Medicaid Shrinkage: Innovation or reaction?

Just one year ago, after passage of the Affordable Care Act (ACA), The National Council highlighted the expansion of Medicaid that would occur as a result of the ACA. To meet the law’s requirements to provide insurance coverage to the working poor who are generally not insured through their employment, do not have access to insurance groups, and cannot afford individual coverage, the Medicaid program would need to expand to provide the legally required coverage.

In November, the American electorate hired new Congressional representatives who are dead set on rolling back what they call “entitlement” programs (Social Security, Medicare and Medicaid) and returning the Federal government to what they see as its proper role: funder of national security and protector of free markets (code words for defense and corporations). In this new/old world view, individual rights consist of the right to pursue happiness and to bear arms; communal responsibility for one another appears to be non-existent.

Where does that leave those with serious behavioral health issues and the people who treat them?

The National Council works to represent community behavioral health organizations and the people they serve. They view Medicare and Medicaid as crucial to the treatment and therefore to the survival of the seriously mentally ill since “Medicaid is the single largest source of funding for America’s public mental health system.” Since early March, The Council has reported regularly on the threatened slashing of the Medicaid and Medicare systems.

In early March, The Council reported that a group of governors testified about their need for greater “flexibility” in their Medicaid programs. This group especially wanted to be exempted from the maintenance of effort (MOE) requirement under ACA that prohibits the states from rolling back Medicaid eligibility. President Obama said he would support allowing states to opt out of the law’s requirements if they could guarantee an alternative method of providing universal coverage.

On April 4, Representative Paul Ryan (R-WI) released his committee’s plan for the 2012 budget that includes a dramatic restructuring and slashing of both Medicaid and Medicare. On April 7, the National Council released a fact sheet on the potential impact of the funding decreases promised by the budget blueprint. Under Congressman Ryan’s proposal, Medicaid would be converted to a block grant program beginning in 2013 and Medicare would be converted to a privatized voucher system starting in 2022. The House of Representatives voted to adopt this framework. While it is highly unlikely the Senate will accept the blueprint, they will need to come up with one of their own and then work to reconcile it with the House’s plan.

In a Health IT newsletter by Mercom Capital Group, it was reported that on April 14, 2011, The U.S. Department of Health and Human Services (HHS) “announced four initiatives to give states more flexibility to adopt innovative new practices and provide better, more coordinated care for people with Medicaid and Medicare while helping reduce costs for states and families.” In Florida which has been providing some Medicaid services through managed care contracts, the legislature is close to mandating managed care for the entire program in spite of poor reviews for the pilot programs. “At the workshop in Hollywood, a succession of doctors, care providers, advocates and Medicaid patients all had the same message: Managed care has been a disaster.”

As a small business owner who buys health insurance in the private marketplace for a very small group of employees, these proposals are extremely frightening. My health insurance premium at age 60 is already more than the proposed Medicare plan would pay once I become eligible at age 65, and my premiums will certainly not get any lower if I need to buy insurance in the private marketplace. If I, as a pretty healthy 60 year old, am so concerned about these changes to Medicare, I can only imagine the panicky reactions being experienced by those persons represented by the National Alliance on Mental Illness (NAMI) who are dependent upon Medicaid and Medicare to pay for their treatment.

How do you see these proposed changes impacting you and your organization? Do you agree with this method of limiting spending? What ideas do you have for controlling the growth of costs of Medicaid and Medicare? How do you propose that we proceed?

Please share your comments below.

0 thoughts on “Medicaid Shrinkage: Innovation or reaction?

  • I am very glad that I am in semi-retirement and thus not AS dependent on insurance payments as before. That said, I think the best way to counter the attack on Medicare, Medicaid & social security programs is to broaden the context to one where the true cost of managing/withholding care is more overt. American healthcare has one of the highest administrative overheads in the world, and our general health is certainly no better than other countries. I have long held that if each company would invest what they their staff for oversight into good care for patients everyone would benefit. Similarly, cutting social security payments, even for those in the future will not benefit the country, rather it widens the disparity in income, which has hosts of fairly well-documented negatives. While national defense is certainly an appropriate government function, I think the current foray into the Middle East is suspect as “National Defense.” We are spending billions a day, and this expense should certainly be factored in to any discussion of how we invest our national resources … rather than a liberal vs conservative political argument.
    Wonder what others think?
    Best – Ann Aukamp

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