Do states adjust Medicaid enrollment in response to capitation rates?: evidence from the Medicare Part D clawback

Do states adjust Medicaid enrollment in response to capitation rates?: evidence from the Medicare Part D clawback

Collection:
Health Policy and Services Research
Series Title(s):
Center for Retirement Research working paper
Author(s):
Quinby, Laura D., author
Wettstein, Gal, author
Contributor(s):
Boston College. Center for Retirement Research, issuing body.
Publication:
Chestnut Hill, MA : Center for Retirement Research at Boston College, June 2019
Language(s):
English
Format:
Text
Subject(s):
Capitation Fee
Dual MEDICAID MEDICARE Eligibility
Medicaid -- economics
Medicare -- economics
Medicare Part D -- economics
United States
Genre(s):
Technical Report
Abstract:
To curb rising Medicaid costs at the federal level, a number of recent policy proposals suggest capitation financing, under which program costs are fixed per beneficiary. This study examines to what extent more generous capitated federal subsidies would likely cause states to increase Medicaid enrollment. To answer this question, the analysis identifies a component of Medicaid that currently relies on capitation financing--the clawback provision in Medicare Part D – and uses that provision to estimate state responses to capitation rates. Specifically, the clawback requires states to pay the federal government a lump sum for each Medicaid enrollee who is also eligible for Medicare (dual-eligible). The size of the lump sum varies across states, based on a historical artifact: state-level prescription drug spending for dual-eligibles in 2003. Thus, the price of enrollment in any year after 2006, when Part D went into effect, is exogenous conditional on the 2003 price. The analysis shows that this within-state rigidity in the clawback formula creates substantial transfers between the federal government and the states, as well as among the states. It further finds that increasing clawback payments per dual-eligible by $100 would lead to a 2-percentage-point decrease in the share of dual-eligibles enrolled in Medicaid.
Copyright:
Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY license. (More information)
Extent:
1 online resource (1 PDF file (32 pages))
Illustrations:
Illustrations
NLM Unique ID:
101761850 (See catalog record)
Permanent Link:
http://resource.nlm.nih.gov/101761850