Medicaid is helpful and should be protected

Put the bat away

By Barb Rea
ESPC health policy volunteer

Advocates and providers who work with low income seniors and families and individuals with disabilities should be aware of what went on at the Wyoming Legislature’s Join t Labor, Health and Social Services Committee meeting May 9-10in Evanston.
I am concerned about the ongoing attacks on Medicaid and the Affordable Care Act and the misguided belief that we can reform health care without the aid of a strong federal partner.
On the bright side, new committee members are getting intensive education from experts on health care and health reform.
Other aspects of the committee’s work were not so bright. Committee Co-Chairman Sen. Charles Scott, R-Casper, felt the need to add his personal interpretation to almost every piece of information presented. He painted Medicaid as a perennial problem in the state, and assured the committee that the new federal health care law, which he dismissively terms “Obamacare,” will be repealed or at least defunded. He also continues to portray his pet project, Healthy Frontiers, as a viable program which could be used to replace both Medicaid and the benefits offered in the new legislation.
The truth is that Medicaid is an efficient way to provide health care to many low income, elderly, blind and disabled individuals in Wyoming. Like the promise we made to the elderly with Medicare, Medicaid is the promise we made as a nation to provide healthcare to the poor, disabled, blind and elderly. Individuals who qualify for this program are guaranteed the right to comprehensive healthcare.
We learned from the experts testifying at the meeting that the federal taxes we pay in Wyoming are essentially subsidizing low-income care in other states. Wyoming’s Medicaid program has always provided bare minimum services to the fewest people possible under federal law. Other states use the program to leverage more federal dollars into their healthcare systems and provide more health care for people who would otherwise depend on emergency rooms when they are ill or injured.
Our state leadership seems intent on making sure we provide fewer services and use more state money to do it, just to send a message to Washington that we can do this ourselves.
Senator Scott used every opportunity to imply, incorrectly, that Medicaid enrollees tend to overuse the system and are always trying to game the system to get more than their fair share—making Medicaid more expensive than private coverage. At one point he digressed at some length about rules which would hypothetically allow mothers to quit their jobs so their children can qualify for Medicaid. Then, Scott said, the mothers are able to go get their jobs back and their children go right on receiving health care, “and there is nothing we can do about it.”
Scott’s attitude was bolstered by the state’s new Director of the Department of Family Services, Steve Corsi, who made a stunning assertion that 30% to 40% of people who enroll in Medicaid in Wyoming, come dressed like he was (black suit and new haircut) and driving an Escalade, “and there is nothing we can do about it.”
Senator Scott let the committee’s disgust percolate until Wyoming’s Medicaid Director, Teri Green, was able to question the validity of Mr. Corsi’s numbers. Mr. Corsi later apologized for using an inflammatory example and a “guesstimate.”
Later we learned from another presenter, that nationally less than 10% of Medicaid payments are claimed fraudulently, and in Wyoming the figure is less than 6%. Moreover, research tells us most of the fraud by far (80%) is committed by providers (primarily medical-device and pharmaceutical companies). Less than 10% of the fraud is committed by patients. Click here to read Health Insurance Fraud: An Overview
National research verifies that Medicaid is far less expensive than private coverage, but Sen. Scott continues to cite numbers to the contrary, numbers that have never been publicly vetted and do not seem logical to the people who manage Medicaid. (See below for links to this research)
Rather than persistently portraying Medicaid as a problem, the committee should be looking at Medicaid as a key component to stabilizing the entire health care system. It will help ensure that everyone has insurance coverage. Complete coverage, in turn, is part of the solution to stabilizing the market by eliminating the cost shifting that occurs when the uninsured seek and receive emergency care.
Under the Affordable Care Act, Medicaid eligibility will be simplified and expanded so that it covers all low-income people who earn up to 133% of federal poverty level ($1207/month). The state will be responsible for part of the cost of care for about 6,000 Wyoming individuals who are currently eligible for Medicaid but have not applied. These people are probably not enrolled because they are healthy, so they are not expected to add a huge burden to the state budget. The expansion of the program to finally include all low-income adults will be almost entirely paid for by the federal government (100% till 2017 and dropping to 90% in 2020).
Does it really make sense to opt out so our tax dollars can go to other states?
Don’t we want our poor citizens and blind neighbors to have access to the healthcare they need when they need it?
If Medicaid were privatized, as Senator Scott seems to be advocating, those federal matching dollars would disappear, and the costs would be shifted to state and county budgets or to those who pay premiums for private insurance. We would be paying both federal taxes that don’t come back to Wyoming and higher premiums.
If we want to accept the federal match available under the Affordable Care Act, we will have to guarantee that we will provide a program in Wyoming that will be at least as strong as the Affordable Care Act. We will have to pass a law that provides comprehensive coverage to all our citizens. Would we be able to achieve this with a private insurance industry that has been pushing poor and sick people off their roles systematically for decades? This practice is the reason we had to develop Medicaid and Medicare in the first place. We need those public programs to make our system work, and we need them now more than ever.
If we want our Medicaid program to run more efficiently, we should just ask Tom Forslund, our new, capable Director of the Health Department, to make it so, not try to reinvent the wheel. Medicaid will be a big part of our state budget because it serves an important function for our friends and neighbors who need healthcare and for those who provide healthcare services. We should prepare for the larger numbers it will cover instead of pretending poor people’s healthcare needs can be legislated away.

