Medicaid


Wednesday, October 8, 2008

Not Reforming Medicaid is Immoral 

By John LaPlante

Categories:  Kansas, Medicaid

Here's another reason--if you need it--why Medicaid programs and the whole way we pay for health care needs shaking up: It's driving states and out county to the poorhouse.

Matt Hisrich, senior policy fellow for the Kansas-based Flint Hills Center for Public Policy, makes this point in a recent op-ed. 

Something seems to be missing from all the bailout discussions and presidential debates. It could be called a dirty little secret, except that it is not at all little. In fact, it is so big that it has serious implications for how the federal government will be able to function in the future, and whether states such as Kansas can continue to expect federal funds to fuel their budget growth.

What’s the secret? It’s the massive debt our nation is piling up. It should call into question the wisdom of huge increases in spending, especially given that the crisis on Wall Street pales by comparison.

Fortunately, there is a new documentary hitting screens around the country that deals with exactly this topic. The film, “I.O.U.S.A.,” takes a hard look at the state of America’s finances. The documentary follows former U.S. Comptroller-General David Walker on a "Fiscal Wake-Up Tour." Walker, who is now President and CEO of the non-profit Peter G. Peterson Foundation, resigned from his General Accounting Office post in February. His goal is to devote himself to the task of educating Americans about the nature of the real economic crisis they face.

In the film, viewers learn that while national debt now accounts for 66 percent of the gross national product, this is unlikely to shrink as the baby boomers hit retirement. According to the Peterson Foundation, “10,000 baby boomers will become eligible for Social Security benefits each day for the next two decades.” As they do, the national debt will rise from 66 to 244 percent of GNP by 2040.

In fact, by 2027 federal revenues “will not even cover net interest, Social Security, Medicare and Medicaid.” The only way to fund other programs – education, national defense and homeland security, for instance – will be to borrow even more.

According to Walker, if we do not “dramatically and fundamentally reform our health care system in installments over the next 20 years,” we could face bankruptcy. “It’s the number one fiscal challenge for the federal government, it’s the number one fiscal challenge for state governments and it’s the number one competitive challenge for American business.”

Here in Kansas, that means policymakers need to reconsider their approach to Medicaid and the State Children’s Health Insurance Program, or SCHIP. The numbers of those enrolled in these programs have continued to rise in recent years, and the costs per enrollee have risen at the same time. The costs were unsustainable before the full nature of national finances were known. With full knowledge of the situation they appear completely out of control.

As a federal-state partnership, the Kansas Medicaid program is dependent on the federal government to fund the majority of its expenses. Up until now, this roughly 60/40 split has only encouraged additional spending at the state level. The federal government’s increasing inability to honor its obligations going forward, however, requires Kansas policymakers to scale back their ambitions to better reflect economic reality.

Instead of looking for ways to usher in universal coverage through state programs, it is time for officials to focus their attention on two key areas. First, they must begin the work of real reform of Medicaid that will yield a sustainable program. Second, they need to look toward market-based solutions such as expanding the use of health savings accounts as a way to address those without coverage. To do otherwise at this point is to put our future at risk.

“We are mortgaging the future of our children and grandchildren at record rates, says Walker. “That is not only an issue of fiscal irresponsibility; it’s an issue of immorality.”

Friday, October 3, 2008

The Massachusetts Plan, On Your Dime 

By Grace-Marie Turner

Categories:  Massachusetts, Medicaid

Massachusetts has won another round in its effort to get U.S. taxpayers to help fund its experiment in universal coverage.

Gov. Deval Patrick announced Tuesday that the federal government has approved an extension of its waiver, allowing the state to continue to provide Medicaid subsidies to people making as much as $63,600 a year. Federal taxpayers will be paying nearly $11 billion to help the Bay State fund its $21-billion health reform plan over the next three years.

Gov. Patrick has been boasting that 439,000 more people in the Bay State have health insurance since the reform law was passed in 2006. But at least 56% of them are getting free or heavily-subsidized coverage, jointly funded by the state and by federal matching Medicaid dollars.

The jury is still out on how the state will juggle growing opposition to the individual mandate and soaring health costs, but U.S. taxpayers apparently will continue to fund the plan to see if it works. While the federal government would have been funding part of Massachusetts’s Medicaid program in any case, the big open question is how the government can now deny similar requests from other states that want to follow suit and also increase Medicaid eligibility to 300% of poverty -- $63,600.

Before that happens, it might be wise to have a national debate on whether or not Medicaid should be the vehicle to expand taxpayer-funded health coverage to millions more middle-class Americans.

Friday, October 3, 2008

Rhode Island Health Care Proposal: Welfare Reform is the Model 

By John LaPlante

Categories:  Medicaid, Rhode Island

The Ocean State Policy Research Institute, a research organization in Rhode Island, weighs in on a plan by Gov. Carceiri's Medicaid proposal, which requires federal approval.

