Critics Fear G.O.P.’s Proposed Medicaid Changes Could Cut Coverage for the Aged

While the largest number of Medicaid recipients are low-income children and adults, who tend to be far less politically potent voices in battles over entitlement programs than older voters, the changes to Medicaid proposed by Representative Paul D. Ryan of Wisconsin, the House budget chairman, could actually have a more direct impact on older Americans than the Medicare part of his plan.

The House plan would turn Medicaid, which provides health coverage for the poor through a combination of federal and state money, into a block grant program for states. The federal government would give lump sums to states, which in turn would be given more flexibility and independence over use of the money, though the plan does not spell out what the federal requirements would be.

Beginning in 2013, these grants would increase annually at the rate of inflation, with adjustments for population growth, a rate far below that of inflation for health care costs. As a result, states, which have said that they cannot afford to keep up with the program’s costs, are likely to scale back coverage. Such a reduction, critics fear, could have a disproportionate effect on Medicaid spending for nursing home care for the elderly or disabled.

By contrast, under the Medicare proposal approved by the House, no one currently 55 or older would see a change in benefits, which the House proposed to turn into a voucher-type program.

“This is a huge deal for the nation’s seniors, and it’s been largely unrecognized,” said Jocelyn Guyer, the co-executive director of the Center for Children and Families at the Georgetown University Health Policy Institute. “Obviously Medicaid is a program designed for low- and modest-income people. But when it comes to nursing homes, a lot of seniors start off middle class and pay for their care with private funds but end up using the Medicaid program.”

According to the Congressional Budget Office, in the 2010 fiscal year, 77 percent of people enrolled in Medicaid were children and families, while 23 percent were elderly or disabled. But 64 percent of Medicaid spending was for older Americans and people with disabilities, while 36 percent went to children and families.

According to the Kaiser Family Foundation, which analyzes health care issues, 7 of 10 nursing home residents are on Medicaid, in large part because even middle-class patients often run through their savings while in a nursing home and turn to the entitlement program.

The foundation recently estimated that a Medicaid block grant similar to the one proposed by Mr. Ryan could save $750 billion over 10 years. House Republicans also want to eliminate the expansion in Medicaid eligibility scheduled to take place in 2014 under the new health care law, which could result in savings of $610 billion.

According to a report released Tuesday by the foundation with the Urban Institute, by 2012, under the Ryan plan, Medicaid enrollment nationally could be 44 million people fewer than what it is projected to be under current law, which includes new additions to the program under the health care overhaul.

It is still possible that there will be some changes to the Medicare program this year, but Medicaid is quite likely a more politically viable area of change. Representative Eric Cantor of Virginia, the House majority leader, said Tuesday, “Medicaid is a very important part of our plan.”

While the House passed the Ryan 2012 budget that includes changes to Medicare and Medicaid, it is dead on arrival in the Senate.

Another budget proposal offered Tuesday by Senator Patrick J. Toomey, Republican of Pennsylvania, increases Medicare spending, while using block grants for Medicaid in an effort to reduce Medicaid spending by 2019 to a level only $14 billion above what it was in the 2008 fiscal year.

It is likely that Democrats will strongly oppose block grants, arguing that such a plan would shift too many Medicaid costs to states that are already slashing their budgets. At a news conference last week, Senator John D. Rockefeller IV of West Virginia sharply criticized several of the ideas for reshaping Medicaid, calling broad-based cuts “almost beyond my moral understanding.”

 

Florida Legislators Pass H.M.O. Plan for Medicaid

MIAMI — In a sweeping overhaul of its $21 billion Medicaid program, the Florida Legislature approved a bill Friday to shift nearly three million Medicaid recipients into managed-care programs in the hope of saving money and improving services.

“Medicaid has grown faster than any other part of our budget,” said State Senator Joe Negron, Republican of Stuart, who took the lead on the bill. “It is crowding out funding for education, economic development and other parts of the budget that are equally important.”

If signed into law as expected, the bill will make Florida, with one of the largest number of Medicaid patients and a high rate of uninsured, one of the biggest states to jump almost entirely from a traditional Medicaid payment system into managed care. The wholesale shift would begin in July 2012.

The bill, a compromise between the House and the Senate versions, would allow the state to decide how much to spend on Medicaid each year, share in the profits of managed-care companies if they exceed 5 percent and penalize networks that reneged on contracts. To help ensure better care for patients, the bill would also require plans to include specialists and provide higher reimbursement rates to doctors.

Patients would be charged $10 monthly premiums and $100 if they showed up at the emergency room with a non-emergency.

The state and managed-care companies would control which services to provide to Medicaid patients. In so doing, the legislation would do away with the existing fee-for-service system, in which the state pays providers for each service, a practice that has led to widespread fraud and inconsistent care. Reimbursement rates have dropped so low that many doctors choose not to treat Medicaid patients.

The Legislature’s bill seeks to remedy those issues with the requirement that plans include specialists and the higher reimbursement rates to doctors.

Another sweetener for doctors and hospitals is a provision that limits the amount they would have to pay out in malpractice damages for pain and suffering to $300,000 for each Medicaid claimant, unless the damages award is punitive. Senator Negron said the cap was appropriate because doctors who treat Medicaid patients are basically providing a public service and should be encouraged to do so.

But Democrats said it would be unreasonable to charge poor patients fees and unjust to treat them differently in malpractice cases. “Why is it that their pain and suffering is devalued?” asked State Senator Arthenia L. Joyner, a Democrat of Tampa.