Links to Medicaid vs. private insurance research
“Trends and Indicators in the Changing Health Care Market Place: Medicaid Payment per Enrollee by Acute and Long-Term Care, 2003 http://www.kff.org/insurance/7031/ti2004-1-15.cfm

“Trends and Indicators in the Changing Health Care Marketplace: National Prescription Drug Expenditures, Percent by Type of Payer, 1994-2004” Kaiser Family Foundation http://www.kff.org/insurance/7031/ti2004-1-16.cfm

“Comparison of Expenditures in Nongroup and Employer-Sponsored Insurance” Kaiser Family Foundation http://www.kff.org/insurance/snapshot/chcm111006oth.cfm

“MEPS Topics: Health Care Costs/Expenditures” Agency for Healthcare Research and Quality http://www.meps.ahrq.gov/mepsweb/data_stats/MEPS_topics.jsp?topicid=5Z-1

“Comparing Public and Private Health Insurance for Children” Center on Budget and Policy Priorities http://www.cbpp.org/files/5-11-07health.pdf

“Medicaid, Private Health Insurance and the Uninsured” John Holahan, The Urban Institute http://aspe.hhs.gov/medicaid/jan/Holahan.pdf

“Expanding Medicaid a Less Costly Way to cover More Low-Income Uninsured Than Expanding Private Insurance” Center on Budget and Policy Priorities http://www.cbpp.org/cms/index.cfm?fa=view&id=429

“Administrative costs on Health Plans: A systematic review of current studies” Deloitte Center for Health Solutions http://www.deloitte.com/view/en_US/us/Industries/health-plans/1fdbe665e4e06210VgnVCM200000bb42f00aRCRD.htm


Editor's note: Barb Rea is an ESPC volunteer and represents the organization in the coalition Consumer Advocates: Project Healthcare.

Equality in the Equality State

House may not bring up anti-equality amendment
Medicaid studies backed by House Labor, Health committee

By Sarah Gorin
ESPC researcher and lobbyist

The House leadership reportedly is considering the option of not bringing up SJ5 - Defense of marriage – constitutional amendment, for debate. SJ 5 proposes amending the Wyoming Constitution to say that only a marriage between a man and a woman is valid or recognized in Wyoming.

A proposed constitutional amendment requires a two-thirds vote, and apparently proponents do not have close to the 40 votes required to get the measure through the 60-member House. A debate will take hours, hours that will kill other bills waiting to be heard, and could well be futile if the votes are not there.

There are reports that the House leadership also does not want to add to the state’s fame on national television:

YouTube - Rachel Maddow- Wyoming anti-abortion bill advances

The House already has approved HB 74 – Validity of marriage, which recognizes marriage as a contract only between a male person and a female person, and not involving more than two parties. The bill also prohibits recognition of marriages or civil unions contracted in another state, if the relationship does not meet the above criteria.

HB 74 is awaiting debate in the Senate. We encourage readers to contact their Senators. Send a gentle, polite email message outlining your reasons for opposing the bill. The legislature’s Hotline enables you to leave a message asking your senator to vote no on HB 74. Be sure to leave your name and a telephone number for the senator to call you back should he or she be so inclined.

Health care still chronically ill …

ON Friday, the House Labor, Health and Social Services Committee heard and approved two bills relating to the Medicaid expansion contemplated by the federal Affordable Care Act (ACA).

Medicaid currently provides health care coverage for people in four categories, all low-income: the aged, blind and disabled; children; pregnant women; and caretaker adults. Under the ACA, Medicaid will be expanded to include everyone with incomes under 133% of the federal poverty level.

Those who already have insurance will be able to keep it. Everyone else with incomes above 133% of poverty will have the opportunity to purchase private health care coverage under state health insurance exchanges, which are supposed to provide transparency for the consumer. The federal government will provide subsidies to help pay premiums to those with incomes up to 400% of the federal poverty level.

