Medicaid Mess

By Greg Scandlen

The states are trying to figure out what to do with the Medicaid responsibilities of ObamaCare, especially since Judge Vinson in the Florida decision squelched any hope they might have had that it would be tossed out in court.

The issue goes well beyond the expansion to 133% of poverty for all adults. Most of that (90%) will be paid for by the Feds, although that still leaves a lot of benefits and administrative expenses for the states to pick up. The bigger issue is with the people who are currently eligible but not enrolled. Some 11 million of the uninsured are currently eligible for Medicaid or SCHIP. The new law divides the state/federal match for these people at the same place it has been for some time.

 

States Slashing Medicaid

Also of concern is the “maintenance of effort” requirement in the new law. Arizona, for one, expanded Medicaid eligibility to single adults some years ago, to the point of being one of the most generous states in the country. Now, with state finances in the toilet, they would like to cut back on the eligibility levels, but will probably not be allowed to.  Kaiser Health News reports that Arizona’s “Medicaid spending has gone from 17 percent of its general fund in 2007 to nearly 30 percent this year.”

It isn’t just Arizona. The New York Times reports that California’s Jerry Brown wants to cut Medicaid by $1.7 billion, and New York’s Andrew Cuomo wants at least $2 billion in cuts. The Times notes that part of the stimulus package in 2009 included $90 billion to offset rising Medicaid costs, and Congress appropriated another $15 billion last August, but even with that help, “deficits were so deep that 39 states cut Medicaid payments to providers in 2010, and 20 states pared benefits.” Now that money is running out –

On July 1, the enhanced federal aid will disappear, causing an overnight increase of between one-fourth and one-third in each state’s share of Medicaid’s costs. But because of the federal eligibility restrictions, the options for states are largely limited to cutting benefits that are not federally required; reducing payments to doctors, hospitals and nursing homes; and raising taxes on those providers.

 

States Think About Withdrawing from Medicaid

The Wall Street Journal reports that, “At least a half-dozen states have publicly discussed withdrawing from the Medicaid program altogether because of its expense.” For example –

Texas estimates that it will cost an additional $9.1 billion to retain its current Medicaid service levels through 2013. If it tried to plug that gap by cutting health-care provider rates, it would have to reduce them by 48%— and that might drive care providers to stop accepting Medicaid patients, according to the governors’ letter. Texas Gov. Rick Perry, a Republican, has threatened to pull out of Medicaid.

 

Medicaid Panel Crashes

Meanwhile, a new federal commission tasked with recommending better information systems for state Medicaid programs has hit a brick wall, according to an article by Brett Coughlin in Politico.

The story says,

… the Medicaid and Chip Payment and Access Commission (MACPAC) hit the reset button Friday when faced with the complexity and cost of the effort.”

One panel member called for a “do over” and others suggested the panel was poised to hit Congress “in the face” with a big new request for funds. A new survey to Medicaid and Children’s Health Insurance Program beneficiaries, for instance, is estimated to cost $45 million.

So, maybe not so much.

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HSAs For Illinois State Employees

By Greg Scandlen

Our friend, Jim Porterfield, has written an impressive study for the Illinois Policy Institute called “Health Savings Accounts: A Win-Win for Illinois Public Employees and Taxpayers.”

In it he describes how the state and its workers could save literally billions of dollars by switching to HSAs for state employees. He writes:

When compared to the state’s HMO and Quality Care Health Plan premium costs for fiscal year 2011, properly-structured health savings account reforms could allow the state budget to show a savings every year through 2023. Under the three scenarios examined in this study, Illinois taxpayers could save as much as $18 billion to $27 billion between 2011 and 2023. Moreover, state employees and non-Medicare retirees can also save on FICA and federal income taxes while building savings for day-to-day and unexpected current and future health care expenses.

The study drills down deeply into the numbers to arrive at the calculations. Very likely you could replicate his work for your own state or entice Jim to do it for you.

 

HIT Privacy in Massachusetts

By Greg Scandlen

A friend forwarded this announcement from Aetna in Massachusetts:

Massachusetts recently passed laws requiring that insurance carriers, HMOs, third-party administrators and self-funded plans report certain data on Massachusetts residents covered under Massachusetts contracts to a new All-Payer Claims Database (APCD). The APCD was created and is maintained by the Massachusetts Division of Health Care Finance and Policy (the Division).

