NPN benefitsBlog

Most Americans Support Medicaid: Kaiser Poll Finds

Despite the negative information from polticians, public attitudes toward Medicaid are positive, and opposition to cuts is reasonably strong, according to a new surprising public opinion survey released June 29th by the Kaiser Family Foundation.

The survey found that while two-thirds of the public think their state has major budget problems, a substantial majority are reluctant to cut Medicaid to balance state budgets, and a majority think the federal government should maintain (44 percent) or increase (36 percent) federal spending on Medicaid; only 12 percent of the public prefer seeing federal funding of Medicaid cut.

Nearly three-quarters (74 percent) of adults say Medicaid is a "very important" government program, ranking it close to Social Security (88 percent) and Medicare (83 percent) in the public's mind, equal to federal aid to public schools (74 percent), and above defense and military spending (57 percent).

About 8 in 10 Democrats (82 percent) and Independents (79 percent) view Medicaid as an important government program, while fewer, but still 6 in 10 Republicans (61 percent) express that view.

A majority of Americans (56 percent) report having some interaction with Medicaid, either having been enrolled themselves at some point (16 percent) or knowing a friend or family member who has received health coverage or long-term care assistance through the program (40 percent). Additionally, if they needed health care and were eligible, nearly 8 in 10 Americans (78 percent) say they would be willing to enroll in Medicaid. This view is consistent across different party identifications.

The findings off this survey should give states pause as try various meatax approaches to trim Medicaid. The survey found that almost 50% of people (including politicians) did not know that 70% of all Medicaid spending is for aged an people with disabilties.

Senate Vote Puts Quietus On Bush's Medicaid Cuts

Until today the President had been planning to balance the '06 budget with some $14 billion in cuts in the Medicaid program for people with disabilities and people who are aging. In the end though, enough moderate Republicans in the Senate just couldn't hack the cuts that as one said "may well be a matter of life and death for thousands of Americans". In what should be characterized as more of a win for financially struggling state governments, rather than Medicaid constituents directly, the Senate has moved to restore the programs the president had cut in his 2006 Budget.

Senate Budget Committee Chairman Judd Gregg (R-N.H.) tried to ride herd on the recalcitrant Republican Senators to keep in the President's budget cuts. He commented: The essence of this budget is . . . whether or not our generation, the baby-boom generation, is going to be willing to stand up and admit we put too much on the books for our children to bear. One wonders where Senator Greg was when the massive tax cuts were passed to begin with that caused the deficits. Indeed, as the Senate voted on the restoration of Medicaid programs, it also voted on some $134 billion in addtional tax cuts. Yesterday (by incredible coincidence) Gregg was honored by the ultra conservative National Taxpayers Union with its 2004 “Taxpayers’ Friend Award : ... While many members of Congress talk about reducing the size of government, Senator Gregg backed up those works with votes. Apparently voting to double the President's tax cuts to the wealthy doesn't increase the cost of government as the deficit explodes with another $125 billion in tax cuts in Bush's rich-get-richer, poor-get-poorer income distribution plan.

The President's budget now goes back to the House where a major fight over domestic budget priorities was already brewing. The budget barely passed the House (218-214) last week. Republicans cuts were drastic but many more conservative Republicans argued they weren't deep enough into the " entitlement programs". It's hard to characterize this as a loss for the President just yet since the next step in the legilative process means the House and Senate must find some compromise. It looks what we really have is a real mess that could impact the passage of the '06 federal budget--then nobody wins.

Signaling its real priorities, Congress fled Washington for its two week Easter recess beginning today.

New Study: Why Medicaid Spending Is Growing

Medicaid spending increased to $276 billion by fiscal year 2003, up one-third from 2000, according to a new article released last week by the peer-reviewed journal Health Affairs and commissioned by the Kaiser Commission on Medicaid and the Uninsured. Increased program spending was largely driven by rapid increases in enrollment of children and parents in low-income families.