The two bills considered and approved by the committee today look at two different aspects of the Medicaid expansion. SF 50 - Medicaid options study, will examine alternatives to Medicaid – e.g., can it be provided more cheaply in a different format?

SF 102 - Medicaid cost study, will look at the costs of the Medicaid expansion in its current form.

The committee discussion revealed a great deal of misinformation about the ACA, along with a fair amount of hostility. This seems to be spawned, at least in part, by frustration with the current Medicaid program, where costs continue to rise just like other health care costs.

The dense interconnectedness of health care costs will require some sustained attention from legislators. For example, Medicaid is undeniably a substantial source of funding to our state’s health institutions, nursing homes, county hospitals, pharmacies, and private medical providers.

While this is not justification for simply throwing money at all these entities, any significant reduction in Medicaid spending will adversely affect them and consequently the availability of medical care to Wyoming residents.

The Equality State Policy Center is a member of Consumer Advocates: Project Healthcare (CAPH), which is working to educate the public and decision-makers about the ACA and other health care proposals from the consumers’ point of view.

On February 22, CAPH will host an informational meeting for any and all interested parties about the new federal insurance pool for people with pre-existing conditions who have not been able to obtain coverage. Premiums for the Pre-existing Conditions Insurance Pool (PCIP) are significantly less than those for the state’s high-risk pool.

The meeting will be held from 1:30 p.m. to 3:30 p.m. at the Laramie County Public Library in Cheyenne.

Participate
Citizens can register their opinions on specific legislation by using the “Online Hotline” or the telephone Hotline – 1-866-966-8683 or, in Cheyenne, 777-8683.

Insurance companies battle health care reform regs

By Barb Rea

Editor's note: Barb Rea is Wyoming's consumer advocate to the National Association of Insurance Commissioners (NAIC). She is attending the NAIC quarterly meeting in Orlando, Fla. She also is volunteering on behalf of Consumer Advocates: Project Healthcare, a group of Wyoming advocates raising the consumer's voice in health care reform. The NAIC is crafting rules that will guide implementation of the the Affordable Care Act.


Health reform is not going to happen magically. The Affordable Care Act (ACA) established the framework for changing the system and now people are working hard to write the rules and regulations that will make it happen.

When you look at the details and the intent of the law, each piece is designed to move the insurance industry to change the way it does business. In exchange the industry will get more customers.

We are trying to move the insurance industry from making its money off risk selection (providing coverage only to healthy people) to one that competes on providing better value to its customers.

But it won’t be easy. For instance, one of the early reforms scheduled to begin Jan. 1, 2011, requires that insurance companies to spend more of your premium dollar on health care (80% in the individual market and 85% in the group market) and less on profit. This calculation is known as the Medical Loss Ratio.

And the companies have to prove they’re meeting the Medical Loss Ratio requirement. If they don’t reach this ratio, they have to give the money back to consumers in the form of a rebate. The law is requiring public transparency and accountability—new concepts in the insurance world.

The goal of this reform is not so much to get money back from the insurance company but rather to force the companies to price their products correctly.

Over the last 5 months the National Association of Insurance Commissioners (NAIC) has brought together consumer representatives, insurance commissioners and insurance company representatives to craft rules and regulations on the Medical Loss Ratio, as assigned to them through the new federal healthcare law. They have been conferencing sometimes daily to decide what numbers have to be reported and create a way to collect and report this information.

This week at NAIC’s quarterly meeting in Orlando, the final decisions on this topic will be made. As you can expect there has been considerable wrangling, with the industry trying to include as many items as possible in the medical expense side of the equation and as few as possible on the overhead side. The consumers won a good number of those battles but not all.

Now just days before this final vote, the industry is pushing for several last minute changes in the calculation of the Medical Loss Ratio. The changes essentially mean many companies would never have to pay a rebate (or change their pricing).

Here are the changes they seek:

• They want brokers’ commissions excluded from the equation;

• They want companies who sell in several states to be allowed to aggregate their numbers nationally, which would enable them to disguise high profits in one state by combining loss ratios from those states with loss ratios from other states where they may charge lower prices or pay higher health care costs;

• The industry also wants to change the actuarial formula previously adopted by the drafting group for evaluating compliance with the Medical Loss Ratio standard. Known as the “credibility adjustment,” the industry wants a change that favors insurance companies over consumers.

The implications are stunning. The industry can appear to be helping to transform the system but continues to try to get away with as much as possible to maintain “business as usual.” This is how they have made their fortunes and there is no reason to believe they won’t continue to behave that way.

