APRIL 13, 2012

Medicaid Flexibility: The Key to a Sustainable Safety Net

As we inch towards the state budget deadline, welfare spending reductions in Pennsylvania continue to be contentious. The reductions that are proposed concentrate on 20 percent of spending, since 80 percent is tied to Medicaid and state officials are barred by the feds from improving the quality or efficiency of the program.

Welfare spending is already outpacing personal income and state revenues; without changes, welfare spending is projected to grow 8 percent per year. How can we ensure sustainable welfare spending without harming those in need? By reforming the program driving the majority of the spending: Medicaid.

There is an effort to give states some control over Medicaid. Legislation recently introduced in the US House of Representatives, HR 4160, would create a Medicaid block grant, allowing states the freedom to design eligibility, benefits and coordinated care around the unique needs of their population. In exchange for this regulatory flexibility, Medicaid funding would be frozen at 2012 levels.

Getting rid of the current matching formula that rewards increases in state spending with additional federal funding (all from taxpayers) will go a long way in refocusing Medicaid benefits.

State Flexibility Act Endorsement Letter

posted by ELIZABETH STELLE | 03:55 PM | 0 comment

APRIL 9, 2012

Medicaid Waivers & the Looming Fiscal Crisis

In the waning days of 2008, the state of Rhode Island secured a global waiver for its Medicaid program. The waiver exempted the state from many federal rules and mandates in exchange for a five year spending cap of $12.1 billion. The architect of the waiver was then-Rhode Island Secretary of Health and Human Services Gary Alexander. He's now heading Pennsylvania's Department of Public Welfare.

A December 2011 study by the Lewin Group found Rhode Island's experiment is lowering spending and improving care. Patients are finding better access to doctors, reducing the need for expensive emergency room use. The savings total more than $55 million—not bad for a small state.

In the Wall Street Journal last week Sec. Alexander said taxpayers across the country could save $200 billion if every state followed Rhode Island's lead.

But unfortunately, the federal government won't allow other states to follow Rhode Island's lead. A cornerstone of President Obama's health care plan is to enroll even more Americans in Medicaid. Medicaid currently costs taxpayers more than $400 billion annually in federal and state spending. The surge in enrollment will force states to spend an estimated $118 billion more over the next decade—creating fiscal crises across the country. State governors recognize the desperate situation and have been asking for a Rhode Island-type alternative for nearly two years.

Congressman Todd Rokita from Indiana has introduced a block grant bill that would mimic Rhode Island's waiver and cap states' Medicaid and SCHIP funding at 2012 levels in exchange for regulatory flexibility. States should rally behind this legislation and continue to press upon the Obama Administration the necessity of state flexibility—it is essential if states want to continue to serve the neediest citizens without raising taxes.

posted by ELIZABETH STELLE | 10:38 AM | 0 comment

MARCH 30, 2012

Not Why I'm Here

"Why am I here?"  That's an excellent question to ask yourself if you work in Harrisburg.  This week, as I read a piece by Karen Langley in the Pittsburgh Post-Gazette, I found that question ("Why am I here?") was much needed.

Ms. Langley's article summarized a debate this week in the Pennsylvania Senate over a constitutional amendment that would bar imposing health insurance mandates in our state.  As she pointed out, there was a lengthy dispute regarding whether it was appropriate to use the term "Obamacare" on the floor.  Here's a moment she captured:

As the debate wore on, Mr. Scarnati, R-Jefferson, observed that spectators were likely "shaking their heads."

"We are consuming time arguing if we call it Obamacare," he said. "For goodness sake, people."

You could argue that Sen. Scarnati was answering my big question.  He was saying he isn't here to debate semantics.  Fair enough.

Let me give my own answer, though.  Here's why I'm here.  My wife and I decided to uproot our family two years ago and move back to our home state because I honestly believed that if we don't act quickly, the country our kids inherit is no longer going to be great—and that the best place to change that is in the states, not Washington, D.C., where we were living before.  I still believe that today.

What does that have to do with this week's Senate debate?  Everything.  Because when it comes to actually stopping one of the biggest attacks on our freedom ever, namely Obamacare, the problem with what happened this week wasn't the spat over semantics.  It is that as that same Post-Gazette piece points out, "As a constitutional amendment, the legislation would not take effect until passed by both chambers in two consecutive legislative sessions and approved by voters at the polls" (emphasis added).  In the meantime, the things that will actually determine the fate of Obamacare (mainly the U.S. Supreme Court's ruling this summer, the November election, and the ensuing debate in Congress) will occur while Pennsylvanians wait.

