People living with disabilities or seeking long term medical treatment use more health care resources and cost Vermont’s Medicaid program more money.
VTDigger analyzed enrollment and expenditure data from the Department of Vermont Health Access and other departments within the Agency of Human Services. The results show large variation in demographic-based health care spending.
As a general rule, people who enroll in Medicaid because of a disability are more expensive to treat than low-income people who enroll in the program. And low-income children are generally cheaper to cover than low-income adults.
Additionally, people who enroll in Medicaid-funded programs as a primary source of health care coverage, such as Dr. Dynasaur, are more expensive to treat than people who enroll in supplemental programs, such as subsidies through Vermont Health Connect or a pharmacy benefits program.
The differences in treating different population groups make it difficult to determine how enrollment has increased Medicaid spending. But there are two main trends that appear to impact costs: a high number of low-income people, and a slowly increasing number of people who rely on Medicaid for treatment of long-term health problems.
For example, in fiscal year 2015, the state and federal governments spent $345.9 million to treat 71,000 low-income adults using a Medicaid program and $279.4 million to treat 66,000 low-income, underinsured or uninsured children. Those were the highest lump sums of money spent for demographic groups.
However, on a cost-per-patient basis, the numbers are different. In 2012, the cost of treating a low-income Medicaid patient was about $6,000 per year, but when Vermont expanded Medicaid under the Affordable Care Act, the per-person cost dropped to less than $5,000 per year. The cost of insuring low-income kids went up slightly — from about $3,700 to $4,200 per year.
Those numbers pale in comparison to the most expensive Medicaid population groups. In fiscal year 2012, the annual per-person cost of long-term elder care was about $50,000; the annual per-person cost of caring for blind and disabled children was about $23,000; and the annual per-person cost of treating aged, blind and disabled adults was about $11,000.
The numbers changed just three years later. By fiscal year 2015, the annual per-person cost of long-term elder care fell to about $48,000, mostly because of a higher caseload. The annual per-person cost of caring for blind and disabled children rose to about $24,000, and the annual per-person cost of treating aged, blind and disabled adults hit about $13,000.
VTDigger did not find reliable expenditure data to look at the cost of those populations in all areas of state government over a longer time period. The enrollment data over time is more reliable, and is illustrated in the following graph. There is a general upward trend in adults with disabilities and adults who are eligible for both Medicare and Medicaid.
[M]onica Hutt, the commissioner of the Department of Disabilities, Aging and Independent Living, said her department offers community-based care to many of the people in the most expensive Medicaid population groups, and her budget will go up by about 3 percent this year.
Hutt said her department keeps its rising budget under control by contracting out some services to community organizations while holding budgets “to the bone.” She defended her department’s spending because it is far less expensive than the alternative. In-home care and other supports for Vermonters with disabilities replaced nursing home placements at the Brandon Training School, which closed in the early 1990s, and cost hundreds of thousands of dollars per person.
“We have as a state an obligation to provide that care,” Hutt said. “Vermont is unique that we choose to do that primarily in community versus in institutions. Most states still have an active institutional system, and Vermont does not.”
“Anybody can be in a position at some point in time to need the kind of the care and support that is available through DAIL, so making sure that we do it well, that we provide quality, that we do it in a cost-effective way, and that we keep it in our communities is crucial,” Hutt said.
Hutt said she continues to see societal factors driving spending and enrollment in services within her department, including “a steady increase of individuals who are diagnosed with developmental disabilities” and more senior citizens receiving diagnoses for dementia-related diseases.
“People are living longer,” she said. “We are on track to be the oldest state in the nation in the next few years, so we will begin to see that the Vermont population overall has more (health needs).”
Sen. Jane Kitchel, D-Caledonia, is the chair of the Senate Appropriations Committee and a former secretary of the Agency of Human Services. She said spending for disability services goes up every year, by about $8 million to $10 million, without exception.
“If you’re talking about someone with an intellectual disability, that’s something that — it’s not episodic,” Kitchel said. “It’s a condition that’s going to persist for the rest of their lives, so it’s a cost that’s going to be in place.”
Kitchel contrasted living with an intellectual disability with getting an organ transplant, which is a severe but comparatively short-term health need. “This is really a lifetime expenditure, when you’re talking about the (disability services) caseload, for example,” she said.
“Until we can deal with, stabilize the caseload, and until we can really bring some cost under control using different payment methodologies … every year we’ll close the budget, but as long as those drivers remain in place, we’ll have another gap,” Kitchel said.
