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Think Medicaid Is Safe? Think Again.

From The Washington Post:


11:20 AM ET, 08/05/2011

Medicaid advocates breathed a collective sigh of relief when the debt debate wrapped up early this week. The entitlement program, initially seen as vulnerable in negotiations, was protected from across-the-board cuts in the trigger deal.

A federal exemption, however, is only half the story. States, who also foot a big chunk of the Medicaid bill, also shape the program. Looking at crunched budgets, states are weighing some big changes to their Medicaid programs that could vastly reshape the program’s financing.

“Don’t think things can stand still just because Medicaid was exempted,” says Tevi Troy, an official with the Department of Health and Human Services under President George W. Bush and a senior fellow at the Hudson Institute. “It cannot stand still with states looking at the expected growth level. Standing still really isn’t an option.”

Enhanced funding for Medicaid included in the stimulus ran out last month. States will spend an additional $16 billion of general fund revenues on Medicaid next year, the National Association of State Budget Officers recently projected. That’s at the same time that states will likely slash funding for education, public assistance and transportation.

Facing numbers like these, many states are clamoring for permission from the Obama administration to overhaul their programs to reduce costs. Last month, Utah proposed modifying its delivery system to look like the Accountable Care Organizations envisioned in the health reform law. Continue reading

How Effective Will A Federal Health Exchange Be?

New state health insurance marketplaces are supposed to be set up in every state  by 2014.

By J. LESTER FEDER | 7/18/11 10:31 PM EDT

Will there really be a strong federal health insurance exchange to take over for states that don’t build their own? Or is it a paper tiger?

That question is nagging at some policy experts following last week’s release of the proposed federal rules on the new state health insurance marketplaces, which are supposed to be set up in every state by 2014 under President Barack Obama’s health reform law.

If states do not meet the requirements in time to launch their own exchanges in January 2014, the law gives the Department of Health and Human Services the power to set up a federally run version for those states.

But the law does not give HHS the power to regulate insurance sold outside the exchanges — which would basically require it to take over the job of the state insurance commissioners. And it doesn’t give HHS the power to take over a state’s Medicaid program, even though the exchanges are supposed to handle enrollment when Medicaid is expanded to new populations in 2014.

“It could be a real problem to set up an exchange that’s even viable,” mused Norm Thurston, health reform implementation coordinator for Utah, who has said his state will not cooperate with important requirements of the health care law. Continue reading

Health Officials Move To Loosen State Requirements

By Noam N. Levey–July 12, 2011

Washington— The Obama administration moved Monday to ease some requirements on states to help them set up new insurance exchanges in 2014, a key feature of the healthcare law the president signed last year.The state-based exchanges are intended to make buying health insurance comparable to shopping the Internet for an airline ticket or a hotel room. And by 2019, the exchanges are expected to provide insurance for an estimated 24 million Americans who don’t get their health insurance from their employer, according to the nonpartisan Congressional Budget Office.

Small employers with fewer than 100 workers also will be able to use the exchanges, which will have to offer plans with a minimum level of coverage. No plans will be able to deny coverage to people with pre-existing conditions.

A Closer Look At The Right’s Favorite Medicaid “Fact”

From The Washington Post:

Witnesses at a hearing on Medicaid legislation in Florida last month

By Glenn Kessler– 07/05/2011

“Cash-strapped states are also feeling the burden of the Medicaid entitlement. The program consumes nearly 22 percent of states’ budgets today, and things are about to get a whole lot worse.”

— Sen. Orrin Hatch (R-Utah), June 23, 2011, at a hearing of the Senate Finance Committee

 “Medicaid is the lion’s share of that spending burden as it now consumes about 22 percent of state budgets now and will consume $4.6 trillion of Washington’s budget over the next ten years.”

— Former Kentucky governor Ernest Lee Fletcher (R), June 23, 2011, at the same hearing

“Across the country, governors are concerned about the burgeoning cost of Medicaid, which in fiscal 2010 consumed nearly 22 percent of state budgets, according the National Association of State Budget Officers. That’s larger than what states spent on K-12 public schools.”

Washington Post front page article, June 14, 2011

When a statistic is universally tossed around as a certified fact, it’s time to get suspicious.

Such is the case with this oft-cited statistic that 22 percent of state budgets is being gobbled up by Medicaid, the state-federal program that provides health coverage for the poor and the disabled. Medicaid supposedly is even dwarfing what is spent on educating children and teenagers.

But note the phrase “state-federal.” There’s billions of dollars in federal money involved, and the “22-percent” statistic obscures that fact. Let’s dig a little deeper into the numbers. Continue reading