Tag Archives: Medicaid

Put Medicaid on Welfare

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http://www.realclearhealth.com/articles/2017/06/07/put_medicaid_on_welfare_110620.html

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The American Health Care Act (AHCA), which was recently passed by the House of Representatives, proposes a radical change in Medicaid funding. Bill Clinton-era welfare reform served as a guide for the latest health care reform push—but to be successful, we must draw the correct lessons from those efforts in the 1990s.

Aid to Families with Dependent Children (AFDC), the pre-welfare reform cash assistance program for the poor, was a joint state-federal program, just as Medicaid is. Under this arrangement, Washington provides much of the funding and states operate the programs. Funds are distributed via matching grants, under which each dollar spent by states is matched by dollars from Washington. Medicaid varies the matching rate from between one and three dollars, with lower income states getting more. Notably, the Medicaid match has been open-ended–meaning as states spend more on approved coverage, they continue to receive more federal money.

The welfare reform signed by President Clinton in 1996 replaced AFDC with Temporary Assistance to Needy Families (TANF). TANF shares federal dollars using block grants, under which the federal transfer to a state in a given year is fixed, with relatively few strings attached. The AHCA proposes a slight variation on the block grant principle, with states receiving a fixed dollar amount per beneficiary beginning in 2020 (within five benefit categories). Federal assistance adjusts based on the number of enrollees. The AHCA also gives states the option of a straight block grant just as with TANF.

Block grants have been an important reason why there are 10 million fewer Americans on welfare today than in the early’90s, all without an increase in child poverty as critics of reform then feared. Matching grants create perverse incentives for states, which bear neither the full costs of over-generous programs nor retain the full amount of any savings from improved efficiency. As half or more of any Medicaid cost increase is paid for by Washington, state legislators are generous when spending federal dollars. Conversely, states only get to keep at most half of any savings from reducing Medicaid waste or abuse, thus there is little incentive to undertake any such efforts.

With block grants, meanwhile, states pay the full cost of expanding a program and keep all of the savings from reducing waste. The amount of federal assistance remains the same either way. State legislators must weigh the full cost of their generosity in such a system, enhancing efficiency in how they spend tax dollars.

Matching grants also impose conditions on state programs for eligibility, such as which groups of persons and types of care must be covered under Medicaid. Under AFDC’s matching grant system, states could not craft work requirements that best suited their population and economy without running afoul of federally imposed conditions.

Block grants, by contrast, allow states flexibility in designing programs to meet local needs and conditions. In the case of welfare reform, moving to block grants allowed states to tailor work requirement policies for local conditions.

Opponents of welfare reform in 1996 feared that some states would drastically slash benefits, forcing remaining states to do the same or become welfare magnets. This “race to the bottom” did not materialize because welfare reform wisely included maintenance-of-effort provisions, which limited potential state cuts in benefit levels. This safeguard prevented a wholesale diversion of the block grants to other state spending.

Also key to the success of welfare reform were the policy experiments that occurred before the 1996 law was signed. The innovative policies that transitioned millions of Americans from welfare to work emerged from waiver programs under the old AFDC. Similar recent experiments under Medicaid waivers suggest that the time may now be right for Medicaid reform.

One weakness of welfare reform was the rather narrow application of the block grants. TANF is but one of dozens of means-tested assistance programs. The benefits of welfare reform would have been greater if more assistance programs had been combined into one super block grant. Given the close connections between medical expenses and health choices, broad block grants would be particularly valuable for Medicaid.

A Medicaid program made more efficient due to block grants would be unlikely to produce the same reduction in enrollees as seen with TANF, which helped transition Americans off of welfare and into work. But block grants are a useful tool even when reducing enrollees is not the goal. A more likely outcome for Medicaid is better coverage for core beneficiary groups. States currently choose to cover optional treatments in pursuit of matching dollars, spreading available federal dollars very thin and contributing to the chronic problem of low Medicaid reimbursement rates.

In sum, block grants are not a panacea for federal and state budget woes, nor can they magically eliminate the cost of providing medical care to the nation’s poor—but their provision of flexibility and incentives for fiscal discipline allowed states to get welfare spending under control. It’s now time to put Medicaid on welfare.