The proposal, it says, is being portrayed nationally as a "gloom and doom scenario," but the institute advises readers to consider that Medicaid in Rhode Island has grown substantially in both size (number of people) and scope (of services), and that "RITEcare is actually a better coverage than Blue Cross and United Healthcare that you and I (working stiffs) can purchase."

In an earlier comment on its blog, the institute compares the global waiver proposal with the welfare reform proposals offered by then-Gov. Tommy Thompson, of Wisconsin. Welfare reform "works because it brings local control and scrutiny over the implementation of the program rather than it being run by bureaucrats in DC. The global Medicaid waiver will provide the same freedoms for the implementation of healthcare here in RI."

The Providence Journal, meanwhile, calls it an "unprecedented attempt to transform [the state's] health care system."

The reaction from the political class has been sharp, with every member of the state's congressional delegation warning against it. Rhode Island's leading newspaper has a curious reaction, putting the word "entitlement" in scare quotes. Last time I checked, Medicaid fit the definition of "entitlement."

Wednesday, October 1, 2008

Medicaid LTC Demand Soaring 

By John LaPlante

Categories:  Long-term care, Medicaid

Just when you think state and federal budgets couldn't take any more, the trade group America's Health Insurance Plans has issued a report (pdf), "State Medicaid Expenditures for Long-Term Care 2008-2027" that describes the coming waves of Medicaid spending.

It projects that over the next 20 years, governments at all levels will spend $3.7 trillion on long-term care. Of that, $1.6 trillion will come through state government budgets--making it a faster-growing category than 

The picture isn't looking any better. We're living longer, which is good, but two of three people who are today 65 or older will at some point need long-term care of some sort. Home and community-based care is growing relative to nursing home care, but it's not exactly a great way of saving money.

The 81-page report has graphs displaying trends in spending on LTC for each state.

Wednesday, October 1, 2008

Medicaid Enrollment to Increase as Economy Slows 

By John LaPlante

Categories:  Medicaid

The latest annual survey of Medicaid directors from the Kaiser Commission on Medicaid and the Uninsured shows increased demand for Medicaid.

There's no surprise in a write-up of the report provided by Stateline.org, which provides some quotes from various officials--except perhaps that it says nothing about employment. In our employment-based system of health insurance, a drop in employment will automatically translate into a drop in insurance coverage.

And given the high price of insurance--made high by state mandates on individual policies and the whole tax system-induced cost-shifting that goes on--a decline in employment-based coverage is going to result in more demands on Medicaid.

The Stateline article mentions several steps that officials in the states are pursuing. Not on the docket, if the state of Washington is any indication, is trimming enrollment. The ethic that says "enroll as many people as possible" thus leads to meager reimbursement rates for physicians and other medical professionals and service cuts to existing beneficiaries. It also takes pressure off of making reforms to the insurance and health care markets to reduce costs through regulatory reforms such as letting people buy insurance across state lines and repealing certificate of need laws.

Tuesday, September 30, 2008

Bailing out Massachusetts 

By Nathan Benefield

Categories:  Massachusetts, Medicaid

The Foundry Blog of the Heritage Foundation has discovered that the federal government will "bail out" Massachusetts troubled health care plan (e.g. RomneyCare) with a $4.2 billion increase (to $21 billion) in Medicaid funding for Massachusetts.

The program had dramatically exceeded its projected costs and is not delivering the effect of universal coverage proponents had hoped for (even though that is an ill-conceived goal).

Oh, and remember how proponents of extended government insurance claim it will actually save money by reducing uncompensated care passed on to taxpayers (i.e. through Medicaid). Yeah, that didn't happen either.

Tuesday, September 30, 2008

A Medicaid Primer and Proposal 

By John LaPlante

Categories:  Medicaid

The Heritage Foundation offers a new review of the scope and troubles of Medicaid.

"Medicaid is a paradox.

It is criticized as both too stingy and too generous; com­prehensive but incomplete; unreliable yet essen­tial; too complex and too inflexible; a program that is both shunned and embraced by individuals and providers.

Medicaid promises rich benefits but restricts access, promotes welfare dependency, and creates new inequities among working families who pay for a welfare program."

Dennis G. Smith recommends turning the program into one of premium assistance, enabling individuals to purchase coverage in the non-governmental market.

 

Friday, September 26, 2008

Is Privatization to Blame? 

By John LaPlante

Categories:  Indiana, Medicaid

An article in the Indianapolis Star contains a twofer in an article about changes eyed for rules governing how much money Medicaid recipients can retain.

