending and exclude payments made under CHIP, Medicare premiums paid by Medicaid for persons eligible for both programs, Disproportionate Share Hospital (DSH) payments, administrative costs, and accounting adjustments. FY 2009 Medicaid Statistical Information System data was used for the proportion of each service category that is represented by the aged/disabled or families. To the extent that FYs 2010-2012 include actual new expenditures rather than just new categories that reflect further detail of already existing expenditures, FY 2010-2012 services could differ from the services included in the MSIS proportions.
1. Federal Medicaid Component [Federal Total Excluding ARRA] beginning in FY 2009; Federal Total for FY 2007-2008)
Table A4: Average Annual Growth in Spending Per Enrollee by Type of Service, FY 2007 – 2012
Service Category 2007-2008 2008-2009 2009-2010 2010 – 2011 2011-2012 2007-2012
Medical Services 2.7% 3.1% 0.9% 2.2% -2.2% 1.3%
Acute Care 2.8% 3.5% 3.2% 4.3% -1.7% 2.4%
Hospitals & Physicians -2.4% 2.7% -2.5% 6.4% -10.6% -1.5%
Medicaid Managed Care 12.0% 6.9% 5.4% 7.5% 12.4% 8.8%
Other Acute Care1 0.3% 0.1% 18.9% -1.8% 0.8% 3.4%
Prescription Drugs -1.2% -2.7% -4.4% -11.3% -43.2% -14.3%
Long-Term Care 2.6% 2.6% -3.1% -2.0% -3.2% -0.7%
Institutional Long-Term Care 0.0% -0.4% -5.8% -1.8% -3.9% -2.4%
Home Health/Personal Care2 6.3% 6.8% 0.3% -2.3% -2.5% 1.6%
SOURCE: Urban Institute estimates based on data from Medicaid Financial Management Reports (HCFA/CMS Form 64), Medicaid Statistical Information System (MSIS), and KCMU/HMA enrollment data. Expenditures reflect nominal spending and exclude payments made under CHIP, Medicare premiums paid by Medicaid for persons eligible for both programs, Disproportionate Share Hospital (DSH) payments, administrative costs, and accounting adjustments. FY 2009 Medicaid Statistical Information System data was used for the proportion of each service category that is represented by the aged/disabled or families. To the extent that FY 2010, FY 2011, and FY 2012 include actual new expenditures rather than just new categories that reflect further detail of already existing expenditures, FY 2010, FY 2011, and FY 2012 services could differ from the services included in the MSIS proportions.
1. Includes dental, other practitioners, abortion, sterilization, PACE programs, emergency services for undocumented aliens, and other care services. Other care services could not be calculated separately from other acute care services due to data limitations.2. Includes home health services, home- and community-based waiver services, personal care, and related services.
Table A5: Average Annual Changes in Enrollment and Medicaid Expenditures on Medical Services by Eligibility Group, FY 2007 – 2012
Population Enrollment (in millions)   Spending Per Enrollee   Total Spending
(in billions)
CPI-U Medical Care
2007-2008 2007 2008 Percent Change   2007 2008 Percent Change   2007 2008 Percent Change 2007-2008
Aged & Disabled 12.2 12.6 2.7% $15,873 $16,312 2.8% $194 $205 5.5%
Families1 30.1 31.1 3.3% $3,280 $3,449 5.2% $99 $107 8.7%
All Enrollees 42.3 43.6 3.1% $6,920 $7,151 3.3% $293 $312 6.6% 3.7%
                         
2008-2009 2008 2009 Percent Change   2008 2009 Percent Change   2008 2009 Percent Change 2008 – 2009
Aged & Disabled 12.6 13.0 3.5% $16,312 $16,810 3.1% $205 $218 6.7%
Families 31.1 34.0 9.5% $3,449 $3,590 4.1% $107 $122 14.0%
All Enrollees 43.6 47.0 7.8% $7,151 $7,244 1.3% $312 $341 9.2% 3.2%
                         
2009-2010 2009 2010 Percent Change   2009 2010 Percent Change   2009 2010 Percent Change 2009 – 2010
Aged & Disabled 13.0 13.5 3.6% $16,810 $16,884 0.4% $218 $227 4.0%
Families 34.0 36.9 8.5% $3,590 $3,716 3.5% $122 $137 12.4%
All Enrollees 47.0 50.4 7.2% $7,244 $7,233 -0.1% $341 $364 7.0% 3.4%
                         
