Medicaid in Puerto Rico

Following the devastation of hurricane Maria in Puerto Rico, attention has been paid to helping the territory recover. One of the facts that has largely been under reported is the island’s Medicaid program. Nearly half (46 percent) of all Puerto Ricans are covered by the territory’s Medicaid program. This week, the Hill reported that if funding issues aren’t resolved for the Medicaid program approximately 900,000 residents will be cut from the program.

Puerto Rico uses essentially a block grant from the federal government to fund its Medicaid program. This means that the federal government provides a certain fixed amount and the territory will pay for the remaining funds. Under normal circumstances the territory would reduce benefits or eligibility in order to meet their program costs. As is obvious, residents were devastated and many people are in need of health care services following the major hurricane that hit Puerto Rico. This means many more will likely qualify for Medicaid because of an increase in poverty in the state and many more will need services because of the health effects of the hurricane. Vikki Wachino and Tim Gronniger explain why block grants in Medicaid have hurt the island in their recent Health Affairs blog.

Rather than providing an aide package to Puerto Rico alone, a $1 billion increase in Medicaid funding was added to the CHIP reauthorization package. The House has stalled their passage of the CHIP reauthorization because their bill included many pay fors that were partisan and had more to do with the repeal of various provisions of the Affordable Care Act than the reauthorization of the CHIP program. The Senate did not include pay fors in their version of the bill. Congress passed a disaster relief bill in recent days that did not include additional funding for the Medicaid program. As of now that is still tied to the CHIP reauthorization.

It appears that the CHIP reauthorization is becoming the main vehicle for health related legislation. Keeping the Puerto Rican Medicaid program available to residents while the island works to recover from the hurricane now looks tied to funding for the health insurance for 9 million kids.

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The IMD Exclusion’s Days Look Numbered

The National Association of Attorneys General recently released a letter from 39 Attorneys General that advocates for the removal of the prohibition on reimbursement for Institutions for Mental Disease (IMDs). This letter was signed by some of the most progressive Attorneys General such as Maura Healey of Massachusetts as well as some of the most conservative Mike Hunter of Oklahoma, who recently replaced Scott Pruitt who joined the Trump Administration to head the EPA.

The policy that they are advocating for make sense on the face of it but whether it is effective in the end is less known. IMDs help provide treatment for people with drug addiction. Medicaid cannot pay for these services out of an artifact of history. States had historically paid for these programs and a main concern of the architects of the Medicaid program was to not replace existing state programs. Had we started out with a health care system that had Medicaid as the primary state medical service from the beginning these services would likely have been included.

However they do not provide the counseling and community supports that are shown to be effective in rehabilitation and maintenance of a life without addiction. One concern with putting addiction recovery in the hands of the health care system and away from the community is that funds directed to community engagement projects will be eliminated. Medical systems have not historically shown good results with tracking patients through their recovery outside of the hospital.

Secondly, it’s unknown how much this policy change would impact care. The Obama Administration changed the requirements for managed care plans to allow certain reimbursement for IMD facilities through managed care programs. Since managed care is now the primary way Medicaid provides health care services for beneficiaries, for 77 percent of beneficiaries, these services are already reimbursed. Further, the populations that don’t receive managed care are primarily the elderly and disabled. It’s important here to note that the IMD exclusion only applies to those under the age of 64. This means that few people are subject to the IMD exclusion as compared to 5 years ago.

Further, in 2015 the Centers for Medicare & Medicaid Services (CMS) released a letter to states outlining ways that states could use Section 1115 waiver authority to expand coverage for IMD services through their Medicaid programs to individuals that would be subject to the restrictions.

Essentially, every state already has the authority to give their Medicaid beneficiaries access to IMD services either through a waiver or through their managed care entities. While receiving coverage in an institution may be the correct method of treatment for some individuals, it is not a silver bullet to provide care for all people needing treatment for opioid dependency. In fact, the original reason for instituting the ban on payment for these services must be remembered. Addiction is not a disease that we can cure with medicine and institutionalize treatment alone. While the services provided in IMDs are important, so are community based counseling and even more so addressing the underlying causes of addiction. These more than a single policy change could help us stem the opioid crisis.

