Enrolling and Keeping Kids Enrolled Requires Investment
The state has invested significantly in Medicaid in the past few years. However, none of this investment has resulted in an increased enrollment of children. By necessity, more than 40 percent of the increased funding was needed to replace lost federal funding (see Chart 2). However, appropriations have also been targeted for specific initiatives that did affect enrollment trends. Such initiatives included changes in outreach programs (with the intention of increasing enrollment) and in certification procedures (with the intention of decreasing enrollment). The Legislature could change this by using its appropriation process to explicitly fund increased children’s enrollment by tying it to enrollment targets or implementation of policies that will help enroll new children and retain currently enrolled children.
In the past, increased enrollment has sometimes been funded after the fact through supplemental appropriations. This has been due to either the rationale of “enroll first and then ask for funding” or because of an understandable skepticism by lawmakers regarding enrollment targets that have frequently not been met (see Chart 3).
The Human Services Department has recently implemented procedures that have been shown in other states to increase retention and continuous coverage of children on Medicaid. The Department also proposes to increase outreach efforts to enroll more children. These proactive approaches should be supported with the funding upfront to achieve the goal of increased enrollment.
HSD has estimated that 48,000 children are eligible for Medicaid but not enrolled. The Department estimates it would cost $44 million in state General Fund revenue to enroll these children. At the current federal match rate, this $44 million investment would generate $107 million in federal funds.8
That means for every child the state covers, three children would be covered by the federal government. The primary benefit of enrolling all eligible children is having healthier children who are ready to learn and succeed, but a secondary benefit is the additional economic activity generated by the increased federal matching dollars. A 2003 study estimated that for every state dollar spent on Medicaid in 2002, $5.68 was seen in increased economic activity.9 This was generated both by the large amount of federal matching dollars but also through additional economic activity from increased health care spending and wages earned. This study and the recent Mathematica study show that an investment in enrolling all eligible children in Medicaid is also an investment in the state’s overall economy and its health care system, especially in rural areas.10
Any plan to insure all New Mexicans must be backed by funding increases for Medicaid, which ensure that all eligible children will be enrolled and retained within the next few years. Increased enrollment and retention can only be a “win-win-win” for New Mexico: healthier children, a more robust health-care system, and a stronger New Mexico overall.
1 Human Services Department, FY09 Budget Request: Presentation to Legislative Finance Committee; December 4, 2007; p. 24
2 Human Services Department, Monthly All Children Eligibility Reports, 2003 through 2008
3 Mathematica Policy Research Inc.; Quantitative and Comparative Analysis of Reform Options for Extending Health Care Coverage in New Mexico; Final Report; July 31, 2007; p. 36.
4 Mathematica, pp. 31 and 38.
5 Olson, Lynn M.; Tang, Suk-fong S.; and Newacheck, Paul W.; “Children in the United States with Discontinuous Health Insurance Coverage,” New England Journal of Medicine, 2005; 353: 382-91.
6 KaiserEdu.org, Children’s Coverage and SCHIP Reauthorization; retrieved January 3, 2008 from http://www.kaiseredu.org/topics_im.asp?id=704&imID=1&parentID=65.
7 Health Solutions FAQ, October 2007.
8 Human Services Department, FY09 Budget Request: Presentation to Legislative Finance Committee; December 4, 2007; p. 24. Federal match calculated using estimated FY09 FMAP from Human Services Budget projections presented to the Medicaid Advisory Committee in November 2007.
9 At the time of the study, the federal match that New Mexico received for Medicaid was higher than it is currently. The current multiplier may be slightly lower but both state and federal Medicaid spending have important impacts within the health care system and therefore the state economy overall. New Mexico Voices for Children; Policy Brief #9: The Impact of Medicaid on New Mexico’s Economy; Spring 2003.
10 New Mexico Voices for Children; Policy Brief #9: The Impact of Medicaid on New Mexico’s Economy; Spring 2003. Mathematica, pp. 87-113 and Appendix G. See also New Mexico First, The Management and Future of Federal Investment in New Mexico: Report of the Thirty-Third New Mexico First Town Hall; April 28-30, 2005; Albuquerque, NM.