2010-2011 2010 2011 Percent Change   2010 2011 Percent Change   2010 2011 Percent Change 2010 – 2011
Aged & Disabled 13.5 14.0 4.0% $16,884 $16,966 0.5% $227 $237 4.5%
Families 36.9 38.8 5.0% $3,716 $3,887 4.6% $137 $151 9.8%
All Enrollees 50.4 52.8 4.7% $7,233 $7,355 1.7% $364 $388 6.5% 3.0%
                         
2011-2012 2011 2012 Percent Change   2011 2012 Percent Change   2011 2012 Percent Change 2011 – 2012
Aged & Disabled 14.0 14.4 3.1% $16,966 $16,318 -3.8% $237 $235 -0.9%
Families 38.8 39.7 2.3% $3,887 $3,897 0.3% $151 $155 2.6%
All Enrollees 52.8 54.1 2.5% $7,355 $7,208 -2.0% $388 $390 0.5% 3.7%
SOURCE: Urban Institute estimates based on data from Medicaid Financial Management Reports (HCFA/CMS Form 64), Medicaid Statistical Information System (MSIS), and KCMU/HMA enrollment data. Expenditures reflect nominal spending and exclude payments made under CHIP, Medicare premiums paid by Medicaid for persons eligible for both programs, Disproportionate Share Hospital (DSH) payments, administrative costs, and accounting adjustments. Total spending levels and growth rates differ from those presented in previous tables because the data source and method used to calculate total spending are different.  Total spending reflects sums of spending by eligibility group which is calculated by taking the 2007 MSIS spending level for each eligibility group and applying the corresponding growth rates. FY 2009 Medicaid Statistical Information System data was used for the proportion of total spending for an eligibility group that is represented by a particular service. This method is described in more detail in Appendix B. Growth rates for CPI-U Medical Care come from the Bureau of Labor Statistics, Consumer Price Index Detail Report Tables, Annual Average Indexes 2007 – 2012, Table 1A. Consumer Price Index for All Urban Consumers (CPI-U): U.S. city average, by expenditure category and commodity and service group (1982-84=100, unless otherwise noted), http://www.bls.gov/cpi/cpi_dr.htm.1. The term “families” is used to refer to non-disabled children and adults.
Table A6: Average Annual Growth in Medicaid Expenditures and in Selected Benchmarks
  Average Annual Growth Rates
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2007-2012
Medicaid Expenditures for Medical Services 5.7% 8.9% 6.3% 6.6% 0.5% 5.6%
Medicaid Expenditures per Enrollee
Medical Services 2.7% 3.1% 0.9% 2.2% -2.2% 1.3%
Acute Care (Including Prescription Drugs) 2.8% 3.5% 3.2% 4.3% -1.7% 2.4%
Long Term Care 2.6% 2.6% -3.1% -2.0% -3.2% -0.7%
CPI- Medical Care 3.7% 3.2% 3.4% 3.0% 3.7% 3.4%
National Health Expenditures 4.7% 3.8% 3.8% 3.6% 3.7% 3.9%
NHE per Capita 3.8% 2.9% 2.9% 2.9% 3.0% 3.1%
Gross Domestic Product 1.7% -2.1% 3.7% 3.8% 4.6% 2.3%
GDP per Capita 0.7% -2.9% 2.9% 3.1% 3.7% 0.8%
SOURCE: Urban Institute estimates based on data from Medicaid Financial Management Reports (HCFA/CMS Form 64), Medicaid Statistical Information System (MSIS), and KCMU/HMA enrollment data. Growth rates for CPI-U Medical Care come from the Bureau of Labor Statistics, Consumer Price Index Detail Report Tables, Annual Average Indexes 2007 – 2012, Table 1A. Consumer Price Index for All Urban Consumers (CPI-U): U.S. city average, by expenditure category and commodity and service group (1982-84=100, unless otherwise noted), http://www.bls.gov/cpi/cpi_dr.htm.  National Health Expenditure growth rates come from the CMS Natinal Health Expenditure Accounts, http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical.html.  GDP growth rates come from the Bureau of Economic Analysis, http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=3&isuri=1&910=x&911=0&903=5&904=2007&905=2013&906=a.

Appendix B: Methodology

No existing single data source includes all of the data needed for an analysis of spending growth through 2012.  We used data from two different sources on recent Medicaid spending and recent enrollment, respectively, and we used a third data set to make estimates of spending growth per enrollee.