All carriers must start submitting member/claims data to the APCD for calendar years 2008 through 2010 by January 31, 2011. Carriers then need to submit data each month, starting in February 2011. We are working with the Division to report this information for you. You do not need to take action for this reporting.

Content of data and its intended use

The data to be reported to the APCD includes, but is not limited to: subscriber and member identifiers; member demographics; race, ethnicity and language information; plan type; benefits codes; enrollment start and end dates; behavioral and mental health, substance abuse and chemical dependency, and prescription drug benefits indicators; and claims-line detail for all health care services provided to Massachusetts residents covered under Massachusetts contracts.

Massachusetts intends the APCD to serve as a reliable clearinghouse for health care cost and quality information for consumers, employers and governments, so they can make health care purchasing decisions. The APCD also will serve as the central repository for all health care claims data for Massachusetts state agencies. The Division will provide the required APCD data extracts to other Massachusetts government agencies. Massachusetts recently passed laws requiring that insurance carriers, HMOs, third-party administrators and self-funded plans report certain data on Massachusetts residents covered under Massachusetts contracts to a new All-Payer Claims Database (APCD). The APCD was created and is maintained by the Massachusetts Division of Health Care Finance and Policy (the Division).

All carriers must start submitting member/claims data to the APCD for calendar years 2008 through 2010 by January 31, 2011. Carriers then need to submit data each month, starting in February 2011. We are working with the Division to report this information for you. You do not need to take action for this reporting.

Content of data and its intended use

The data to be reported to the APCD includes, but is not limited to: subscriber and member identifiers; member demographics; race, ethnicity and language information; plan type; benefits codes; enrollment start and end dates; behavioral and mental health, substance abuse and chemical dependency, and prescription drug benefits indicators; and claims-line detail for all health care services provided to Massachusetts residents covered under Massachusetts contracts.

Massachusetts intends the APCD to serve as a reliable clearinghouse for health care cost and quality information for consumers, employers and governments, so they can make health care purchasing decisions. The APCD also will serve as the central repository for all health care claims data for Massachusetts state agencies. The Division will provide the required APCD data extracts to other Massachusetts government agencies.

So all of the assurance about privacy are out the window. Your most personal detailed information will be collected along with your personal identifiers

High Risk Pools

By Greg Scandlen

As you know, the risk pool mandate of ObamaCare has been a mess. Rather than the expected enrollment of 375,000 by the end of the year, they actually enrolled only 8,000, but even then were spending more than they had budgeted. Well, this got a whole lot of negative attention, so apparently someone from the White House gave certain reporters a good talking to.

At least that is the impression one gets from reading Sarah Kliff’s more recent article in Politico. Here she spins the available information beyond recognition.  She writes: “Within the past 75 days, enrollment in the federally-run high risk pools has just about doubled.” Wow! Nearly doubled? Well, no. Enrollment went from 8,000 to 10,000, an increase of 25%. I guess that is the kind of math they are teaching in J-School these days.

But, that’s okay. She is even more gung ho on the tremendous out-reach programs the states have launched. North Carolina, for instance, “aired a six-week television ad campaign in late November and put up 14 billboards across the state.” Wow, again! That must have really made enrollment shoot up, right? Well, no. But it did result on increased traffic to the web site, with “overall web traffic seeing a 44 percent increase.” The article doesn’t include information on new enrollment.

But North Carolina did lower its premiums along with the federal pools that lowered premiums by 20%. Double Wow! That must mean the risk pool costs have been controlled, eh? Well, no. Premiums were lowered because not enough people were enrolling. The program was supposed to charge enrollees 100% of standard rates in the private market, but this is government. Premiums can be whatever they want them to be. Who cares when taxpayers (and the Chinese) are paying the difference?

 

State Round-Up

By Greg Scandlen

Next up in the struggle over ObamaCare are the states, which are expected to implement all of the garbage that came out of Congress. Unlike Members of Congress, the state governments are actually expected to know what they are doing. They don’t get to borrow trillions from the Chinese to hide their mistakes. And they are – what’s the word? Appalled? Dumfounded? Flummoxed? Aghast? – insert your own expression.

In any case, an article by David Lightman in the Miami Herald highlights many of the issues the states are dealing with, beginning with the insurance exchanges. Here California has already moved ahead with efforts to create an exchange, even though no one knows what the federal requirements will be or if the law will survive to 2014. But that’s okay, since California has lots of extra money to spend on frivolous things, right? In South Carolina, on the other hand, new governor Nikki Haley has no intention of spending money to implement an unconstitutional law, and the Attorney General of Wisconsin says after the Florida decision, the law is dead unless it is revived by an appellate court.

