Tag: "Medicaid"

Medicaid Block Grants = Unconstitutional Coercion?

Professors Sara Rosenbaum and Timothy Westmoreland have an interesting opinion piece in the New England Journal of Medicine with a curious response to the proposal that federal Medicaid funding should be re-structured as block grants (via the Patient CARE Act, proposed by some Congressional Republicans).

It is a pretty well established Republican proposal. It falls short of NCPA’s proposal to convert federal subsidies for health care into refundable tax credits. Nevertheless, it removes the perverse incentive for states to ramp up Medicaid spending beyond what is necessary to pull down more federal funds. In the current system, a state that spends one more dollar on Medicaid will attract between one and nine more federal dollars. This causes states to spend themselves into penury to recover federal dollars.

Ms. Rosenbaum and Mr. Westmoreland suggest that the same Supreme Court that ruled Obamacare’s expansion of Medicaid unconstitutional would do the same for block grants:

Churn: Data Lacking on Critical Question

The media and most health policy wonks focus only on the number of insured versus uninsured people. They don’t really care if people are enrolled in Medicaid, Medicare, Obamacare plans, employer-based benefits, or whatever. As long as the percentage insured goes up, they are satisfied.

One of the problems this disguises is “churn” – people moving between different types of coverage, which leads to disrupted care. It is something that Obamacare surely makes worse, by introducing a new type of coverage for people within a certain range of income.

However, the people in charge of the new system are almost completely ignoring this problem, according to Modern Healthcare:

Experts say churn can be disruptive to people’s continuity of benefits and healthcare, particularly if they have medical conditions for which they are receiving treatment. In addition, it can be harder for people to access healthcare providers, particularly specialists, if they switch to Medicaid, which often pays lower rates.

“For a patient under a physician’s care for a condition like cancer or renal failure, changing providers in the midst of chemotherapy or dialysis can be incredibly disruptive,” said Chris Stenrud, executive director of government relations at Kaiser Permanente.

A CMS spokesman said no data on churning between private plans and Medicaid were available for the nearly three dozen states using the federal marketplace. But a committee of health plans selling products on the federal exchange that has been tracking the trend has noted a small but steady exodus from exchange plans. The committee, however, could not determine whether the people exiting the exchange plans were transitioned to Medicaid or employer coverage or became uninsured.

The solution to churn is a refundable, universal tax credit that allows people to buy health insurance of their own choosing, and getting rid of the artificially fragmented market that Obamacare has made worse.

Medicaid Expansion Already Blowing Budgets

The Foundation for Government Accountability has examined every Medicaid expansion state with enrollment data available. The report:

discovered a systemic problem of under-projection and over-enrollment. The proponents of expansion have an incentive to keep their projections low when selling the massive welfare expansion to state lawmakers and the public, so the program appears less expensive than it really is.

The five states with the worst differences between projections and actual enrollment:

1) California’s enrollment more than doubled projections at 120 percent above projections.

2) Nevada missed the mark with enrollment, hitting 113 percent above projections.

3) Washington enrolled more than half a million people, exploding projections by 104 percent above projections.

4) Kentucky’s enrollment doubled projections in the first year by 100 percent above projections, costing taxpayers $1.8 billion more in the next fiscal year.

5) Illinois enrolled more than 600,000, exceeding projections by 83 percent above projections, raising the cost to taxpayers by $800 million.

Administration Plays “Medicaid Hardball” With Holdout States

Obamacare was supposed to dramatically increase Medicaid dependency in exchange for reducing some direct federal funding of hospitals. Now, some governors of states that rejected Obamacare’s Medicaid expansion are reacting negatively to the federal government’s cutting back hospital funding.

Governor Rick Scott of Florida is suing the federal government for proposing to cut Low-Income Pool (LIP) funding to hospitals, which he describes as retaliation for the state rejecting Medicaid expansion. Now, it looks like the Administration is issuing the same threat to Texas.

It is not clear why the Administration cares whether federal money sent to a state for health care is sent to Medicaid or directly to hospitals.

NCPA’s long-standing proposal for a universal, refundable tax credit addresses the issue as follows: If people do not claim the tax credit for health insurance, it gets sent to a safety-net facility where they reside. We haven’t gone deep into the details of how that gets executed. Although, my latest proposal is that all federal funding for welfare be bundled into unified Opportunity Grants

Obamacare’s Medicaid Expansion Does Less Than It Claims

I am still playing whack-a-mole with journalists and others who keep confusing Medicaid with health insurance. The latest is the coverage of the Urban Institute’s latest Health Reform Monitoring Survey. The Hill reported it as” “Uninsured rate falls by half in states that expanded Medicaid”.

