Thursday, July 3, 2008

Higher Cig Taxes to Fund Massachusetts Plan 

By Marc Kilmer

Categories:  Massachusetts

Massachusetts Governor Deval Patrick recently signed a cigarette tax hike into law to pay for the higher-than-expected cost of the Massachusetts health plan.

One supporter of the law welcomed its enactment by claiming:

"Increasing the tobacco tax is one of the most effective tobacco control strategies with the impact on our youth undeniable," said Marc Hymovitz, spokesman for the American Cancer Society. "The effect of this tax increase will be an estimated 25,000 smokers quitting and 46,000 youth never starting to smoke."

But, wait -- I thought this was supposed to be helping pay for health care. How can it do that if fewer people smoke? It seems that state legislators never learn that paying for a program that has increasing costs with a revenue source that decreases every year makes little fiscal sense.

• posted by Marc Kilmer
• 2:44 pm
• 0 comment

Wednesday, July 2, 2008

Invading Privacy to "Protect Children"? 

By Marc Kilmer

Categories:  Maryland, Medicaid

The Annapolis Capital had this intersting headline this week: "Protecting Children Aim of New State Laws." One state law, prohibiting anyone from selling products with unsafe levels of lead (isn't that already illegal?), falls under that category. However, the other state laws discussed in the article concern Medicaid expansion and the government using tax returns to sniff out those who are eligible for Medicaid but don't use it. It seems to me that the expansion of the nanny state and the invasion of taxpayers' privacy can hardly be considered "protecting children." But maybe that's why I'm not in the newspaper business.

• posted by Marc Kilmer
• 4:41 pm
• 0 comment

Wednesday, July 2, 2008

North Carolina Increasing Cost of Health Insurance 

Mental health parity law goes into effect

By Marc Kilmer

Categories:  North Carolina

With all the fury being expended over the rising cost of health insurance and health care, you would think that politicians would refrain from taking steps to raise the cost of health insurance. Of course, pandering for votes doesn't take a back seat to anything. The latest case in point: North Carolina's mental health parity law, which went into effect on July 1.

The Buckeye Institute came to the following conclusion in a report from a few years ago regarding Ohio's mental health parity law:

Mental health parity legislation in Ohio would likely raise premium costs for employers and employees.

The actual beneficiaries from mental health parity legislation would probably be a small group of high-cost users. According to most studies of who uses mental health care, these users would likely be educated, high-income, middle-aged, white, and female.

• posted by Marc Kilmer
• 1:26 pm
• 0 comment

Tuesday, July 1, 2008

NJ Embraces "Universal Coverage" 

Insuring children mandated by state

By Marc Kilmer

Categories:  Medicaid, New Jersey

New Jersey is the latest state to jump on the universal care bandwagon:

The fundamental aspect of the plan is the expansion of the state's HMO-style health care program FamilyCare to include parents earning up tp twice the poverty level, or about $42,000 a year for a family of four. The legislation also mandates coverage for all children through privately paid or public programs such as FamilyCare within one year of enactment.

Within three years the plan is expected to cost $68 million a year. Anyone want to take bets on how low this figure will prove to be? The fact that this program will cost much more than anticipated is illustrated by the shaky grasp of health care economics demonstrated by the bill's sponsor:

With roughly 96 percent of charity care funds — state aid given to hospitals for uninsured patients — covering parents who would be covered under the FamilyCare's expansion, Vitale said the cost of the program will be offset by a reduction in state money to this fund by eliminating unnecessary emergency room visits.

As Linda Gorman points out, the uninsured aren't really to blame for high emergency room usage. In fact, those on public programs (like the one being expanded in New Jersey) are over-represented in emergency room usage. It stands to figure that emergency room usage may actually go up due to this law, not down, and the savings imagined by Mr. Vitale will not materialize. 

At least some in the state understand the dangers of such a system:

"We've made health insurance unaffordable for families because of an over-regulated market," said Assemblyman Jay Webber, R-Morris, who said choice in the private market should be expanded. "The cure is not to expand government; that's the cause of problems."

• posted by Marc Kilmer
• 11:25 am
• 0 comment

Tuesday, July 1, 2008

Massachusetts Plan Facing Problems 

USA Today latest to report on the issue

By Marc Kilmer

Categories:  Massachusetts

With the news coverage over the first anniversary of the Massachusetts Plan, the fact that cost overruns are a huge problem for it is receiving a lot of play. USA Today is the latest newspaper to focus on this issue:

Most of the newly insured are lower income residents who qualify for low- or no-cost coverage through the state and there were more uninsured than the state anticipated. Both factors pushed costs to $625 million the first year, up from estimates of $472 million, according to figures from the state agency overseeing the program.

States like Ohio continue to look to Massachusetts as a model of success. Since most of the newly-insured are those who have signed up for either government care or subsidized insurance, I'm not sure why this is noteworthy. It's pretty much Econ 101 that if you offer people something that is either free or subsidized, a large number will take it. It seems to me the only lesson of this plan is that the taxpayers of those states looking to imitate Massachusetts had better watch their wallets.