Gov. Rick Scott, a wealthy former health care executive who made revamping Medicaid a priority, supports the legislation, which is projected to save $1.1 billion in its first year.

But the proposed law cannot go into effect without the approval of the federal government, which pays more than half of Florida’s Medicaid tab. Last month, the federal government advised legislators to choose the payment system that would guarantee that a percentage of the money, in this case 90 percent, would go to patient services. Instead, the Legislature chose the other option: to share profits with managed-care companies.

But Senator Negron said he was not worried. “We have given the federal government a hundred good reasons to approve our plan,” he said. “I think they will work with us because they have the same economic pressures that we have.”

Democrats and patient advocates said that they worried profit would get in the way of care and that some people would not be able to pay premiums. They expressed alarm that the bill is based on a five-year-old pilot program in five Florida counties that had decidedly mixed results. At least seven managed-care companies pulled out of the program in Broward County, and many patients — most of whom are low-income children or pregnant women — fled to networks run by hospitals.

Managed care is not new to Florida. About 60 percent of Medicaid patients are in some form of managed care but, outside of the pilot program, they must receive a mandated minimum level of benefits.

The Medicaid overhaul also extends into long-term care. Nursing home residents would shift into managed care, but the bill provides a separate provision for them. Payments would go directly to the nursing homes, bypassing managed-care companies, so money would not be deducted for administrative fees. Savings would come by shifting more people into home- and community-based programs.

Developmentally disabled people would be exempt from the managed care system for now. And each of the 11 managed-care regions in Florida would have to include a network run by a hospital or doctors. Those networks could continue to use the traditional payment system for three more years.

Those who already have insurance and are eligible for Medicaid would receive a voucher from the state to apply to their policies.

 

Florida Legislators Pass H.M.O. Plan for Medicaid

MIAMI — In a sweeping overhaul of its $21 billion Medicaid program, the Florida Legislature approved a bill Friday to shift nearly three million Medicaid recipients into managed-care programs in the hope of saving money and improving services.

“Medicaid has grown faster than any other part of our budget,” said State Senator Joe Negron, Republican of Stuart, who took the lead on the bill. “It is crowding out funding for education, economic development and other parts of the budget that are equally important.”

If signed into law as expected, the bill will make Florida, with one of the largest number of Medicaid patients and a high rate of uninsured, one of the biggest states to jump almost entirely from a traditional Medicaid payment system into managed care. The wholesale shift would begin in July 2012.

The bill, a compromise between the House and the Senate versions, would allow the state to decide how much to spend on Medicaid each year, share in the profits of managed-care companies if they exceed 5 percent and penalize networks that reneged on contracts. To help ensure better care for patients, the bill would also require plans to include specialists and provide higher reimbursement rates to doctors.

Patients would be charged $10 monthly premiums and $100 if they showed up at the emergency room with a non-emergency.

The state and managed-care companies would control which services to provide to Medicaid patients. In so doing, the legislation would do away with the existing fee-for-service system, in which the state pays providers for each service, a practice that has led to widespread fraud and inconsistent care. Reimbursement rates have dropped so low that many doctors choose not to treat Medicaid patients.

The Legislature’s bill seeks to remedy those issues with the requirement that plans include specialists and the higher reimbursement rates to doctors.

Another sweetener for doctors and hospitals is a provision that limits the amount they would have to pay out in malpractice damages for pain and suffering to $300,000 for each Medicaid claimant, unless the damages award is punitive. Senator Negron said the cap was appropriate because doctors who treat Medicaid patients are basically providing a public service and should be encouraged to do so.

But Democrats said it would be unreasonable to charge poor patients fees and unjust to treat them differently in malpractice cases. “Why is it that their pain and suffering is devalued?” asked State Senator Arthenia L. Joyner, a Democrat of Tampa.

Gov. Rick Scott, a wealthy former health care executive who made revamping Medicaid a priority, supports the legislation, which is projected to save $1.1 billion in its first year.

But the proposed law cannot go into effect without the approval of the federal government, which pays more than half of Florida’s Medicaid tab. Last month, the federal government advised legislators to choose the payment system that would guarantee that a percentage of the money, in this case 90 percent, would go to patient services. Instead, the Legislature chose the other option: to share profits with managed-care companies.

But Senator Negron said he was not worried. “We have given the federal government a hundred good reasons to approve our plan,” he said. “I think they will work with us because they have the same economic pressures that we have.”

Democrats and patient advocates said that they worried profit would get in the way of care and that some people would not be able to pay premiums. They expressed alarm that the bill is based on a five-year-old pilot program in five Florida counties that had decidedly mixed results. At least seven managed-care companies pulled out of the program in Broward County, and many patients — most of whom are low-income children or pregnant women — fled to networks run by hospitals.

Managed care is not new to Florida. About 60 percent of Medicaid patients are in some form of managed care but, outside of the pilot program, they must receive a mandated minimum level of benefits.

The Medicaid overhaul also extends into long-term care. Nursing home residents would shift into managed care, but the bill provides a separate provision for them. Payments would go directly to the nursing homes, bypassing managed-care companies, so money would not be deducted for administrative fees. Savings would come by shifting more people into home- and community-based programs.

Developmentally disabled people would be exempt from the managed care system for now. And each of the 11 managed-care regions in Florida would have to include a network run by a hospital or doctors. Those networks could continue to use the traditional payment system for three more years.

Those who already have insurance and are eligible for Medicaid would receive a voucher from the state to apply to their policies.