The Medicaid Commission

Executive Summary

Medicaid Commission's Sept. 2005 report of recommendations for achieving $11 billion in savings  over 5 years.

Purpose of the Commission
The Medicaid Commission was established by charter by the Honorable Michael O. Leavitt, Secretary of the United States Department of Health and Human Services, in May 2005. The commission charge is defined as follows:
  1. The Commission shall report to the Secretary, for his consideration and submission to Congress, by September 1, 2005, their recommendations on options to achieve $10 billion in scorable Medicaid savings over 5 years while at the same time make progress toward meaningful longer-term program changes to better serve beneficiaries.
  2. By December 31, 2006, the Commission shall submit to the Secretary a report making longer-term recommendations on the future of the Medicaid program that ensure the long-term sustainability of the program. They shall develop proposals that address the following issues:
    1. Eligibility, benefits design, and delivery
    2. Expanding the number of people covered with quality care while recognizing budget constraints;
    3. Long term care;
    4. Quality of care, choice and beneficiary satisfaction;
    5. Program administration; and
    6. Other topics that the Secretary may submit to the Commission.

The Medicaid Program Today

Medicaid is a program that pays for medical assistance for certain individuals and families with low incomes and resources. The program became law in 1965 and is jointly funded by the Federal and state governments (including the District of Columbia and the Territories) to assist states in providing medical acute and long-term care assistance to people who meet certain eligibility criteria. Medicaid is the largest source of funding for medical and health-related services for people with limited income.
The portion of the Medicaid program that is paid by the Federal government, known as the Federal Medical Assistance Percentage (FMAP), is determined annually for each state by a formula that compares the state's average per capita income level with the national average. By law, the FMAP cannot be lower than 50 percent or greater than 83 percent. The wealthier states, as measured by per capita income, have a smaller share of their costs reimbursed. The Federal government also shares in the state's expenditures for administration of the Medicaid program at generally 50 percent. Due to the entitlement nature of Medicaid, the amount of total federal outlays for Medicaid has no statutory limit.

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