The ‘Kimmel test’ could be a good health care yardstick for the GOP

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The ‘Kimmel test’ could be a good health care yardstick for the GOP

Should the “Kimmel test” help shape the health care bill that the US Senate is now working on behind closed doors? Republican senators could easily use it to vet the bill while staying true to their conservative roots.

Last month, talk show host and comedian Jimmy Kimmel shared with his audience a story about his son, Billy, who had been born a few days earlier with a heart defect called the tetralogy of Fallot and needed open heart surgery at three days old.

“If your baby is going to die, and it doesn’t have to, it shouldn’t matter how much money you make,” pleaded Kimmel in an impassioned take on health insurance that has been viewed by millions.

Not long afterward, Republican Senator Bill Cassidy, a physician who represents Louisiana, said that any Republican health care legislation would need to pass the “Jimmy Kimmel test.” Morally and politically, Cassidy is right.

Every day in my work in a pediatric emergency department, I see firsthand that the Affordable Care Act, the law that the Republican House and Senate are determined to replace, saves lives. Before the ACA, children born with pre-existing conditions were often uninsurable, their families left to struggle with an unmanageable economic burden.

Kimmel thinks the solution is easy: “Don’t give a huge tax cut to millionaires like me and instead leave it [the ACA] how it is.” But the solution is far from easy.

As a physician, a conservative Republican, and a health insurance scholar, I believe that government intrusion into private insurance has had serious consequences. Families across America are paying thousands of dollars a year more in higher health insurance premiums. Insurers, which have been losing money, have started abandoning entire markets. The House of Representatives passed the American Health Care Act in early May, believing it had to do so to stabilize markets and reduce premiums. But the Congressional Budget Office finally reported that the AHCA strips away most protections for pre-existing conditions and pushes an estimated 23 million more Americans into being uninsured.

Can we Republicans pass the Kimmel test, improving on the AHCA while still ensuring the sustainability of American health care? Senate Republicans have expressed skepticism, but I believe we can. The key is to stay true to our roots by adhering to four conservative principles.

First, private markets must remain free. Healthy people will need to help pay for sick people — that’s how health insurance works — but they must be allowed to choose their own insurance. The ACA coerced the healthy into paying above-market rates for insurance, and so it prohibited the lower-premium catastrophic plans that make sense for most families.

Second, the poor should never pay for government benefits to the wealthy. The main way the ACA tries to help families with pre-existing conditions is by regulating insurance premiums, but that means its benefits are indiscriminate. The young and healthy, many of whom are struggling economically, pay more. The elderly, many of whom need help but some of whom are wealthy, pay less. We should use America’s progressive tax system, where the wealthy pay more in taxes, to implement a means-tested health insurance system that specifically helps the needy. Republicans don’t love taxes, but a hidden tax is worse than a visible one, and it is utter anathema that the ACA moves even a single dollar from the poor to the rich.

Third, redistribution must be transparent. The ACA mainly forces higher costs onto private insurance plans, which invisibly pass those costs to healthy consumers. Democrats may prefer this hidden tax politically, but to abide by conservative principles, a subsidy must come with a budget that can be seen, understood, and voted on.

Fourth, health insurance subsidies must be structured to reduce expenditures over time. Just as welfare should be a bridge to independence for individuals, subsidies should be a bridge to sustainability for the health care industry.

The ACA introduced some promising cost-reductions, like financial responsibility provisions for hospitals and limits on luxury plan tax deductions. The Senate needs to continue these efforts. Subsidized care must be adequate and compassionate, but it should insist on using generic drugs (when available) rather than brand-name ones, and it should not cover newly constructed hospitals or low-value services. Medicine must de-intensify, helping patients receive care at home instead of in hospitals when appropriate and using social workers to meet social needs. We also need to help subsidized patients take more responsibility for their health — showing up for appointments, taking prescribed medications, and, if needed, quitting smoking and receiving treatment for addiction.

In my view, the best way to accomplish these four goals would be through either a federally funded expansion of Medicaid or a federally run high-risk pool, which would offer families a means-tested option to buy in once medical bills reach a certain point. Such a plan would intentionally have high deductibles and copays, but it would offer extra assistance to needy families. The private insurance market would be free to compete on price and quality, innovating new ways to deliver value.