Urban Institute researcher and study author John Holahan concludes that, “Medicaid played its role as a safety net, providing coverage to those facing economic declines and loss of employer sponsored insurance, but the result was a sharp increase in program costs.” He added, “Medicaid enrollment growth undoubtedly kept the uninsurance rate from increasing more than it otherwise would have during this period.”

For FY2000-03, Medicaid spending grew at an average of 10.2 percent annually. However, state Medicaid cost containment actions—ranging from curbing provider payment rates to reducing benefits—and a slowing of enrollment growth served to moderate Medicaid spending growth in FY2003. The 7.1 percent growth in FY2003 is comparable to the increases the program experienced in the late 1990s. See Figure 1.

“We know states are struggling with Medicaid spending and the pressure it puts on other state priorities, but this study shows that Medicaid costs actually grew at a slower rate than private insurance costs. The real problem is rising health care costs and the states ability to pay the bill, and not that Medicaid spending is out of control,” said Diane Rowland, executive director of KCMU.

Growth in Medicaid Spending vs. Private Insurance Spending

Comparing Medicaid’s purchase of acute care services to private insurance costs shows the program’s cost increases are below those of private insurance. The average growth rate of per enrollee Medicaid costs for acute care from FY2000-03 was 6.9 percent—lower than the 9 percent increase in per enrollee costs of the privately insured and substantially lower than the growth in employer-sponsored insurance premiums (12.6 percent). See Figure 2.

Although Medicaid purchases health care services in the marketplace for 75 percent of its beneficiaries, that is merely one of the roles the program plays in the American health system. The bulk of Medicaid spending (70 percent) finances health and long-term care for the 25 percent of beneficiaries who are elderly or individuals with disabilities. The federal and state governments share joint responsibility in funding the program.

What Drove Medicaid Spending And Enrollment Growth?

Between FY2000-03, 68 percent of the growth in Medicaid spending was attributable to acute care and 30 percent to long-term care due to the faster growth in enrollment of children and non-disabled adults into the program during the period. During this time period, 90 percent of Medicaid’s total enrollment growth (8.4 million) was from families with only 10 percent from the elderly and individuals with disabilities.

Although families dominated Medicaid enrollment growth from FY2000-03, they only accounted for 44 percent of Medicaid spending growth. The elderly and individuals with disabilities accounted for 56 percent of spending growth. Although the elderly and individuals with disabilities are a minority of the Medicaid population, they are responsible for the majority of program costs due to their intensive use of services.

The Health Affairs article, “Understanding the Recent Growth in Medicaid Spending, 2000-2003” is available online. A webcast of today’s policy briefing releasing the article in Washington, D.C can be viewed online after 5 p.m. EDT.

http://www.kaisernetwork.org

Governors Debate Medicaid's Future in DC

It looks like Medicaid costs are on the nation's governors minds as they gather in Washington for the annual National Governors Association (NGA) Winter Meeting this weekend. Democratic and Republican governors alike are voicing the same concerns: "Medicaid as it currently exists is non-sustainable in the long run". What is not being said is that there is a concentrated effort by all parties to deconstruct Medicaid as the health program for poor, aging and disabled Americans becomes one of the driving forces in state budgets. Red states with Republican governors now have the "perfect storm" to reduce the Medicaid programs that they have never really cared for anyway. Public demands though for adequate health care for the poor may win the debate.

Flexibility seems to be the overused buzz-word in the current Medicaid debate. President Bush wants to cut Medicaid by nearly $40-60 billion and giving states "more flexibility" to control costs. Governors see the so called "flexibility' as a sly way of passing of program costs to states. Still Bush wants to cap some payments and reduce the federal share on some Medicaid services. The Administration also says some states use Medicaid for things not related to a medical care, although he can't present any evidence other than rhetoric that this exists. Ron Pollard, with Family USA, says that "flexibility is often a euphemism for cutting people off the program".