What happened in the Senate yesterday was essentially symbolic, at a time when our state and our nation are dying for leadership, for courage, and for tough choices—from both parties, both chambers, and all branches of government.  To borrow Sen. Scarnati's phrase, that is why I'm shaking my head. 

Yes, Sen. Scarnati's constitutional amendment would further solidify the Keystone State's opposition to Obamacare, but it would have little impact on Pennsylvanians today.  HB 42, however, sponsored by Rep. Matt Baker, would bar the individual mandate in state law without requiring the multi-year amendment process.

Not only that, we need much more from lawmakers than than just fighting bad federal policies.  We need them to dedicate just as much effort undoing decades of attacks on freedom here in Pennsylvania, in the form of skyrocketing spending, deepening debt, and forced attendance at failing, violent schools.

The issue isn't what we call the destructive public policies inflicted on our state and nation.  The issue is whether we are doing everything we possibly can about them, as quickly as we can, before the ship of state hits the iceberg we all clearly see ahead.

That's why I'm here.  What about you?

posted by CHARLES MITCHELL | 05:00 PM | 0 comment

MARCH 23, 2012

PPACA Will Put a Quarter of Pennsylvanians on Medicaid

There is no shortage of media coverage marking PPACA's two year anniversary, but one statistic from the Pennsylvania Department of Public Welfare did grab my attention:

Instead of reforming Medicaid, the law greatly expands the program, adding over 800,000 Pennsylvanians by 2019. By the time it is fully in effect, one in four Pennsylvanians will be on Medicaid [emphasis added].

Today, nearly 1 in 5 Pennsylvanians are enrolled in Medicaid, government insurance that provides terrible care with a huge price tag. Medicaid delivers episodic treatment, provides poor preventative care, offers sub-standard services to many beneficiaries and at times harms the poor.

For example:

• Only 45 percent of primary care physicians are willing to accept most or all new Medicaid patients that come through their doors.
• Medicaid patients use ERs about twice as often as the uninsured and privately insured.
• The likelihood of getting an appointment for a child to see an otolaryngologist (ear, nose and throat doctor) is 37 percent versus the private insurance rate of 100 percent.
• The odds of dying in the hospital following heart surgery are 6.2 percent for Medicaid patients versus 5.1 percent for uninsured and 1.5 percent for those with private insurance.

The whole idea behind PPACA was to make insurance affordable for every American. But what good is insurance if you have to drive hours to find a doctor and then receive worse care than the uninsured?

Throwing more Pennsylvanians into an expensive and failing system is not the answer. The answer is healthcare freedom, whether that's giving individuals and employers more choices by shopping across state lines and offering mandate-free plans, or encouraging consumers to take more control over their health dollars via Health Savings Accounts and list billing.

Pennsylvanians can't endure more people dependent on crummy and expensive government insurance.

posted by ELIZABETH STELLE | 04:50 PM | 0 comment

FEBRUARY 14, 2012

CF Joins More than 400 State Lawmakers in Brief on Health Care Law

The Commonwealth Foundation joined 17 other organizations and 333 state legislators from across the country in an amicus curiae brief challenging the constitutionality of the Affordable Care Act passed in 2010. An additional 100 state lawmakers signed a related brief.

The U.S. Supreme Court is scheduled to hear the case beginning March 27.

Below is a list of Pennsylvania lawmakers signing on to the brief. The commonwealth is one of 26 states party to the original lawsuit (Virginia filed a separate lawsuit), which is being appealed to the Supreme Court, after a federal court ruled the law unconstitutional.

posted by NATHAN BENEFIELD | 10:05 AM | 0 comment

DECEMBER 22, 2011

No Rush on Health Insurance Exchanges

In late November the Department of Insurance announced that Pennsylvania would begin implementing a state health insurance exchange as laid out in PPACA (the Patient Protection and Affordable Care Act). The judgment was made after a series of hearings around the state and a study conducted by KPMG.

There is little reason for the administration to rush to implement a state exchange until the Supreme Court decides the fate of PPACA. The next federal government deadline for implementation grants was recently extended from December 2011 to June 2012—after the Supreme Court is expected to rule on the constitutionality of PPACA.  If Obamacare is struck down, there is no reason to implement a government-run exchange.

A state health insurance exchange cannot be implemented without enabling legislation, and it doesn't appear that HB 627 or SB 940 are going to be a legislative priority anytime soon.

