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Editorial: Medicaid Redesign Offers Risks, Rewards

By Pat Bellinghausen

Medicaid is the program "nobody loves" because it's costly, cumbersome and pays low rates for care. And it's "a lifesaver for thousands of Montanans," covering 40 percent of births and 60 percent of nursing home residents.

That's how Peter Blouke summed up the program for an audience of 60 county commissioners in Billings for the Montana Association of Counties meetings last week. A former state director of social services and former state commerce director, Blouke was hired by the state to lead its Medicaid redesign.

Drawing up recommendations

An advisory council is working on recommendations to be incorporated into the governor's executive budget later this spring. If the new governor and the 2005 Legislature decide to make major changes in the federal-state program, the state would have to seek federal waivers. If the federal Centers for Medicare and Medicaid Services(CMS) agreed, changes could be implemented as early as June 2006.

Montana Medicaid spent $570 million last year. About 74 percent of that cost was paid by the federal government. Most states don't get that much help from Uncle Sam. Montana qualifies for one of the most generous federal matches because our per capita income is one of the lowest. That's a challenge for Medicaid redesigners:A large number of Montanans - 20 percent of the under-65 population - don't have Medicaid or health insurance, mostly because they can't afford it.

Seasonal complications

Last year, about 120,000 Montanans were enrolled in Medicaid for some part of the year. But in any given month, only 75,000 to 80,000 were enrolled. Here's another challenge for the redesigners: Medicaid eligibility fluctuates for many working poor families who have seasonal jobs or periods of unemployment mixed with periods of employment. They qualify one month, don't the next. It's hard to develop a good practice of routine and preventative care, not knowing how the family bills are going to get paid.

Part of the redesign plan is likely to be a proposal to get federal Medicaid matching money for a non-Medicaid program that now pays for some medicine, emergency and outpatient treatment of seriously mentally ill adults. Here's the pitch: Get the feds to shoulder 70 percent of the costs, and stretch the state dollars saved to cover more people with limited health-care benefits. Sounds too good to be true and it probably is.

As Blouke told the county leaders, the federal government is as desperate as the states to get control of escalating Medicaid costs. The trade off for new coverage would be a limit on how much federal spending would increase in future years. If the number of people eligible for Montana Medicaid or the costs of health-care increased more than the federal cap, the state would have to choose between cutting people or services.

There are, however, better ideas that DPHHS and the redesign advisers are considering:

  • Improving information systems so that Medicaid managers have accurate, current data on how much this huge program has spent. Lack of timely information contributed to dozens of sudden mid-year reductions in rates paid to hospitals, clinics and professionals who care for Medicaid patients in 2002-2003, and to sudden cuts in benefits to needy Montanans.
  • Improving prevention and early intervention to reduce catastrophic health-care bills.

Mental health should be included

Unfortunately, prevention in there design plans doesn't seem to extend to mental health where it's greatly needed. Emergency psychiatric patients overburden Montana community hospitals with cases for which there is no payment. Montana State Hospital is overflowing with court-committed patients. It would be much better for these individuals and much less expensive for taxpayers if they accessed effective care before they deteriorated into emergencies with life-threatening risks.

The state is right to take a look at upgrading Medicaid. But policy makers should be cautious about what deals they strike for short-term federal dollars. The poor - pregnant, infant, disabled and elderly - are here for the long term. Montana needs a health-care system that empowers its neediest people to live healthier lives.

Copyright 2004, Used with permission from The Billings Gazette.

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