I am not writing to advocate for any specific plan. Instead, I offer conservative principles as a yardstick: Does the program provide compassionate, adequate coverage to the sick? Is it transparent, fair, and sustainable? Are the healthy still free to choose their own insurance?

Republicans can craft sensible, conservative subsidies to protect our most vulnerable citizens while also preventing hidden taxes and blank checks. Kimmel is right: No parents should have to choose between bankruptcy and saving their child’s life. Nor does our nation have to choose between fiscal irresponsibility and compassion for our most vulnerable.

Trump Budget, Revised AHCA, Credit Negatives for NFP Hospitals

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http://www.healthleadersmedia.com/finance/trump-budget-revised-ahca-credit-negatives-nfp-hospitals?spMailingID=11188911&spUserID=MTY3ODg4NjY1MzYzS0&spJobID=1180412845&spReportId=MTE4MDQxMjg0NQS2#

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The one-two punch of massive cuts to Medicaid that are proposed in both the new budget and the House Republicans’ revised American Healthcare Act would result in cuts of close to $1 trillion over 10 years, analysis shows.

Cutting Medicaid by more than $860 million over the next decade would be a credit negative for states and not-for-profit hospitals, both of which would be left scrambling for alternative funding to cover the loss, according to a new report from Moody’s Investors Service.

Last week the Trump administration unveiled a budget proposal that includes $610 billion in cuts to core Medicaid services, and an additional $250 million in reductions to Medicaid expansion programs created under the Affordable Care Act.

The following day, the Congressional Budget Office released its scoring of the revised American Health Care Act – the Republican plan to repeal and replace the Patient Protection and Affordable Care Act and estimated that it would reduce Medicaid spending by $834 million through 2026.

“The proposals significantly change the longstanding Medicaid financing system and are credit negative for states and not-for-profit hospitals,” Moody’s said in an issues brief.

For states that don’t have the luxury of ignoring budget imbalances, the changes would increase pressure to either kick people off Medicaid, increase the state share of Medicaid funding, or cut payments to hospitals and other providers, Moody’s says.

Hospitals, particularly those serving a high mix of Medicaid patients, could expect to see reimbursement cuts and more cases of uncompensated care as Medicaid patients lose the coverage they’d gained under the ACA’s expansion.

Medicaid is already a significant budget burden for states, consuming between 7% to 34% of state revenue and averaging 16%.

Under the ACA, bad debt expense at not-for-profit hospitals in states that expanded Medicaid eligibility declined on average by 15% to 20% since 2014, enhancing these hospitals’ cash flow. Similarly, the gains in insurance coverage lowered the nationwide uninsured rate to approximately 11%, with uninsured rates even lower in states that expanded their Medicaid rolls, Moody’s says.

“Although the budget would give states limited new flexibility to adjust their Medicaid programs, the measure overall reflects a significant cost shift away from federal funding to states,” Moody’s says. “This cost shift is significant and would force states to make difficult decisions about safety-net spending for hospitals that serve large numbers of indigent patients.”

Children’s hospitals — and their patients — caught in the crosshairs with planned federal cuts

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http://www.healthcaredive.com/news/childrens-hospitals-and-their-patients-caught-in-the-crosshairs-with-p/443825/

Republican plans targeting federal funding for health coverage have drawn ire from Americans in all corners of the country, but some of the loudest voices are coming from parents. They have cornered members of Congress at town halls to ask how the slashed budgets will affect some of society’s most vulnerable.

Suggested cuts to Medicaid and the Children’s Health Insurance Plans (CHIP) would throw millions of Americans off insurance and leave hospitals that are already teetering financially facing more uncompensated care. Children’s hospitals, safety net hospitals and rural hospitals will be most affected, and disabled children will face devastating cuts in coverage.

The funding decreases have been proposed in bills making their way through Congress and separately by President Donald Trump. They would shift the cost burden further onto states, many of which have seen success in expanding Medicaid, which is also on the chopping block.