Medicaid-for-All receives boost from gubernatorial candidate

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Local Coloradans thinking about Medicaid-for-All undoubtedly

Colorado’s crowded Democratic governor’s race has seen one candidate distinguish herself from her competitors based on her health care policy. Cary Kennedy, the former state treasurer, came out in support of a Medicaid-for-All platform.

The plan would essentially allow Colorado residents to purchase Medicaid coverage. Since Medicaid costs significantly less than private and other public insurers, Kennedy argues this will keep cost down. The way Medicaid keeps costs down primarily is by reimbursing providers at lower rates. However, the program is also largely run by managed care plans that place limits on excessive utilization and narrow networks. Colorado has several counties with a limited number of plans available in the Exchange market. This plan would provide an additional plan offering for these consumers.

This plan follows the Nevada “Sprinklecare” proposal released earlier this year and the proposal by Senator Schatz earlier this summer. While Medicaid-for-All hasn’t seen such publicity before, d it was briefly discussed as a potential option for a public plan in 2009/2010. The thought that likely ended that conversation was that it didn’t have the public backing that Medicare had. It’s clear the idea is gaining momentum now, in part due to the strong show of public support resulting from the repeal debate this year.

ABLE Accounts

The ABLE Act was passed in 2014 and allows states to start a program that would allow certain people with disabilities to open tax-exempt savings accounts. Last week, CMS released guidance on how this law interacts with state Medicaid programs.

The law is designed to allow certain people with disabilities to save money and use their savings on services and expenses to maintain their quality of life, maintain health, independence and quality of life. The program is not meant to supplant existing programs and notably missing is language that calls for improvements in people’s lives. One key part of this account is that these funds cannot be counted as resources or assets for determining a person’s Medicaid eligibility. The earnings and interest gained on these accounts would not be counted for income purposes. States can use the funds to account for estate recovery after the beneficiary has died. This could potentially reduce the problems associated with transfer of assets and selling of houses by disabled beneficiaries in an effort to protect assets from estate recovery policies. The benefit is only available to people who have had a diagnosed disability and eligible for SSDI prior to the age of 26 and living in a state with an ABLE program. This is a limited group of beneficiaries and exempts many different types of working disabled adults.

Medicaid and SSDI benefits exist to assist people who need the safety net of assistance. In these safety nets we should provide a pathway to improve their quality of life and assist them to be able to receive better health and independence. This program improves the existing reality for many disabled adults, however there is more to be done to ensure that more people are able to live at their highest quality of life with independence. Medicaid is a pathway to improving lives for many but there are many barriers to prevent people from reaching opportunities they could achieve.

Medicaid is already flexible: part 2538925729

In the continuing series on this blog we will examine how Medicaid already contains significant flexibilities that allow states to tailor their programs to the needs of the state and respond to emerging issues.

This time- responding to the opioid epidemic. In January 2016, CMS released a letter to states outlining the existing flexibilities and new flexibilities states could use to provide benefits to Medicaid eligible residents in their states. Anna Gorman at Kaiser Health News has a nice piece out about what California’s project looks like and how it’s impacting people. Virginia, Massachusetts, and Maryland have expanded treatment using these flexibilities and West Virginia and Michigan are pursuing waivers from the federal government.

These flexibilities and waivers were executed using existing Medicaid flexibilities and CMS encouraged states to apply using the specific flexibilities. This will hopefully bring more care to people with opioid addiction and help turn the tide of our crisis in America.

Medicaid is insurance

maineMaine is in the process of proposing Medicaid expansion on their November ballot. This initiative would expand Medicaid to those earning less than 138 percent of the federal poverty level (FPL) and fulfill the six attempts of the Maine legislature to pass the expansion bill, consistently blocked by LaPage’s veto. Maine initiative law prevents the governor from vetoing the publicly passed legislation.

Last month, Republican legislators began pushing for the Medicaid program to be called “welfare” rather than insurance. Governor LePage has been pushing for the same change last week. Today it was just announced that the language on November’s ballot question would not contain the words welfare, entitlement, or insurance. There are several ways to analyze the claim that Medicaid is not insurance but welfare and by all of these methods, Medicaid meets the definition of insurance.