First, it says that attempts by Indiana officials to prevent Medicaid estate planning are unnecessarily harsh. Second, it lays the blame on the state agency's decision to privatize [contract out, I suspect] the process of determining who is eligible for Medicaid.

Certainly contracting efforts can go wrong; drawing up a good contract draws skill and experience.

Jeff Wells, director of Medicaid for Indiana, says that the privatization effort has had no effect on the Medicaid asset question, and that people have had plenty of time to respond to the proposed changes in the rules.

Thursday, September 25, 2008

Got Medicaid? 

Maryland advertising a program that has uncertain future funding

By Marc Kilmer

Categories:  Maryland, Medicaid

Maryland officials are undertaking an advertising campaign to get people to sign up for Medicaid:

Gov. Martin O'Malley and Baltimore health advocates announced the launch yesterday of a $150,000 advertising campaign designed to let uninsured Baltimoreans know that thousands more of them are eligible for Medicaid.

Under a law that went into effect in July, parents with annual incomes up to 116 percent of federal poverty guidelines, or about $20,500 for a family of three, are now eligible for Medicaid. Before the new guidelines were passed, only parents making less than 40 percent of poverty were eligible.

"It's not enough just to pass a law. ... We have to do the outreach," O'Malley said at a news conference outside a social services center in Pigtown.

The "Got Healthcare?" campaign features the Democratic governor and four Ravens players. Radio spots featuring O'Malley and Ravens safety Ed Reed will be heard on five area radio stations. Print ads will also run on more than two dozen billboards, 53 buses and 30 bus shelters.

The only problem? There's no money after two years:

Health Secretary John M. Colmers said the state can pay for the expansion for two years without taking money from the state's general fund. After that, Colmers said, funding will be linked to the success of November's slot machine gambling referendum.

Linking it to the slots referendum is a tricky thing. The law that allocates how slots revenue will be divided says nothing about funding Medicaid with it. The money is divided between education, horse racing corporate welfare, and a few other things. So the only way Medicaid can benefit is if the slots revenue supplants money that would have gone to these other things.

Also, the idea that this money isn't coming from the general revenue fund is absurd. I'm not sure if Colmers misspoke, but it's not like special funds (e.g., federal money) is paying for the entire Medicaid expansion. The fiscal report for the legislation that authorized this expansion very clearly noted that the money to pay for it was coming from the general fund.

What Colmers probably meant to say is that the General Assembly budgeted enough funds to pay for two years of Medicaid expansion. It also authorized further expansion in a third and fourth year but did not budget funds for this. It said that if funds were available this expansion would take place. Given the state's budget picture, I'd wager that funds won't be there. And given the way the General Assembly acts, I'd wager that the Medicaid expansion happens regardless.

Wednesday, September 24, 2008

Medi-Cal Crisis Endures, Despite Budget Resolution 

Both Providers and Patients Suffer, As Politicians Dodge Reform

By John R. Graham

Categories:  California, Medicaid

Three months late, governor Schwarzenegger has finally signed a budget. Unfortunately, the governor and legislators missed the chance to wrangle Medi-Cal, the state’s Medicaid program, under control.

The budget agreement held the line pretty well on this gargantuan program for the short term appropriating 14.5 billion for 2008-2009 versus $14.2 billion last year. But that’s not the whole story: total Medi-Cal spending will be more than twice as much, $39.4 billion, because the federal government pays the state for most of it.

But Medi-Cal’s long-term spending trend is still out of control: Between 1997-1998 and 2006-2007, MediCal spending increased at an annual rate of 7 percent, nearly doubling. And fully one third of this increase was due to increased enrollment. Because of the federal matching payments, California has an incentive to enroll more and more people into government dependency for their health care.

But Medi-Cal does no favors for providers: In 2003, Medi-Cal paid physicians only 59 percent of what Medicare (itself a poor payer) paid, on average. And the situation got worse when California started drifting into this year’s budget crisis. During the special session last February, the governor signed a bill rolling back Medi-Cal providers’ fees by 10 percent, starting July 1. Doctors and pharmacists argued that the roll-back violated federal Medicaid law, and a federal judge agreed. So, the state has partially restored the cuts imposed last summer, but continues its appeal.

The governor and legislature must be pretty confident they will prevail: The budget extends the 10 percent payment cut until March 1, 2009, after which providers will get some relief.

Or maybe not: even if the federal court decision stands, and blows up the roll-back, the state couldn’t pay providers what the judge demands anyway. In fact, the “annual” budget doesn’t really even cover the whole fiscal year. There will have to be a special election (likely next March or June) to authorize borrowing $5 billion against future lottery receipts.

So, despite years of out-of-control spending, Medi-Cal still fails both providers and patients. At its core, the problem is not a budgetary crisis: it’s a crisis of government dependency.

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