The main source for spending data is the Medicaid Financial Management Reports (Form 64) from the Center for Medicare and Medicaid Services (CMS) for fiscal years 2007 through 2012. These data are available by state and spending category.  However, the CMS-64 does not report enrollment or spending by eligibility group.

Data on enrollment are from a survey of all 50 states and the District of Columbia conducted by Health Management Associates (HMA) for the Kaiser Commission on Medicaid and the Uninsured (KCMU). These data provide point in time enrollment for June of each year. Aged and individuals with disabilities; child, parent, and other non-aged, non-disabled adult enrollment (throughout the report referred to simply as “family enrollment”); and total enrollment data were reported for all states and the District of Columbia.

Accurately estimating per enrollee spending growth rates requires data that can link spending to enrollment groups.  This is because simply dividing the total change in spending by the total change in enrollment would bias the estimate of the growth in spending per enrollee.  Overall, for the time period of this analysis, spending would be biased downward because of the faster enrollment among less expensive family beneficiaries relative to the aged and disabled.  This bias could be even more pronounced among subsets of services.  For example, since families account for only a small share of long-term care spending, enrollment growth among families is not likely to affect long-term care spending.

Unfortunately, the CMS-64 does not enable us to stratify Medicaid spending growth for families versus the aged/disabled because CMS-64 data do not associate spending with eligibility groups.  Therefore, the analysis presented in this paper draws on a third data source, the Medicaid Statistical Information System (MSIS), to estimate spending per enrollee growth by eligibility group.  MSIS provides detailed individual-level spending and enrollment data stratified by service type and eligibility group, but it is not available for the more recent years in this analysis.  We use the 2009 MSIS, as well as the 2007 MSIS, the year corresponding with the start of the time period in this analysis.

The MSIS is incorporated into the per enrollee estimates in two ways.  First, we use the 2009 MSIS data to estimate annual spending per enrollee growth by service in a way that accounts for differences in service use across eligibility groups.  To do this, we use MSIS to calculate service-specific annual enrollment growth rates by obtaining service-specific weights for families versus the aged and disabled beneficiaries.  These weights are equal to the share of Medicaid spending for each service that each eligibility group generates using the 2009 MSIS.  Then, for each service category, we calculate a weighted average of the enrollment growth for the two eligibility groups.  For example, the 2009 MSIS indicates that families account for 48 percent of spending on hospitals and physicians, while the aged and disabled beneficiaries account for 52 percent.  Thus, we calculate the hospital and physician-specific enrollment growth by weighting the family enrollment growth by 0.48 and enrollment growth for the aged and disabled beneficiaries by 0.52.  Finally, we divide the annual spending growth for each service by the weighted annual enrollment growth for each service to calculate the annual spending per enrollee growth for each service (see Box B-1).

Box B-1: Calculating Annual Spending Per Enrollee Growth by Service

Box B-1: Calculating Annual Spending Per Enrollee Growth by Service

Second, we used MSIS data to estimate annual spending per enrollee growth by eligibility group in a way that similarly accounts for differences in service use across eligibility groups.  This analysis enables us to deconstruct total spending growth from year to year into increases in enrollment and increases in spending per enrollee by eligibility group. First, we use the 2007 MSIS to establish baseline spending by eligibility group. Then, to calculate the annual spending per enrollee growth by eligibility group, we weight the annual growth in spending per enrollee for each service by the importance of that service to the specific eligibility group and then aggregate across all services (step 1 in Box B-2).  For each eligibility group, we then multiply the annual spending per enrollee growth estimate times the annual enrollment growth.  This gives us the annual spending growth rate for each eligibility group (step 2 in Box B-2).  Finally, we apply these rates to baseline spending by eligibility group calculated using 2007 MSIS data (step 3 in Box B-2).  The spending totals and rates of growth calculated using this method are shown in Table 6 and differ from the spending growth in Figure 2 and Table 3 because the data source and method used to calculate total spending are different.  Total spending in Table 6 reflects sums of spending by eligibility group calculated by taking the 2007 MSIS spending level for each eligibility group and applying the corresponding growth rates calculated using data from Medicaid Financial Management Reports (HCFA/CMS Form 64), Medicaid Statistical Information System (MSIS), and KCMU/HMA enrollment data.

Box B-2: Calculating Annual Spending Per Enrollee by Eligibility Group

Box B-2: Calculating Annual Spending Per Enrollee by Eligibility Group

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