Changing Medicaid system could limit health care
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By Nancy Hicks / Lincoln Journal Star
A watchdog group for low-income Nebraskans warns that some Medicaid reform recommendations could mean less health care for poorer Nebraskans.
Under the current Medicaid system, people who qualify for Medicaid — generally low-income families with children, seniors and adults with disabilities — are entitled to a range of medical benefits, including prescriptions.
But a Medicaid reform preliminary report released Monday recommends Nebraska eventually move to what is called a “defined contribution” system, where benefits are not assured.
Under that system, the state would use Medicaid dollars to buy private health insurance for Medicaid-eligible Nebraskans or to fund Medicaid accounts that would be used by recipients to purchase medical care or insurance. Several states are already moving toward these new systems.
Under the defined contribution system, the state would determine ahead of time how much it would provide toward health care needs, said Becky Gould, staff attorney with the Nebraska Appleseed Center for Law in the Public Interest.
But trying to predict health care needs for a low-income population, that tends to be sicker than a high-income population, will not work, she said. The health care will generally come up short, she predicted.
The center would like to maintain the current entitlement approach, where doctors determine the needs and people get their needs met, she said.
The defined contribution structure is a major change, with no study to determine whether it would be effective and where the gaps are, Gould said.
“It is taking a big risk without knowing that it is going to produce the savings the state hopes it will,” she said.
The defined contribution system is one of two paths that can be used to curb Medicaid’s relentlessly growing costs, according to a preliminary Medicaid reform report released this week.
The state could control costs by tinkering with the current system or by developing a completely new system, the report said.
The dozens of recommendations for money-saving changes within the current program range from participating in a multi-state drug-purchasing pool to creating a separate health insurance program for children now in the Children’s Health Insurance Program.
The report lays out both approaches and suggests the state could tinker in the short term and revamp the system in the future.
The report also recommends changes that might help make insurance and health care more available to Nebraskans who aren’t poor enough to qualify for Medicaid.
The state must make some changes to Medicaid, said Omaha Sen. Jim Jensen, chairman of the Legislature’s Health and Human Services Committee.
“What we are doing is not sustainable,” said Jensen about Medicaid’s growth in costs that have consistently outpaced the growth in state tax revenues.
The report, he said, “lays out some well-founded and well-thought out” ideas.”
“There are some options we should look at very closely,” he said.
The growth in Medicaid spending will have to average no more than about 1.9 percent a year in order to avoid seriously jeopardizing the state budget over the next two decades, according to the report.
Medicaid’s highest cost populations include adults with disabilities, seniors and children with disabilities. Prescription costs are also growing and consume about $237 million a year, about 17 percent of the costs of the total program, funded by federal and state tax dollars.
The report, authored by Jeff Santema, attorney for the Legislature’s Health and Human Services Committee, and Richard Nelson, a director with the Health and Human Services System, also includes suggestions from a Medicaid-related state employee group and more than a dozen private Medicaid-related agencies and advocacy groups, and input from an appointed Medicaid Reform Advisory Council.
Senators, concerned about the rapidly rising Medicaid costs, created the reform process through legislation (LB709) last year.
The bill calls for reform bills to be introduced in the 2006 legislative session. Those bills will likely be a combination of short-term changes within Medicaid and a long-term strategy for change, Santema said.
This is a comprehensive report and there will be a statewide discussion, said Sen. Philip Erdman of Bayard, sponsor of the reform bill.
“I think they have gone above and beyond what they were asked to do,” he said.
The public will have several chances to discuss the proposal and recommendations, he said.
What’s next?
Public input meetings are scheduled across the state, including three in eastern and central Nebraska:
* Omaha, 7 p.m. Oct. 25, TAC Building Board Room, 3215 Cumming St.
* Lincoln, 7 p.m. Oct. 26, State Capitol Building, Room 1510
* Grand Island, 7 p.m. Oct. 27, City Hall Community Meeting Room, 100 E. First St.
Read the Medicaid reform reports at www.hhs.state.ne.us, then click on “Medicaid Reform.”
Recommendations for those receiving Medicaid
* Pursue a “defined contribution” plan, designed to allow the Medicaid program to become fiscally sustainable.
* Increase the availability of community and home care as an alternative to nursing home care.
* Provide case management for certain diseases and for some high-expense populations.
* Create a separate program, for children in moderate- to low-income families, now in the Children’s Health Insurance Program.
* Require families or individuals with income above 100 percent of the poverty level receiving Medicaid benefits to help pay for costs.
* Provide more intensive prenatal and postnatal counseling or care coordination.
* Require prior authorization of all new brand-name prescription drugs.
* Participate in a multi-state drug purchasing pool.
Other general recommendations:
* Create a public-private partnership with small employers to offer insurance coverage to employees.
* Study the feasibility of a state-created reinsurance program to stabilize premiums for the Children’s Health Insurance Program and allow Medicaid to pay a portion of health insurance premiums for families at or below 185 percent of poverty.
* Encourage formation of a pharmacy clearinghouse to assist eligible consumers in identifying and applying for manufacturers’ drug discount programs.
* Establish additional community health centers that can serve uninsured and Medicaid-eligible Nebraskans.
* Assist and encourage small employers to provide health insurance coverage for employees.
Reach Nancy Hicks at 473-7250 or nhicks@journalstar.com.
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