Week begining May 7, 2012

58 CDT

What's New in Medicaid
And Other Health Care Issues

Making Medicaid More Like Food Stamps

In a recent Health Alert at his health blog, NCPA President and CEO John C. Goodman explores how making Medicaid more like the Food Stamps program would allow Medicaid beneficiaries to be treated more like privately insured individuals.

ObamaCare Health Insurance Tax Applies to Medicaid

The 36 states that contract with private managed-care companies to run their Medicaid programs will be subject to the ObamaCare premium tax. A study from Milliman, the actuarial and consulting firm, estimates that the tax will increase Medicaid premiums by 1.5 to 1.6 percent nationwide, which in turn will cost state and federal governments between $36.5 and $41.9 billion over 10 years, notes Avik Roy at his Forbes blog.

Medicaid Expansion Will Make a Big Problem Worse

A Centers for Medicare and Medicaid Services report shows that the proposed Medicaid expansion, together with greater participation by individuals eligible under current rules, is projected to add 14.9 million people to enrollment in 2014 and 25.9 million people by 2020. According to the Heritage Foundation, the expansion will increasingly strain state budgets since the federal contribution decreases overtime.

Medicaid and Medicare

More than One Way to Save on Medicaid

Improving the efficiency of Medicaid is a priority in some states given budget shortfalls and the coming influx of enrollees that will become eligible under the new health care law. The American Enterprise Institute argues in favor of research showing that policies focused on adherence hold more promise for cost-savings than do restrictions on prescriptions.

Dual Eligibles Consume More Health Care Resources

Dual eligibles comprise a greater percentage of spending, according to a policy brief by the Kaiser Family Foundation. Findings in the brief show that dual eligibles had higher hospitalization rates, that a larger share of dual eligibles were in fair or poorer health than others on Medicare, and that Medicare spending for disabled dual eligibles under age 65 was substantially lower than for those over age 65.

Minimum Medical Loss Ratio (MLR) Requirements Exist in Some States

Eleven states have reported that they have minimum MLR requirements for their Medicaid managed care organizations. According to a 50 state survey by the Kaiser Family Foundation Commission on Medicaid and the Uninsured, Arizona, the District of Columbia, Hawaii, Illinois, Indiana, Maryland, New Jersey, New Mexico, Ohio, Virginia and Washington have requirements for insurers to meet a minimum "medical loss ratio."

Managed Medicaid Enrollment Continues to Escalate

Roughly 36.4 million people were covered by Medicaid managed care programs in 2010, up 8 percent over 2009. Marketwatch reports that the data from state regulators and insurers shows current estimates for enrollment up an additional 4 percent to 37.8 million.

U.S. Medicaid Breach May Be the Work of European Hackers

The exposure of 24,000 U.S. Medicaid files bearing names, Social Security numbers and other private information is believed to be the work of eastern European hackers, according to Reuters. The full extent of the breach is probably wider than officials know because each file often contains information on more than one individual.

Innovation Difficult When it Comes to Medicaid

Given the political difficulty of reducing Medicare spending in the short-term, the focus inevitably turns to Medicaid. Aaron Carroll argues that states are in a position where they will have to innovate at the state and local level, which will be difficult, and reduce costs.

Block Grants, Market Competition Could Overhaul Drastically Overhaul Health Care Entitlements

A recently introduced modified budget proposal would significantly overhaul health care entitlement programs by turning Medicaid into a block grant program and introducing more market competition into Medicare. According to the American Medical Association, the $3.4 trillion budget proposal for fiscal 2013 aims to lower future revenues and cut deficits by $5 trillion when compared with the budget plan introduced by President Obama in February.

ObamaCare and Romney Proposal Not So Different on Health Care

Mitt Romney's latest vision for health care shares many elements identical to provisions of the Affordable Care Act. According to Cedric Dark in the Baltimore Sun, both Mr. Romney's current plans for health care and Mr. Obama's Affordable Care Act call for insurance exchanges and subsidies. Additionally, both offer high-risk pools.

