In the wake of the Congressional Budget Office’s analysis of the Republican Senate majority’s proposal to overhaul the Affordable Care Act, an interesting argument has emerged. The millions of dollars in reduced spending on Medicaid that the Republican bill proposes aren’t actually cuts to Medicaid, because Medicaid spending still goes up.
Republicans celebrated on Thursday after successfully moving a health-care bill forward that they said would fulfill their promise to repeal President Barack Obama’s Affordable Care Act. Yet one of the bill’s most far-reaching sections is only tangentially related to repealing the law, also known as Obamacare.
The law would limit federal spending on Medicaid — the program that provides health insurance to the poor — to an index of inflation in medical prices. Since the program’s costs are increasing more rapidly than that index, over time, the government would spend hundreds of billions less on Medicaid than it would under the current system. It would be up to states to decide how to make up the difference.
A new government report shows that the average ObamaCare Medicaid expansion enrollee costs the federal government $6,366 in 2015, 49% above the per-person cost of $4,281 projected a year ago.
The surprising cost overrun is likely to result in increased scrutiny of Medicaid program expenses by Congress and could pose a risk to insurer profits in the one area of ObamaCare that has provided a reliable boost for their bottom lines.
UnitedHealth (UNH), which is pulling out of the individual health insurance exchange business in most states amid growing losses, is among companies profiting from the Medicaid expansion. Public companies vying for the Medicaid managed care business include Centene (CNC), Anthem (ANTM) and Molina (MOH).
“Government overreach” frequently sparks lively debates about the proper role of federal, state and municipal ruling bodies. A report in The Washington Examiner (online Apr. 20, by Paige Winfield Cunningham) says, “The two biggest states to reject Obamacare’s Medicaid expansion are accusing the administration of trying to force them into it.”
Texas Gov. Greg Abbott, R-Texas, recently voiced his advocacy for a lawsuit filed by Florida Gov. Rick Scott. Scott initiated the litigation against the Obama White House “over ending federal funds to pay hospitals for caring for the uninsured,” according to The Washington Examiner.
The Feds have are saying they will stop such funding unless the Sunshine State grows its Medicaid program under the auspices of the Affordable Care Act. The Examiner report additionally explains, some U.S. states have “funding pools.” These reimburse hospitals – who would otherwise receive no monies for care dispensed. Yet as Cunningham’s article points out, Medicaid expansion, “would reduce the need for such funds.”
Gov. Abbott (speaking for Florida) is quoted by Cunningham as saying, “Florida’s approach should be determined by Floridians, not coerced by federal bureaucrats.”
Aimee Picchi, in a new CBS Interactive report (online, Apr. 13) tells of The Wall Street Journal account of Stephanie Graham, whose mother joined Medicaid in 2014. This was because of the Affordable Care Act’s requirement for healthcare coverage. Without it they would wind up paying an Obamacare fine.
The CBS report describes “The Estate Recovery Law,” which permits U.S. states “to recover Medicaid costs for patients who are older than 55 when they die, although some limits apply, such as exceptions for the disabled and hardship exemptions for survivors.” Picchi’s CBS report adds, “The law is taking some newly enrolled Medicaid patients by surprise, but it’s also prompting a few states to push back on the practice.”
Doctors who treat patients on Medicaid are facing an arduous beginning to their 2015 practice years.
According to a new post on Vox by Sarah Kliff (online, Dec. 29) doctors in the category are now looking at a 42 percent reduction – in terms of Medicaid physician reimbursements. The final decline(s) in Medicare reimbursements to doctors will ultimately differ from state to state. This is due (according to Kliff’s Vox report) to each state determining and establishing its own rate of payment for primary care doctors.
California has a pattern of paying Medicaid doctors very low rates; the Affordable Care Act has increased their fees by as much as 50 percent. On the other hand, in North Carolina, as state in which two program fees were approaching identical, the rate increase was less.
Much of the Obamacare story is about discrepancies in the processing management of both personal health data, and payments. From time to time the General Accounting Office (GAO) is a source of bad news for the Affordable Care Act. A recent GAO finding continues this trend.
A report in CNS News on June 25 says Medicaid paid out $14.4 billion in what they term as “improper” payments in 2013. The report was generated by the GAO.
Federal law makes it clear that both the states and the Centers for Medicare and Medicaid Services (CMS) must guarantee the legitimacy of Medicaid. Now, an increasing segment of federal Medicaid dollars and payments are subject to being questioned.
According to the GAO, this is occurring because of a gulf between both state and federal systems controlling the integrity of managed care. In other words, CMS is going to have to assume a more predominant role in ensuring that the states are wholly responsible for the Medicaid money they both receive and handle. They’ll also have to establish clear rules accompanied by the type of support which guarantees sufficient “integrity efforts” are well in-place in managed care programs.
Another Daily Caller.com report Monday claims the federal government is trudging through piles of overdue applications due to the Affordable Care Act’s Medicaid expansion efforts. Yet, the administration is considering cuts to funding, directly impacting such applications.
Again the Obamacare issue is technology. “A massive amount of Medicaid applications has been further complicated by technological snafus between HealthCare.gov and incompatible state technologies, creating backlogs across the country,” said Sarah Hurtubise, the article’s author. For months, federal systems have been dealing with issues in sending the most complete information to state Medicaid agencies.
Ideally, HealthCare.gov should guide applications of customers eligible for Medicaid to the state agencies, which should be able to verify eligibility and then enroll the applicant. However, breakdowns in communications in many of the states have caused customers to sign up for a second time.
“Hundreds of thousands of Medicaid applicants are still waiting for access to care.” Illinois’ backlog totals an estimated 200,000 applications, while California’s Medicaid backlog numbers some 800,000 applications.
The Office of the Inspector General (OIG) for the Department of Health and Human Services (HHS) has uncovered 79 high risk vulnerabilities – specifically in information processing systems of at least ten state Medicaid agencies which “raise concerns about the integrity of the systems used to process Medicaid claims.” While ten states are not identified, the OIG said the investigation “suggests that other State Medicaid information systems may be similarly vulnerable.” However, the OIG results cannot be applied to all 50 states. The OIG has provided a table giving using a numerical grading scale reflecting a range from a low of 3 for one state, to a high of 17 for another. States are identified on this table as State A; State B, etc.
About 8.9 million low income Americans will fall within revised guidelines for Medicaid eligibility under the Affordable Care Act. “With the personal information of nearly 9 million more Americans running through State Medicaid systems, the increased strain on the system and workload of state personnel serve to increase the urgency of addressing those serious security shortcomings.”
Health insurers told to pay $150 billion in taxes over a decade to help fund Obamacare are now shifting at least part of that cost back to taxpayers.
Congress passed the insurer tax four years ago to help cover the uninsured under the Patient Protection and Affordable Care Act. Now, the industry is pushing to include some of the cost in contracts with Medicaid programs for the poor that are jointly funded by state and federal governments. The strategy may add $36 billion to $39 billion to the cost of Medicaid over a decade, depending on how quickly the health program expands, according to an industry-funded study released today by the actuarial firm Milliman Inc.