Can States Stretch The Medicaid Dollar Without Passing The Buck? Lessons From Utah
By Samantha Artiga, David Rousseau, Barbara Lyons, Stephen Smith and Daniel S. Gaylin
Health Affairs
March/April 2006
In some states, Medicaid restructuring has already begun through waivers. In 2002 Utah became the first state to use a new waiver approach, under which the state financed an expansion in primary care coverage, called the Primary Care Network (PCN), with “savings” obtained from benefit reductions and cost-sharing increases for parents already covered by Medicaid.
Utah financed an expansion in primary care coverage for low-income adults by limiting benefits and raising cost sharing for very poor parents receiving Temporary Assistance for Needy Families (TANF) (with incomes below 54 percent of the federal poverty level, or $8,964 per year for a family of three in 2006), parents who recently left TANF because of employment, and parents with high medical expenses who “spent down” to qualify for Medicaid.
These reductions offset the costs of a coverage expansion to uninsured parents and other adults with incomes below 150 percent of poverty ($24,900 per year for a family of three in 2006) who were not previously eligible for Medicaid. These people became eligible for the new PCN program offering only primary care coverage, with no coverage for hospital (other than ER), specialty, or mental health care.
Although the PCN enrollees appeared to be benefiting from their coverage, their major health care needs and limited resources raise concerns that a package covering solely primary care falls short of providing adequate insurance. More than three-quarters of enrollees said they needed health services that were beyond the scope of their coverage. Further, compared with the Non-Traditional Medicaid enrollees, who have broader coverage and more limited cost sharing, they were more likely to report missing or postponing getting needed medical care because of cost or lack of coverage. When compared with national survey findings for adults with incomes below 150 percent of poverty, PCN enrollees’ reports of missing or delaying care were much higher than national rates for adults covered by Medicaid (36 percent versus 12 percent) and were closer to national rates for uninsured adults with incomes below 150 percent of poverty (29 percent).
http://content.healthaffairs.org/cgi/content/abstract/25/2/532
And…
Arkansas Set to Undertake a Novel Effort in Health Care
By Robert Pear
The New York Times
March 7, 2006
The Bush administration is poised to approve an innovative health insurance program, proposed by Arkansas, for 80,000 low-income uninsured people in the state, officials said Monday.
Arkansas will carry out the program, to be announced on Tuesday, under a waiver allowing the state to receive federal Medicaid money for coverage that does not meet the usual Medicaid standards for eligibility and benefits.
The employer-based program is novel in two ways. The benefit package is extremely limited, much more austere than Medicaid’s. In addition, if an employer wants to participate, it must guarantee that all its employees, regardless of income or other factors, will be covered.
People who sign up for the program will receive a basic benefit package covering six doctor visits a year, seven days of inpatient hospital care a year, two outpatient hospital procedures or emergency room visits a year and two prescription drugs a month.
Federal officials said the Arkansas program could be a model for other states that want to expand coverage without substantially increasing costs.
http://www.nytimes.com/2006/03/07/politics/07health.html?_r=1&oref=slogin
Comment: By Don McCanne, M.D.
Michael Leavitt, when he was governor of Utah, introduced innovative restructuring through the Medicaid waiver process that produced the plan described in the Health Affairs article above. The results of this study demonstrate that Leavitt’s innovative program resulted in beneficiaries missing or delaying care at rates comparable to the uninsured.
Now, as secretary of health and human services, Michael Leavitt is poised to approve the Medicaid waiver for Arkansas’ innovative program. What is particularly disconcerting is that this new innovation not only replicates to some extent the flawed plan adopted by Utah for low-income individuals, but this plan also establishes the principle that employees of small businesses are entitled only to the same, almost worthless coverage.
Unfortunately, our nation’s leaders have defined the problem as a need to reduce the numbers of uninsured, when the real problem is that we need to reduce the numbers who cannot afford access to health care. To expand insurance coverage without spending more, consumer-directed innovations are being used to shift more of the costs to patients. These Medicaid innovations establish an inverse relationship between income levels and the amount of cost shifted to the patients. Very low income patients are having almost all of the costs shifted to them.
In 2000, the World Health Organization ranked the United States 54th in the fairness of funding of our health care system. At least our administration will be able to show us an upward sloping curve as they graph out the growth of that number. Or maybe they’re looking at the inverse as they try to become # 1, the most inequitable system of all nations.