Imagine if a state expanded cash welfare payments versus its neighbors. The media would report that the number of people reporting no cash income had dropped faster in that state, despite creating no jobs.

28 Percent of Federal Taxes Go To Health Care

27.49 percent, actually. Weekly Standard’s Jeryl Bier used the White House’s own calculator to figure this out. The trend is not our friend:

In 2010, the year Obamacare passed and was signed into law, the healthcare percentage was 24.10. The following year, 2011, it dropped to 23.7 percent, and in 2012 dropped still further to 22.45 percent. After this, however, the trend sharply reversed. In 2013 the healthcare share jumped to 25.19 percent, and the latest numbers posted this week for 2014 show the highest proportion yet at 27.49 percent, a full 22 percent increase over 2012.

Why Are So Many Working-Age People On Medicare Since Obamacare Started?

Gallup has released the full results of its first quarter survey of health insurance. It concludes that the proportion of uninsured Americans has collapsed to the lowest level ever – 11.9 percent.

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The early release of the estimate had predicted 12.3 percent, and it got a little better as the dust has settled on the second open season.

Medicaid Managed Care Pharmacy Costs 15 Percent Less Than Fee-For-Service

vbnAmerica’s Health Insurance Plans (AHIP), the main trade association for health plans, has released research comparing pharmacy costs in states where Medicaid pharmacy benefits are “carved in” versus “carved out.”

“Carved in” means that a managed care organization manages the benefit. “Carved out” means the Medicaid bureaucracy manages it directly. The latter costs a lot more:

  • Across 28 states using the carve-in model, the net cost per prescription was 14.6%lower than the average net cost per prescription in states not carving in pharmacy.
  • This 14.6% differential created a $2.06 billion net savings in state and federal expenditures in FFY2014 for states deploying the carve-in model.
  • The seven carve-out states had a 20% increase in net costs per prescription from FFY2011-FFY2014 — in stark contrast to the 1% increase in net costs per prescription experienced by the 6 states that recently switched from a carve-out to a carve-in model.
  • The seven carve-out states “missed” a total of $307 million in savings in FFY2014 which would have occurred had they used a carve-in model.

Churn, Churn, Churn: Measuring the Cost of Fragmented Coverage

F1Low-income Americans face bewildering bureaucratic requirements when they try to obtain welfare benefits. One of the challenges is that they have to frequently re-apply for benefits because the state needs to know whether their incomes are still low enough form them to remain eligible. This moving in and out of benefits is called churn, and Dottie Rosenbaum of the left-wing Center for Budget and Policy Priorities has written an interesting paper discussing the challenges in measuring and understanding it:

States renew Medicaid and CHIP eligibility once a year, as federal rules require, and federal rules have changed to require a minimum eligibility period of 12 months for child care. Many states still review SNAP eligibility every six months……

States are allowed to recertify eligibility of elderly and disabled households for SNAP every 24 months.

There is trade-off here: If people have too much hassle re-applying for fragmented benefits they might not get them and that will cost taxpayers more down the road. On the other hand, welfare that depends on income demands some burden of re-certifying eligibility on the recipient.

NCPA recently published an analysis of the bewildering array of federally funded safety-net programs, and recommended that state, local, and civic agencies be able to apply for block grants that consolidate funding from multiple programs. This would also reduce the challenge of churn, as applicants would be able to re-certify eligibility at one agency.

The GOP’s Proposed Budgets’ Effect on Medicare and Medicaid

Today’s appalling vote in favor of a so-called Medicare doc fix that will increase the deficit by $141 billion makes it hard to take the House and Senate budget resolutions seriously. Nevertheless, they have a lot of positive reform in them. Sean Parnell of the Heartland Institute interviewed me for the Heartland Institute’s podcast.

The interview happened a few days ago, before we knew that almost all House Republicans were about to vote to endorse Obamacare’s vision of controlling Medicare by federalizing the practice of medicine. Nevertheless, if the Republicans ever re-gather their bearings. maybe they will move their budget forward.

Hear the entire podcast here.