Maryland Medicaid History and Facts

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Initial Medicaid Implementation: Maryland initially began their Medicaid program on July 1, 1966. In the first year the state enrolled 113,000 people. When Medicaid began, it was estimated that 9.7% of the state’s population would be eligible. In the end by 1969 7.2% of the population or approximately 260,000 people signed up for Medicaid in the first years of the program. In 1967 when federal legislation created a cutoff of 150% AFDC for eligibility for federal funding, Maryland decided to reduce their eligibility levels. In 1968 the program was facing budgetary pressures and substantial portions of the payments were being made to non-welfare patients and there were costs attributed to high costs of hospitals that led the governor to reduce eligibility levels from $3,120 to $3,000 for a family of four. This cut approximately 22,000 people from the program or approximately 10% of the beneficiaries. These beneficiaries were restored eligibility within 6 months of being cut off of coverage. The hospitals continued to be paid at usual and customary levels which meant that the Medicaid program depleted their funds early in the year and hospitals experienced many unpaid bills. The state began taking additional action against finding overpayments and fraudulent charges by physicians, pharmacists, and dentists and 10 physicians were found to have made fraudulent charges and were prosecuted for the crime. It was later found that 28 physicians received a combined $800,0000 and through the convictions $68,000 were returned to the state.

Key Medicaid Political Issues: For the first nine years of the Medicaid program the state operated exclusively through a fee for service model. Then in 1975 six HMOs in the state began offering coverage for preventive services to Medicaid beneficiaries. In 1997 the state implemented the HealthChoice program, a mandatory managed care program that covered 80% of the state’s Medicaid beneficiaries. In 2006 the state began offering pharmacy and primary care services to adults earning 116 percent of the federal poverty level or below, paving the way for more enhanced benefits to the same population through Medicaid expansion. Maryland’s unique payment model for hospitals means that Medicare and private payers pay the same rate as Medicaid.

Medicaid Expansion Implementation: Maryland expanded Medicaid in January 2014 with enrollment beginning in October of 2013. Despite the fact that Maryland was one of several states that switched gubernatorial party control in 2015, no significant changes have been made to the state’s Medicaid expansion program, in part due to the Democratic control of the legislature. In 2012 the state wrote that the potential for increased economic activity resulting from the infusion of federal dollars was a main reason that they decided to expand coverage. Additionally, the state made the argument that many existing programs could be ended because they would be duplicative, therefore there was the potential of saving the state money in the short term even if the program would require the state to pay 10% of the medical costs in the long run. The state also argued that reduced uncompensated care would reduce costs for private market consumers and that expanding Medicaid would ensure that there are no gaps in coverage.

General facts about Maryland Medicaid:

Medicaid program name: Medicaid

CHIP Program name: Maryland Children’s Health Program (MCHP)

Separate or combined CHIP: Medicaid Expansion

Medicaid Enrollment: 1.3 million (2018 estimate)

Total Medicaid Spending: $11.2 billion (FY 2017 estimate)

Share of total population covered by Medicaid: 16% (estimate)

Share of Children covered by Medicaid: 30% (estimate)

Share of Medicaid that is Children and Adults: 83% (estimate)

Share of Spending on Elderly and people with disabilities: 58% (estimate)

Share of Nursing Facility Residents covered by Medicaid: 60% (estimate)

FMAP: 50%

Expansion state: Yes

Number of people in expansion: 277,000

Work Requirement: No

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