The following links contain good information about state exchanges:

• Should Missouri Create a Health Insurance Exchange?—Cato Institute (summary available here)
• Obamacare 'Exchange' Opposite of 'Free Market'—Mackinac Center
• Ten Reasons Why Arizona Must Reject Exchanges—Goldwater Institute
• Health Insurance Exchanges: What If They Issued 347 Pages of Regulations and Nobody Cared?— Pacific Research Institute
• Why Health Exchanges Don't Work— Pacific Research Institute

posted by ELIZABETH STELLE | 00:38 PM | 0 comment

DECEMBER 9, 2011

How Much Will Obamacare Cost You?

The federal health care overhaul will be paid for with spending cuts and an estimated $420 billion in new taxes. How much of that $420 billion will come out of your pocket? The Tax Foundation's new Health Care Tax calculator has the answer.

The calculator covers nine new taxes in the Patient Protection and Affordable Care Act—the Cadillac tax on generous policies, the 10 percent tanning tax, the tax on HSA disbursements, the medical devices tax and more—some of which don't kick in until 2018.

The calculator provides your total tax burden along with the burden for each individual tax. But that's not the total cost of the health care law. Creator Nick Kasprak explains;

. . .the impact of the individual and employer mandates, which are designed to change consumer behavior rather than raise revenue, need to be considered in addition to direct tax costs, as well as spending cuts to Medicare Advantage.

In other words, your calculated tax burden doesn't account for a variety of unintended consequences, such as an increase in premiums thanks to new mandates or the rise in Medicaid enrollment. While we now know what is in the bill, the full cost of PPACA is still unknown.

posted by ELIZABETH STELLE | 01:15 PM | 0 comment

SEPTEMBER 22, 2011

Changing the Incentives in Medicaid

Medicaid spending is set to skyrocket under the federal health care overhaul in the next two years, but it already consumes 31 percent of Pennsylvania's budget. It is no surprise that the Department of Public Welfare is looking for ways to make the program, known for providing expensive and low-quality care, more cost-effective.

Last week, Welfare Secretary Gary Alexander revealed the department is looking at a form of Reverse Health Savings Accounts for Medicaid beneficiaries.

We are looking at a model to save hundreds of millions of dollars by steering Medicaid beneficiaries to the most cost-effective settings. To reward beneficiaries we would give them some incentive. . . so if the state saves $1,000 on a medical procedure we may give the beneficiary $100 or $200 as a reward.

Reverse Health Savings Accounts encourage enrollees to use health care services more discriminately. For instance, beneficiaries would be rewarded for using a primary physician for non-life threatening illnesses instead of a hospital emergency room.

According to health experts, this specific approach has never been tried in a state before, but adjusting patient incentives so they use health care effectively is nothing new. We recommended this approach nearly three years ago. Unlike more comprehensive reforms, such as block grants or waivers, this reform is very achievable since it doesn't appear to need federal approval.

posted by ELIZABETH STELLE | 01:45 PM | 0 comment

MAY 19, 2011

Rescuing the States from Medicaid

State Medicaid spending has increased four times faster than elementary and secondary education spending and nine times faster than transportation spending over the past two decades. In Pennsylvania, Medicaid spending grew from 12 percent of the General Fund in 1980 to 24 percent in the proposed budget. Such growth is wreaking havoc on Pennsylvania's state budget and crowding out other priorities, like education.

The 2009 federal stimulus bill made the situation worse, by imposing new federal requirements that tied the hands of state officials and limited their ability to reform Medicaid. These regulations were set to expire in 2011, but the passage of Obamacare prolonged these mandates to 2013, leaving financially strapped states with two options, cut benefits or cut doctor reimbursements.

This is bad news for Medicaid patients who have a hard time finding a doctor. Half of all physicians refuse to accept new Medicaid patients. And when it comes to benefits, Medicaid claims are, on average, denied at three times the rate that of Medicare and private insurance.

Both houses of Congress have introduced a much needed remedy to this fiscal nightmare. The 2011 State Flexibility Act (SFA) is designed to give the states more autonomy over Medicaid spending. Last winter, Governor Corbett advocated for more Medicaid flexibility, writing, "The best ideas for improving Medicaid do not come from Washington - they come from the states."

Representatives Joe Pitts (PA-16) and Glenn Thompson (PA-5) are cosponsors of the House version of the bill. Allowing Pennsylvania to customize Medicaid will improve both the efficiency and quality of care.

posted by ELIZABETH STELLE, JONATHAN HUMMA | 05:40 PM | 0 comment