Fate of Health Law's Medicaid Expansion Hinges on Doctor Pay

A new version of the Medicaid expansion in the health care law contains a provision requiring states to pay primary care physicians no less than 100 percent of Medicare payment rates in 2013 and 2014 for primary care services, reports The Hill. House Republicans have argued that it hides the true cost of the Medicaid expansion if Congress ends up extending the rate bump indefinitely or promises millions of people coverage that will turn out to be worthless if patients can't find a doctor.

Proposed Rule Could Make Millions Ineligible For Health Insurance Subsidies

Consumer advocates, physician groups and several Democratic lawmakers are quietly working against the implementation of tax credits to help millions of people purchase insurance, reports Kaiser Health News. The groups are opposing a section of the law that outlines when low- and moderate-income employees can opt out of their employer's coverage and instead get federal subsidies to buy insurance through new state-based marketplaces, called exchanges.

Reallocation of Health Dollars and New Sources of Funds Needed

As the Affordable Care Act takes effect, Medicaid and new state health insurance markets will begin reimbursing clinical care for the individuals that public health departments currently serve. The Institute of Medicine at the National Academies argues that state and local governments should allocate the funds freed up by this shift in coverage to public health departments to use for activities that promote health and prevent illness and injuries.

House Republicans Introduce Comprehensive Medicaid Reform

As a way of returning more power to the states, a group of Republican lawmakers are proposing to combine Medicaid and the Children's Health Insurance Program into a single block grant. The Heartland Institute reports that the State Health Flexibility Act would give states the sole authority to design health care subsidy programs that best meet the needs of their citizens.

State News

California officially unveiled the four counties that will kick off the three-year project to eventually shift 1.1 million dual eligible to a Medi-Cal managed care program.

Colorado's scaled-down Medicaid expansion may get federal matching funds, but lead to higher costs.

Connecticut: After having cut ties with managed care organizations early this year, the state expects to save money under its new arrangement of directly reimbursing health care providers.

Florida: An association of counties intends to sue the state over legislation requiring counties to pay up to $325 million in contested Medicaid bills.

Georgia's Department of Community Health will ask medical providers and insurers to give the agency some flexibility on payments due to cash-flow payments stemming from increased Medicaid enrollment.

Illinois's average household could be facing higher hospital bills under Democratic Gov. Pat Quinn's $33.8 billion proposed budget, which decreases how much the state compensates providers treating patients on Medicaid.

Kansas Gov. Sam Brownback and his top welfare officials have announced they are moving forward with the administration's plan to reorganize the state's three main social service agencies.

Kansas Gov. Sam Brownback has agreed to delay plans to move thousands of developmentally disabled from Medicaid into a managed-care health plan.

Louisiana: Home health services financed by the state Medicaid program remain plagued by claims of fraud and other personnel problems.

Minnesota: Congress is trying to determine whether the state manipulated the rate certification process in the Medicaid program to wrongly obtain federal dollars.

New York state auditors say data problems and information delays at the Medicaid claims processing system have caused $36 million in improper payments and another $6.3 million in overpayments.

North Carolina's Medicaid program will dodge two immediate fiscal crises because state officials outlined ways to close a projected $150 million shortfall and because federal regulators agreed recently to extend the deadline to carry out new personal care service requirements.

Texas lawmakers expect the state to save more than $100 million by including pharmaceutical reimbursements in Medicaid managed care.

Texas's State Board of Dental Examiner told lawmakers Wednesday that it doesn't have enough resources or legal authority to crack down on careless and abusive dentists.

Be Prepared

Order a copy of the NCPA Handbook on State Health Care Reform here.

Take Advantage of the NCPA's Medicaid Service Center. The Medicaid Service Center can help state-based think tanks with commentaries, policy papers and speakers for briefings. Those interested in exploring further should contact Devon Herrick at (972) 308-6470.

Links of Interest

What the Other Side Says

Center on Budget and Policy Priorities
Families USA - Medicaid and Children's Health
The Commonwealth Fund
The Kaiser Commission on Medicaid and the Uninsured

SPN Medicaid Exchange