“Children, the elderly, the disabled, and others from our most vulnerable populations would all be affected by these deep budget cuts,” Joanna Hiatt Kim, vice president of policy at the American Hospital Association, told Healthcare Dive. “For hospitals, this could mean more uncompensated care as millions continue to seek needed healthcare without any coverage. For the patient, this could mean delayed care or foregoing care altogether.”

Impact on children’s healthcare

More cuts to Medicaid and CHIP would reverse the trend of fewer uninsured Americans, including children.

Congress created CHIP 20 years ago when 15% of children were uninsured. CHIP, the Affordable Care Act and Medicaid expansion provided more insurance offerings and now only about 5% of children are uninsured. CHIP, which is a federal/state partnership, includes free well-child visits in many states and also provides prescription coverage, inpatient and outpatient care and emergency services.

While suggesting a two-year CHIP extension in his budget plan, Trump proposed a 20% CHIP cut over the next two years. His budget also seeks a $610 billion cut from Medicaid over 10 years, despite early promises to leave the program alone.

Studies have shown that CHIP helps reduce hospitalizations and child mortality, and improves quality of care. The program has bipartisan support. However, HHS Secretary Tom Price voted twice against expansion when he was a congressman.

CHIP is up for reauthorization by Sept. 30 and governors recently spoke out in favor of expanding it. In his budget proposal, Trump proposes a two-year extension of CHIP, but also suggests program cuts, including the matching rate for states.

Jim Kaufman, vice president of public policy at Children’s Hospital Association (CHA), told Healthcare Dive that CHIP helps children’s hospitals.

“CHIP is good for kids, and that makes it good for children’s hospitals and children’s providers.”

Jim Kaufman

Vice President of Public Policy, Children’s Hospital Association

Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities, told Healthcare Dive that the cuts would shift costs to states and reduce benefits. He said Trump’s budget would eliminate a 23-percentage-point increase in each state’s federal CHIP matching rate, which is in effect until 2019. That would mean $3.5 billion cut from the program.

The budget would also cut CHIP funding for children with families that have incomes above 250% of the federal poverty line, which would affect 28 states and Washington, D.C. that provide CHIP coverage to children above the income threshold, according to Park.

This will mean states will need to pick up more of the CHIP program costs if they want to maintain the current coverage level. Park said he believes Congress will reauthorize the program, but questions remain about CHIP’s funding and benefits.

 

NYC Health + Hospitals cuts 476 positions amid financial pressure

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http://www.healthcaredive.com/news/nyc-health-hospitals-cuts-476-positions-amid-financial-pressure/444136/

Dive Brief:

  • NYC Health + Hospitals on Friday cut 476 management positions, which will reduce the current six layers of managers to four and is expected to save the health system $60 million, several news outlets reported.
  • The largest U.S. public health system cut 396 managers and eliminated 80 unfilled positions.
  • The system expects the job cuts to lead to $60 million in savings in fiscal year 2018.

Dive Insight:

The announcement of the health system’s massive restructuring day came after a $673 million loss was posted for Q3 2017. H+H interim President and CEO Stanley Brezenoff said in a statement the restructuring will reduce “unnecessary layers of management.” The health system will now be able to “better direct resources where we need them most —  at the front line of patient care.” It also cut 70 employees in February.

Revenue increased by 1.8% to $6.7 billion during the third quarter. Yet system officials said net patient service revenues dropped by 9%. The reasons behind the drop were “lower payments from the disproportionate share hospital (DSH) and upper payment limit programs,” according to the healthcare system of 11 hospitals.

At that time, H+H predicted that it would cut its $779 million budget gap this year and end with $185 million cash in hand. In April, the health system announced a redesign of its management structure after losing $776 million for the first half of FY 17, but said at that time that they did not expect layoffs.

Hospitals are facing financial issues across the country. Safety net hospitals like H+H may soon face even more difficulties. H+H has a large Medicaid population and potential cuts in President Donald Trump’s budget and the American Health Care Act – the GOP’s proposed bill to replace the Affordable Care Act – could send millions off of Medicaid. This would mean a system like H+H may soon face more uncompensated care.