• posted by Marc Kilmer
• 9:39 am
• 0 comment

Thursday, June 26, 2008

DC Sues Insurance Company 

Legitimate lawsuit or extortion attempt?

By Marc Kilmer

As I wrote about here, the District of Columbia's "universal health care" plan is on the rocks due to CareFirst BlueCross BlueShield, the largest health insurance provider in the area, balking at providing funding for it. Now it appears that DC is using its power to punish this company for refusing to go along with its wishes:

The District government hit the region's largest health insurance provider on two fronts yesterday, launching a subpoena-powered investigation and a lawsuit that asserts the nonprofit organization is obligated to donate millions to the community.

I wonder if this two-prong attack would have happened if CareFirst had ponied up the $5 million desired by the DC government to fund its health care program. While there may be merits to this case (it's unclear given the media reports), it certainly seems like an attack motivated by government officials' anger over the insurance company's refusal to bow to their wishes.

• posted by Marc Kilmer
• 5:48 pm
• 0 comment

Thursday, June 26, 2008

Mayors Push Single-Payer 

By Marc Kilmer

Categories:  Maryland, Single-Payer Follies

Looks like the mayors want single-payer:

Baltimore Mayor Sheila Dixon is one of seven U.S. mayors to craft a bill supporting single-payer national health insurance, a proposal being pushed by the U.S. Conference of Mayors.

The resolution has been formally adopted by the U.S. Conference of Mayors, a national organization representing cities of more than 30,000, and is making its way through the U.S. Congress.

With all the problems facing Batimore (and, I assume, other cities nation-wide), I'm unsure why Mayor Dixon is wasting her time promoting single-payer. If she's interested in the flaws of such a system, she may want to read a recent report from the Maryland Public Policy Institute.

• posted by Marc Kilmer
• 4:01 pm
• 0 comment

Friday, June 20, 2008

Medicaid Spending Skyrocketing 

States still looking to spend more

By Marc Kilmer

Categories:  Medicaid

Those of us who study Medicaid spending know that it has a tendency to grow pretty quickly, especially during an economic downturn. As if we needed more proof of that, the Kaiser Daily Health Briefing notes a new study has been published showing that Medicaid is growing faster than other areas of state spending: 

The survey found that Medicaid spending accounts for 21.1% of state spending, making it "the single largest portion of total state spending." Medicaid spending in FY 2009 is expected to grow by 4.4%. Scott Pattison, executive director of the state budget officers association, said that Medicaid spending in recent years has grown at a faster rate than the general funds. Spending for the program in FY 2008 grew 6.3%. Pattison said, "There has to be an expansion of revenue in terms of either tax increases, which tend to be politically rare, or further disproportionate cuts outside of K-12 (education) and Medicaid".

But states aren't letting little fiscal responsibility get in the way of more government spending on health care:

The survey also found that despite the economic downturn, states and governors are still working to overhaul state health care systems. The report states, "It is clear that covering the uninsured is a high priority across many state governments, and many of the proposals have come from governors of both parties." About two-thirds of all states have proposed measures to their budgets to expand coverage, 18 of which already have enacted or implemented the measures, and 26 that have introduced proposals in their FY 2009 budgets.

When Maryland legislators were considering expanding the state's Medicaid program during a special session called to address the budget deficit, I explained why increasing spending on this program, especially in light of a deficit, is a plan for fiscal disaster. My views fell on deaf ears. It sounds like other states' legislators have ignored fiscal reality, too.

• posted by Marc Kilmer
• 4:21 pm
• 2 comments

Wednesday, June 18, 2008

Income Verification for NJ Medicaid 

Assembly passes measure designed to combat fraud

By Marc Kilmer

Categories:  Medicaid, New Jersey

As I blogged about earlier this month, New Jersey lawmakers were considering imposing income verification requirements for Medicaid recipients. Both houses of the legislature have recently passed a bill mandating this and now that legislation awaits the governor's signature.

The legislation mandates that recipients submit income information like pay stubs and that the state must take steps to verify this information. This move towards income verification was undertaken in response to a report that there were people using the program who had incomes exceeding the state's eligibility limits.

I am a little surprised that income verification wasn't part of the process to sign up for Medicaid before this. It seems like common sense to make sure that people who are in the program are actually eligible for it. Better late than never for the taxpayers of New Jersey, I guess.

• posted by Marc Kilmer
• 12:04 pm
• 1 comment

Monday, June 9, 2008

Small Steps in the Right Direction for NJ 

Co-payments, income verification being considered

By Marc Kilmer

Categories:  Medicaid, New Jersey

In response to a state audit that found that the state Medicaid system was paying for medical care for people who earned almost $300,000 a year, the legislature is considering legislation to verify recipients' income.

The governor is also pushing for small co-payments for some Medicaid recipients, although that proposal is likely to be killed.

While these types of proposals are merely tinkering around the edges of a dysfunctional Medicaid system, they are commendable proposals. Ensuring income fraud does not exist and making recipients pay a small portion of their own medical expenses should be present in every Medicaid program.

• posted by Marc Kilmer
• 4:37 pm
• 0 comment