Transparency and oversight are provided for in the ACA. To get this to work, we must be vigilant in monitoring the transformation of the health care system. If we don’t have citizens willing to take this job we are not going to move this to the finish line.

Health reform implementation

Health insurance reform moves to state policy arenas

The passage of health insurance reform certainly has stirred emotions here in Wyoming, where statewide candidates seem to be in a contest to see who can come up with the most frightening descriptions of it to justify their calls for repeal.

We see it as a major victory for Wyoming children and families.

The new law advances the financial security and personal health of Wyoming citizens. It delivers reliable coverage that won't disappear if they get sick or lose a job.

One of the chief advantages of the new law is the intent to cover everyone. The law prohibits insurers from refusing coverage because of pre-existing conditions and it enables families to keep their children on their policies through age 26.

The requirement that insurance companies spend at least 85% of their revenues on the health care of their customers likewise is positive and is representative of the law's intent to bring some sunshine into a system that for too long has been, shall we say, less than transparent. More transparency is critical to controlling costs and improving the quality of care.

Barb Rea, the ESPC's part-time development director, served on the Wyoming Healthcare Commission for several years as an appointee of Gov. Dave Freudenthal. That service and her own studies have given her a broad knowledge of the issues involved in reforming health care. We asked her to represent the ESPC on the National Association of Insurance Commissioners’ consumer liaison committee. The NAIC will be instrumental in designing the rules under which the states will implement the new health insurance reform legislation.

Rea recently attended the NAIC meeting in Denver and offered the following observations:

I have just returned from the spring meeting of the National Association of Insurance Commissioners (NAIC) as one of several new consumer representatives serving on consumer liaison committee. This organization and this committee will play an important role as we begin implementation of health reform legislation.

Wendell Potter, posts an excellent summary of this meeting and the role of the NAIC in the Huffington Post which you can read here.

The short version is that the states will be responsible for much of the work of implementing the new health reform bill. The law requires that many new regulations be written to govern the way health insurers do business. This work will fall to not only to the U.S. Department of Health and Human Services but also to the National Association of Insurance Commissioners (NAIC).

The NAIC exists to help state insurance regulators achieve five primary goals:

• protect the public interest;
• promote competitive markets;
• facilitate the fair and equitable treatment of insurance consumers;
• promote the reliability, solvency and financial solidity of insurance institutions;
• and support and improve the state regulation of insurance.
  

So, the NAIC will play an important role in developing standards that both protect consumers and promote uniformity throughout the industry. Many of these laws, regulations and/or rules developed on the federal level will then be modified and adopted at the state level to give states the authority to enforce them.

There is no time to waste – many need to be in place within the next 6-12 months. So much of our time was spent determining how to ensure that the consumer perspective was going to be represented as the NAIC moves forward.

The NAIC executive committee stated its intention to utilize its existing committees to complete these responsibilities. The role the consumer liaison committee will play is still not clear. The consumer liaison committee specifically asked the NAIC:

1. to create a publicly accessible “plan of action” developed with input from consumer representatives;
2. to fully incorporate consumer advocates into the NAIC health reform work plan;
3. to prioritize their tasks based on the needs of the consumers;
4. and to significantly expand consumer participation at the NAIC proceedings.
   

While we await a response from the governing board of the NAIC, the consumer liaison committee will begin immediately to assess our resources and organize into work groups around the most urgent issues:

• High risk pools;
• Grants for establishing ombudsmen offices to assist consumers in every state;
• Medical Loss Ratio (MLR);
• Rate reviews;
• New insurance policy requirements (e.g.) pre existing conditions, keeping young adults on parent policies, first dollar coverage for prevention.
  

Next steps for Wyoming and the ESPC
It was humbling to be among such knowledgeable and effective colleagues, many of whom have been working on reform for most of their careers. We certainly have a lot to gain as this process will provide both context and product for much of the decision-making that will fall to our legislature. It should make their job easier.

But, it soon became clear to me that the process of implementing anything at a state level here (or in any other state already fighting the intent of this law) was going to be more complicated than cutting and pasting good ideas into Wyoming law. Our first task will be to cut through the rhetoric and talk about how the new law addresses the health care access problems people are facing.

Keep it affordable, please

Check out this analysis of pending health insurance legislation provided by the Economic Policy Insitute, www.epi.org:

Cutting Health Insurance Subsidies
Would Hurt Wyoming Families

In Wyoming, the median income for an average family of four is $77,432 and the projected family health insurance premium in the proposed new national marketplace (to be implemented under Congressional reform proposals) is $13,230.