H+H is looking for ways to improve its finances. One way is through a new Epic revenue cycle system that officials in May said will “improve efficiency and ensure that the health system is collecting the maximum amount of revenue for the services it delivers.” They expect it will improve clinical documentation, reduce claims denials and accelerate reimbursements.

GOP health bill would raise deductibles, lessen coverage and leave 23 million more uninsured, analysis finds

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http://www.latimes.com/politics/la-na-pol-gop-healthcare-cbo-20170524-story.html

A side-by-side comparison of Obamacare and the GOP’s replacement plan

The Republican healthcare bill that passed the House earlier this month would nearly double the number of people in the U.S. without health insurance over the next decade, according to a new analysis by the nonpartisan Congressional Budget Office.

The much-anticipated report cast a new shadow over the controversial legislation and is expected to complicate Republican efforts to get the bill through the Senate, where it already faces difficult prospects.

According to the budget office, which both parties in Congress look to for estimates on the impact of complex legislation, the bill would cause 23 million fewer people to have health insurance by 2026. Many additional consumers would see skimpier health coverage and higher deductibles, the budget office projected.

The report further undermines claims by President Trump and House Republicans that their campaign to repeal and replace the current healthcare law — often called Obamacare — will protect all Americans’ access to healthcare.

The House bill would be particularly harmful to older, sicker residents of states that waive key consumer protections in the current law, including the ban on insurers charging sick consumers more. The budget office estimates that about one-sixth of the U.S. population live in states that would seek such waivers, which would be allowed under the House bill.

 

10 key points from the CBO report on Obamacare repeal

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http://www.politico.com/story/2017/05/24/cbo-obamacare-repeal-health-care-238795

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Here are some key facts and figures from the new CBO report on the American Health Care Act, the House-passed bill to repeal and replace Obamacare. CBO stressed the uncertainty of its estimates, given that it’s hard to know which states would take up the chance to opt out of certain key parts of Obamacare. All figures are for the decade spanning 2017-2026 unless otherwise specified.

 

Trump’s $4.1 trillion budget: 9 healthcare takeaways

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http://www.beckershospitalreview.com/finance/trump-s-4-1-trillion-budget-9-healthcare-takeaways.html

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President Donald Trump’s first full budget proposal will include $3.6 trillion in spending cuts to balance the budget in the next decade.

Although the full $4.1 trillion budget plan, titled “A New Foundation for American Greatness,” will be released Tuesday, Office of Management and Budget Director Mick Mulvaney briefed White House reporters Monday on the budget.

Here are nine of the key proposals related to healthcare in President Trump’s budget proposal for fiscal year 2018, which begins Oct. 1.

1. Medicaid cuts. President Trump’s budget includes $610 billion in Medicaid cuts over 10 years. The reduction is in addition to the $839 billion pulled from Medicaid under the proposed American Health Care Act, the ACA repeal and replacement bill that phases out Medicaid expansion, according to The Hill.

2. Repeal and replace the ACA. The budget assumes passage of the AHCA. The Trump administration expects to save $250 billion over 10 years by repealing and replacing the ACA. These savings are in addition to the $610 billion in proposed Medicaid cuts in the budget, according to The New York Times.

3. Medicare unscathed. The budget makes no changes to the Medicare program or to core Social Security benefits, two programs President Trump vowed during his campaign to leave alone, according to The Hill.

4. Reduction in CHIP funding. Under the budget, $5.8 billion would be cut from the Children’s Health Insurance Program over 10 years, according to a budget document posted by The Washington Post.

5. NIH funding cut. Under the budget proposal, the National Institutes of Health budget would be reduced from $31.8 billion to $26 billion, according to The Washington Post.

6. Cuts to CDC funding. Several CDC programs would be hit with cuts under the budget proposal. One of the biggest cuts is to the agency’s chronic disease prevention programs, which would have funding reduced by $222 million, according to The Washington Post.

7. Veterans Choice Program extended. The budget calls for extension of the Veterans Choice Program, which allows veterans to go outside of the Veterans Affairs system for care. Under the budget, $29 billion more would be spent on this program over 10 years, according to The New York Times.

