Volume 11 Number 222
Friday, November 17, 2006
ISSN 1091-4021

New recommendations for Medicaid changes from a federal advisory body drew criticism from groups representing low-income people and the disabled in Nov. 16 public testimony.

The critics said the recommendations would give too much authority to the states to change eligibility criteria and restrict certain benefits, may not do enough to eliminate the bias toward institutionalized care, and would hurt the lowest income, most impaired beneficiaries by allowing states to put this population in managed care plans.

The commenters spoke during the first day of a meeting of the Medicaid Commission, an advisory panel working on ideas for long-term savings for the Medicaid program. The panel is led by two former governors, Don Sundquist of Tennessee and Angus S. King Jr. of Maine.

The recommendations for Medicaid are contained in a chairman's mark and 18 amendments proposed by individual members. These proposals are set to be voted on by the Medicaid Commission on Nov. 17.

Financial Sustainability

The recommendations are aimed at promoting the long term financial sustainability of Medicaid, a state-federal health care program for low-income patients. The recommendations aim to promote individual responsibility and planning for long term care, through tax breaks and use of home equity; promote home and community based long term care; and promote information technology use in health care.

The proposals also seek to give states greater authority to design their Medicaid benefit, including allowing the states to allow other states' successful waiver programs with an abbreviated application process, and to set up separate eligibility criteria for various health services. They would also allow the states to streamline eligibility categories.

The ideas also call for greater quality and care coordination. For example, they call for a change to federal law to require states to place all beneficiaries in a coordinated system of care premised on a "medical home."

Dual Eligibles

The proposals support development and expansion of integrated, coordinated care of beneficiaries who are eligible for Medicaid and Medicare (the dual eligibles). They would also allow states to implement "Medicaid Advantage," a managed care program for the dual eligibles based on Medicare's managed care program. Such plans would have to offer core services, with the federal government monitoring these health plans.

One commenting group, the Center on Budget and Policy Priorities, called these recommendations on dual eligibles in managed care "the most troubling," according to a statement. The duals now are under a traditional fee-for-service arrangement. The proposal would have a private health care firm receive a set amount for each beneficiary to provide care, giving the plans an incentive to potentially skimp on care, the advocacy center said.

According to written comments, "the recommendations specify no minimum federal standard to protect [duals] from substandard health plans," CBPP said.

Although the recommendations would allow the duals to opt out of such plans, the CBPP said this is unlikely and that many would not be able to understand this option.

Flexibility

The CBPP also said the recommendations give states "far reaching and open ended flexibility" to change Medicaid benefits and eligibility, and allow states to offer different care to different groups, with virtually no federal protections, a concern echoed by a number of other commenters.

For instance, states could decide that certain populations are no longer eligible for inpatient care, based on their age, condition of health, or where they live, CBPP said.

Liz Savage, director of health and housing policy at The Arc and United Cerebral Palsy, also took issue with the benefit design flexibility being considered. "We are concerned that limited benefits packages that deny critical health services will not only adversely affect the well being of the beneficiary, but will result in the need for costlier care in the future," Savage said.

Parity

Another commenter, Sandra Hollis, whose son has Tourette Syndrome, testified that the recommendations should require parity for mental health treatments compared to other care.

A number of commenters expressed concern with proposed tax subsidies for purchase of LTC insurance. "Tax incentives best serve those with high incomes," said Marty Ford, director of legal advocacy at the Arc of the United States and United Cerebral Palsy. Ford said the incentives would not do enough to reduce dependence on the federal government to pay for LTC services. Instead, Ford advocated a study of another approach, called "social insurance."

John Lancaster, executive director of the National Council on Independent Living, said his group is disappointed that the recommendations "break little new ground" in the advancement of home and community based long-term care. Instead, his group supports an amendment to ensure that individuals get such care in the setting of their choice.

NCIL also asked the commission to reconsider its medical home model. Lancaster said this model "promotes an unfettered expansion of Medicaid managed care" lacking consumer safeguards and input.

State Demonstration Programs

Several meeting participants commented asked the commission to reconsider allowing states to use other states' demonstration programs by way of an abbreviated waiver process from the federal government. "The opportunity for key state and national stakeholders to provide input on waiver proposals is essential," according to the March of Dimes. A program's success in one state does not mean it can be easily replicated in another, the March of Dimes comment said.

The commission issued a report in September 2005 that offered recommendations on how to reduce Medicaid spending by $11 billion over a five-year period (No. 170 HCDR 9/2/05). The new round of meetings is aimed at longer-term solutions.

More information about the commission.

By Linda Micco Richmond