Since the Medicaid program started, politicians have been about "cutting costs" in the Medicaid programs. Medicaid is a welfare program and always gets stuck with the same tired fraud and abuse charges. There comes a point to there is nothing left to cut. It's been that way for years. Sen. Max Baucus D-MT, ranking minority member on the finance committee recently noted " it's simply misleading to say that we are simply cutting fraud and closing loopholes".

Politicians at both the state and federal levels don't seem to understand the demographic trends that are starting to driving the high costs upward. These have to be addressed, not swept under the rug with welfare control rhetoric. For example, more and more people are aging and the program is swiftly becoming a long-term care program(25% of all nursing homes are Medicaid funded) for both aging retires and aging people with disabilities. Not addressing the needs of aging baby boomers and long-term care only creates a more expensive system that relies more on expensive. emergency room treatment. Obviously, the country needs to talk about financing long-term care as baby boomers retire unstead of hiding it in the state Medicaid programs.

Another major cost-driver is the lack of access to health care for low-income workers. According to Business Week magazine"waves of low-wage workers are applying for Medicaid because they don't get insurance from their employers". The article cites Walmart, the largest employer in the US with 1.5 million employees, has about 75,000 (5%) of its workers on Medicaid because of organizational policies that limit medical benefit coverage to their part-time workers. Eventually the public is going to tire of trading disabled children's medical needs to help Walmart and other Fortune 500 companies enhance their bottom line through Medicaid.

Look for things to heat up on the subject next week.

Kerry Introduces Kids Come First Act

Most of us missed it with all the other action in Washington this week, but Senator John Kerry (you remember him) introduced his Kids Come First Act universal health care plan to the nation in a speech before Families USA on Thursday. He had announced S.114 Monday.

Under the Kerry plan, the federal government would pay all Medicaid costs for all children under 21 with family incomes at or below the poverty line. The federal poverty level is currently $15,670 annual income for a family of 3. The states would pay a share of Medicaid or state insurance program costs for all children up to 300 percent of poverty. Kerry proposes to pay for the by repealing the recent tax cuts for people who earn over $350,000.

With Republicans in charge of the Senate, Kerry's proposal has about as much of a chance as the proverbial snowball. It does open up the debate on children’s health care. Kerry said if Republicans "choose" tax cuts for the wealthy over health insurance for kids, then that's an issue we take to the country.''

The speech can be heard on C-SPAN. Kerry is scheduled for NBC's Meet the Press this Sunday to talk about his proposal.

Bush Nominee: Cut Medicaid

Michael Leavitt, testifying in his nomination hearings for Secretary of Health and Humans Services yesterday said that states needed the "flexibility to trim Medicaid benefits". Leavitt says states can provide an "expansion quality basic care ' to meet a obligation to "care for the poor". Leavitt repeatedly emphasized the Bush Administration goal of reducing the growth of Medicaid.

Full of Bush budget language, his "limited benefit plan" is based on a Medicaid Waiver program that Leavitt implemented while governor of Utah. That plan would cut Medicaid benefits and use the money to serve a broader population. According to an article in today's NY Times, that plan did not include hospitalization or specialty care and negotiate (read pressured) hospital's to provide free care to Medicaid recipients which essentially moved the problem to the local level.

Governors have expressed concern of any Medicaid model that caps expenditures to the states which is what the Bush administration seeks to do. Administration officials are expected to continue this push to reduce the $413 billion deficit through reduction of public programs like Medicaid. Leavitt is expected to be quickly approved as hearings resume today.

Florida to Announce Medicaid Overhaul Plans Today

According to press reports, Governor Jeb Bush is set to announce major changes in Florida's Medicaid program today. Florida is being seen as a possible national model as President Bush moves to reduce access to the state Medicaid programs around the country.

After 6 months study, Florida wants to move Medicaid participants to HMO-like medical networks that would cap Medicaid use. Bush wants also wants a pilot program that would push thousands of low-income seniors from nursing homes into HMOs.

Advocates are preparing for a long political fight, noting that most of the talks about the changes have been held behind closed doors without little doubt what the ultimate outcomes would be.