Monday, February 28, 2011

Medicaid News, Notes, and Nuggets

Several items of note this morning regarding Medicaid, and specifically the discussions regarding same at the National Governors Association meetings over the weekend, at which governors of both parties requested flexibility from Washington regarding the federally-imposed mandates on the Medicaid program:

  • A Wall Street Journal article noted that Washington state – headed by Democrat Gov. Christine Gregoire – “wants flexibility in the rates its [sic] pays health care providers that treat Medicaid patients, the services it offers, and its eligibility requirements.”  Unfortunately, however, Washington, DC seems disinclined to give Washington state – or other states, for that matter – the flexibility they seek.  In fact, a recent article indicated that federal officials are considering placing MORE restrictions on state Medicaid programs – specifically, new mandates related to reimbursement levels – rather than fewer burdensome orders coming from Washington.
  • While Washington bureaucrats have thus far declined to grant waivers regarding the Medicaid maintenance of effort requirements in the health care law, the Administration has already granted over 900 waivers to various private plans – including many union plans – to allow them to continue offering coverage.  It does raise the question:  Why will the Administration waive one part of the law to help unions, while not waiving other requirements when doing so could assist financially struggling states?
  • Mississippi Governor Haley Barbour, noting that his state’s high-risk pool for chronically ill individuals has 3,500 participants – compared to only 12,000 enrollees nationwide for the new federal program created under the health care law – observed that the sizable enrollment in the state-based pool compared to its federal counterpart demonstrates why states should be granted more flexibility to manage their Medicaid programs as they see fit.
  • The American Action Forum released an interesting policy brief outlining some possible solutions for states to achieve savings from their Medicaid programs.  Several of these solutions will require flexibility from Washington however, meaning that Secretary Sebelius and HHS should help governors help themselves in giving states the tools they need – and are asking for – to contain costs in their skyrocketing Medicaid programs.

The 2010 actuarial report on Medicaid’s financial condition – quietly released the week before Christmas – demonstrates the difficult task states face in trying to contain the spiraling costs of their Medicaid programs.  The report projects that spending on Medicaid will rise by 8.3 percent per year over the coming decade – a growth rate 3.2 percentage points higher than projected GDP growth, and higher than the Medicaid program’s growth over the previous 15 years (1994-2009).  Moreover, administrative costs associated with the health care law will impose an additional $12 billion burden on states – over and above the $60 billion in direct coverage costs that the Congressional Budget Office recently found the states will be forced to bear.

Medicaid already provides health care to one in five Americans, and states are struggling mightily to meet those challenges in a difficult fiscal environment.  States need more flexibility and fewer mandates from Washington to manage their programs – not federal bureaucrats forcing states to maintain, and then expand, their broken Medicaid systems to prop up Democrats’ creaky health “reform.”