8. Medical malpractice limits. The budget includes medical malpractice reforms, such as capping awards for noneconomic damages, that are intended to reduce the practice of defensive medicine. The Trump administration expects these changes to save Medicare $31 billion over a decade, according to The New York Times.

9. Funds substance abuse treatment. The budget would allocate $500 million to expand access to treatments, including medication-assisted treatment, for those suffering from opioid addiction. The budget also includes $1.9 billion in block grants for states to use for substance abuse treatment and $25 million for the Substance Abuse and Mental Health Services Administration for expanding access to critical interventions. SAMHSA would also receive an additional $24 million to equip first responders with overdose reversing drugs.

10 Things to Know about Medicaid: Setting the Facts Straight

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http://kff.org/medicaid/issue-brief/10-things-to-know-about-medicaid-setting-the-facts-straight/?utm_campaign=KFF-2016-The-Latest&utm_source=hs_email&utm_medium=email&utm_content=51786609&_hsenc=p2ANqtz-_oPtCIH4gD4_ZRyWy2daz24TEoKyI_CXQyh75K4bbtRgDPBGs30nDlGsRdOe65M92Zu9Dja6Bmtm3TTQoDua3ac_xORQ&_hsmi=51786609

Medicaid, the nation’s public health insurance program for low-income children, adults, seniors, and people with disabilities, covers 1 in 5 Americans, including many with complex and costly needs for medical care and long-term services. Most people covered by Medicaid would be uninsured or underinsured without it. The Affordable Care Act (ACA) expanded Medicaid to reach low-income adults previously excluded from the program and provided federal funding to states for the vast majority of the cost of newly eligible adults.

President Trump and other GOP leaders have called for far-reaching changes to Medicaid, including caps on federal funding for the program. In the debate about Medicaid’s future, some critics of the program have made statements that are at odds with data, research, and basic information about Medicaid. To inform policy decisions that may have significant implications for Medicaid, the low-income people it serves, and the states, this brief highlights 10 key Medicaid facts.

 

No, Medicaid isn’t broken

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https://www.axios.com/no-medicaid-isnt-broken-2404950733.html

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One reason the architects of the American Health Care Act want to cut Medicaid spending and give more responsibility to the states is that they believe that the current program is “broken,” with inadequate access to physicians and out-of-control costs. This is one of those canards that is repeated so often that many people just accept it as true. Mostly, it is not true.

Like any big messy public program, Medicaid is very far from perfect, as I learned when I oversaw a Medicaid program for a Republican governor in New Jersey. But on basic measures of access and satisfaction with care, Medicaid beneficiaries look very much like people with private employer coverage despite the fact that they are sicker and poorer. And they’re doing better than the uninsured.

The bottom line: Medicaid isn’t broken — at least, not any more than private insurance is.

Finding doctors: The biggest problem that’s usually cited with Medicaid is that people have trouble finding doctors who will take them. And there are troubles with low Medicaid provider reimbursement rates and physician access, but they vary around the country. It’s not hard to find a state, or more typically a region within a state, where physician access is a real problem.

But overall:

  • 74% of Medicaid beneficiaries see a doctor each year
  • 69% for people with employer based private coverage see a doctor each year.
  • People on Medicaid are also nearly just as satisfied with their health care as people with employer coverage.

Costs aren’t out of control: Medicaid spending did jump to 10.5% in 2015 with the Affordable Care Act coverage expansion, but it dropped to 5.9% in 2016 and is projected to grow by 4.5% this year.

And per capita Medicaid costs are not rising faster than costs for private insurance. In fact, they’re projected to grow more slowly.

Some would say that’s because Medicaid underpays providers, and it does pay substantially less than Medicare in many states. Others would say, good for Medicaid; it drives a tougher bargain with providers while getting results comparable to other payers.

The AHCA would take more than 800 billion dollars out of Medicaid over the next decade by reducing funding for the Medicaid expansion and capping federal Medicaid spending. The architects of the AHCA may believe Medicaid dollars are better spent elsewhere or not spent at all, or that somehow states can make Medicaid work better with far less money.

There are many principled conservative arguments for smaller government. But the argument that Medicaid is “broken” is not one of them; it is more urban legend than fact.