First, looking at the dictionary definition of insurance Merriam Webster defines insurance as, “coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specific contingency or peril.” The one party in the case of Medicaid would be the government. Some point to a definition of insurance as one requiring a premium or payment in return for a service. The underlying assumption in this definition is that Medicaid beneficiaries do not pay taxes. Medicaid beneficiaries, especially those that earn taxable income who would gain Medicaid expansion, do pay taxes whether that is income taxes or sales taxes that fund state and local services.

Further, Medicaid is often not a free service. Many Medicaid beneficiaries are required to pay cost sharing for health care services. Under existing law states are permitted to charge certain Medicaid populations limited amounts for services. Several states have taken advantage of Section 1115 waiver authority to extend these limits to require greater cost sharing from lower income groups. In many ways states are moving to treat Medicaid as a private insurance program rather than welfare program. Over 70 percent of beneficiaries are under private insurers policies. In states like Arkansas, Medicaid expansion is nearly indistinguishable from private plans for beneficiaries.

Second, looking at the impact of Medicaid on a beneficiary’s financial protection. Studies that look at Medicaid’s impact on beneficiaries vary on many of the health impacts but they consistently find that people who gain Medicaid coverage benefit in every financial indicator whether that be fewer bankruptcies to less borrowing for medical expenses. The point of having insurance for anything, a car, a house, or one’s life is to financially protect a person when they need to spend a substantial amount of their resources on that expense. Medicaid has been shown time and time again to protect people from incurring financial strain from both catastrophic health problems and from the regular expenses that are necessary to promote health.

Why is this exceptionally important? Looking back at the RAND health insurance experiment from the 1970s found that added cost-sharing for medical expenses did not decrease health indicators for people with medium and high levels of wealth, but health indicators decreased for low-income beneficiaries. This means that low-income people are likely to forgo necessary treatment when faced with financial obligation and that payment for care presents a significant burden to care. This supports the idea that Medicaid is insurance because like insurance plans that offer low cost sharing, Medicaid reduces the cost of coverage and ensures health isn’t harmed. Just because Medicaid is often a free or low cost program for beneficiaries does not indicate that it is a welfare program. Rather it indicates that it is the appropriate level of cost sharing for the population receiving the insurance program to maintain health.

Third, Medicaid has been delinked from welfare. In 1996 as part of the welfare reforms, Medicaid eligibility was delinked from welfare allowing people who are not welfare eligible sign on to the program. This in turn allowed for states to begin to experiment with higher eligibility levels for childless adults who were previously ineligible because they did not meet welfare eligibility standards. The Medicaid expansion fits the mold of these de-linked programs. The people who are eligible for Medicaid expansion are oftentimes not eligible for welfare programs.

So why have we not agreed what insurance looks like? There are many reasons one of which is car insurance. Most people’s main interaction with the insurance system is to buy an insurance product for expensive items like their car or home. These items that are insured are often considered luxury items and the costs associated with insuring them are a result of the decision to purchase a car. Chances are people also view the insurance as a product that is purchased to protect a person against the high cost of catastrophic expenses, rather than routine maintenance. Health is different. Routine care is often unaffordable and caring for one’s health is not a luxury. In the same way, insurance can come in different forms. In it’s core, insurance must protect people against financial distress. Redefining insurance as a private market product neglects the history of public sector insurance and doesn’t account with the current Medicaid program.

Meanwhile in South Carolina

Last week South Carolina Governor Henry McMaster instructed his Medicaid office to ask CMS for permission to exclude abortion clinics from Medicaid reimbursements and family planning clinics within 25 miles of an abortion facility from Medicaid payment. Currently, the federal Medicaid program will pay for abortion services in cases of rape, incest, or the life of the mother is at stake. Federal money will not pay for other cases of abortion. This proposal seems to go beyond that limit. The provision about family planning centers seems to be a direct target on Planned Parenthood facilities, since they are often located in urban areas where abortion clinics would be present. In South Carolina, the facilities are located in Charlestown and Columbia, both of which are in urban areas within 25 miles of these facilities. Planned Parenthood provides many services beyond abortion for women and men’s health. Excluding these facilities based on their location could have impacts beyond women’s health in the state.