If premium subsidies are cut from 400% of the federal poverty line to 300%, as politicians in the House of Representatives and in the Senate have proposed, many Wyoming residents may not be able to purchase health insurance.

With the subsidy proposed in current House of Representatives legislation, the median family of four in Wyoming would receive $5,299 a year to help them purchase insurance in the new insurance exchange.

By cutting eligibility to 300% of the federal poverty line, about 82,884 individuals in Wyoming stand to lose support.

Nationally, about 42 million individuals (or 14.3% of the population) are between 300-400% of the federal poverty line and thus stand to be affected by a cut in eligibility. The lost subsidy for these families averages $5,000 per year, meaning that the median family would be forced to spend 19% of their income on premiums. This analysis likely understates the problem because it only looks at insurance premiums, and not total out-of-pocket medical expenses.

Slashing subsidies to lower the price of reform undermines the fundamental point of reform—to make health insurance more, not less, accessible and affordable.

Wyoming families ought to ensure that their politicians make reform affordable for middle-class households.

More information can be found in the EPI Issue Brief #261
(“Expanded Subsidies are Essential to Health Reform”), available online at
http://www.epi.org/page/-/pdf/ib261.pdf.

Hopeful step for health care

Senate Labor considers measure expanding KidCare

Sen. Mike Massie’s children’s health insurance bill, Senate File 39, will be considered Wednesday in the Senate Labor, Health and Social Services Committee - assuming poor weather does not shut down the Capitol. The hearing begins at 8 a.m.

The ESPC sees this measure as part of a “building block” plan for achieving health insurance for all Americans by using existing private and public group health insurance. The Building Blocks framework allows many insured people to continue as they are, but creates more options for small business and individuals.

One of the key building blocks in Wyoming is the KidCare CHIP program. Wyoming KidCare Chip is a public-private partnership providing health insurance coverage for children through age 18 living in households with too much income to qualify for Medicaid, but not enough to purchase health insurance.

Senate File 39 bill extends eligibility for the program to children in Wyoming families who have incomes up to 300% of the federal poverty level. Eligibility currently is restricted to children in families whose income does not exceed 200% of the federal poverty level. The bill also extends coverage to parents of qualifying children, though that number is limited.

The bill contains an appropriation of $390,000 to fund the FY2010 expansion. The fiscal note on the bill foresees spending about $1.2 million in 2011 and about $2.1 million in 2012 for a maximum of 3,720 enrollees.

You can read the ESPC description of the bill here.

Like Lazarus, the Speaker’s property tax bill rises

After being killed on Friday, January 23rd, HB 87 rose from the dead on Monday the 26th, when sponsor and House Speaker Colin Simpson asked the Revenue Committee to hear it again on the grounds he hadn't been there to present the bill Jan. 23.

Speaker Simpson came to the Friday committee meeting but had to leave; the bill was presented by Sen. Eli Bebout, a co-sponsor, who was at the committee meeting for another bill. Four members of the House Revenue Committee -- Reps. Amy Edmonds (R-H12, Cheyenne), David Miller (R-H55, Riverton), Owen Petersen (R-H19, Mountain View) and Mark Semlek (R-H1, Moorcroft) -- changed their Jan. 23 No votes to Yes on Monday.

Thus the 3-6 tally from last Friday became a 7-2 majority in favor of the bill. It was re-referred to Appropriations, where it will be heard on Wednesday along with the homestead exemption bill (HB 68).

The ESPC has urged members of the House Appropriations Committee to consider the options for property tax relief carefully. As supporters of responsible fiscal policy, legislators must take care to protect the state’s revenue sources. And a broad base of resources means that the state will be less susceptible to pressure from the state’s biggest taxpayers: the minerals extraction industry.

Wyoming residents already receive government programs and services worth far more than they pay for through property and sales taxes. It’s appropriate that we benefit now from the mineral bounty the state enjoys.

But it also is important to recognize the link between tax investments and good schools, roads, business-ready communities, and needed social services. Moreover, Wyoming residents pay lower taxes on their property than residents of other states. Any legitimate concerns with the residential valuation process should be addressed there and not indirectly through tax rates.

If the Appropriations Committee desires to forward a property tax reduction bill, the ESPC favors bringing out HB 68, the homestead exemption, for two simple reasons: (1) the fiscal impact is dealt with up front; and (2) the tax reduction is tilted toward lower-value homes, whose occupants are more likely to be suffering in the current economic downturn.

Neither argument holds true for HB 87. It enacts a permanent property tax reduction without regard for future economic conditions. It includes provisions to protect local government for only one year, after which the revenue losses will affect local governments significantly. It provides the same percentage reduction to all homeowners, even those not facing economic difficulties.