And then there is Medicaid expansion. Mitch Daniels in Indiana estimates it will cost his state up to $3 billion over the next ten years. We’ll be looking more closely at the Medicaid problem in a separate post.

The Republican Governors’ Association plans to “play a central role in organizing GOP governors against the law,” according to an article by Shane D’Aprile in The Hill.

The article also says,

Regardless of how the RGA’s effort shapes up, one potential GOP presidential hopeful is certain to play a leading role. Mississippi Gov. Haley Barbour, the outgoing chairman who helped raise record amounts of money for the committee this past cycle, is now the RGA’s policy chairman — a newly created position.

In that capacity, Barbour will be a high-profile liaison of sorts between GOP governors and the party’s leadership in Washington.

Haley Barbour is probably the savviest political strategist in the Republican Party today. It is doubtful he will go very far in the presidential race, but when it comes to finding the pressure points on a policy issue there is no one better.

The New York Times also discusses how the states will deal with the court ruling.  It writes,

“in a few states that are party to the litigation, Republican governors and attorneys general declared the expansive health care law effectively null as a result of the judge’s ruling. They suggested they would suspend planning and implementation until appeals courts could rule, although they did not provide details about what precisely might change or whether they would refund federal planning grants already awarded.

It quotes officials from Florida, Wisconsin and Idaho, but also says some Republican governors, especially Nathan Deal in Georgia, are more cautious. And, of course, Democrats like Vermont’s Peter Shumlin are “moving full speed ahead,” which is odd, since Vermont is also moving to set up a single payer system in that state.

 

Who Pays?

By Ross Schriftman, RHU, LUTCF, ACBC, MSAA

Horsham, PA

Tel. 215-682-7075

Rfs270@aol.com

 

The argument that everyone must have health insurance so that we who are insured don’t end up paying the medical bills for those who aren’t insured has been repeated by so many people so many times that it has become an irrefutable truth. That is why Obamacare’s linchpin provision requires all of us to have health insurance by 2014. In fact we will be mandated to purchase only the kind of coverage designed by the Secretary of Health and Human Services in Washington.

Interestingly, the fact is that uncompensated care, although a serious problem, is a small part of our overall healthcare costs.  In 2008 it represented an estimated $43 billion of our $2 trillion healthcare bill or about 2%.  I have not seen a study that shows how much of uncompensated care is for health care services received by people who already have insurance but refuse to pay a deductible or copayment or for services excluded by the insurance plan and not paid by the individual who received them.

When did it become one individual’s responsibility to pay for someone else’s expenses? If someone doesn’t have life insurance and dies does everyone who has life insurance have to pay for his funeral and support his family?  If someone doesn’t have disability income insurance and becomes sick do the rest of us get stuck paying his mortgage and utility bills?  Of course not.

So why would it be any different with health insurance.  Whether or not we have health insurance we ultimately are personally responsible for our medical bills being paid.  Over the years the share of out of pocket expenses people pay for health care in our nation has gone from 10.5% in 1970 to only 4.3% in 2009 according to a recent report by the Centers for Medicare and Medicaid Services.  When did we begin to think that our health insurance is supposed to pay for all of our healthcare needs?

Last week a second federal judge ruled that mandating that everyone purchase health insurance is unconstitutional and he voided the entire new law using the government’s own argument that the mandate was a key provision of the legislation and not severable from the rest of the law.

Eventually our highest court will render a decision as the government has appealed the judge’s ruling. If the individual mandate is ruled constitutional by the Supreme Court then why wouldn’t the next step be that everyone is required to purchase long term care insurance?  Using the Obama Administration’s same logic of “public good” could then be applied to this kind of insurance. After all right now the taxpayers get stuck for more than 50% of the cost of long term care services through the Medicaid program.  The vast majority of people receiving benefits under this program failed to purchase private long term care insurance.  The Medicaid program is helping to bankrupt the states and drive the Federal government into deeper debt.

Then take into account that only about 20% of American workers have any kind of disability income insurance and then realize that about 60 million adult Americans have no life insurance.  An individual mandate on health insurance is just the first step of our government mandating that we purchase all kinds of goods and services that could be determined to be “Necessary and Proper” for the public good.  If this first step is successful than the whole concept of our democracy in which free people make their own decisions and are personally responsible for those decisions is gone.  We will no longer be the nation of freedom that we were founded upon