DCMedical News: December 19, 2017
DCMedical News
Washington, D.C.
Healthcare, Medical Education
December 19, 2017
Many States Will Be Called, Some May Be Up To It, or Not
2018 will undoubtedly find states called upon to sustain safety net programs in health care, health insurance, education and other areas. They may or may not be up to it.
A report from New York’s Citizens Budget Committee, found here, notes that New York heads into this coming election year with a reported budget gap in the $4 - $6 billion range, before accounting for federal policy changes. Complicating the revenue side is what the group calls “Gimmicks and One-Shots,” as well as previously pledged property tax and middle-income tax relief. No movement has been made (notwithstanding pledges at the special session) to shore up the $400 million+ of DSH funds for safety net hospitals not forthcoming from federal payments, nor is there a substitute for the $1.1 billion CHIP program in New York, the $4 billion “essential” health plan (low-income, not eligible for Medicaid), to say nothing of other critical infrastructure and service supports.
New York (and other blue states, high Medicaid states) got another lump of coal in the Christmas stocking from CMS’s Medicaid program, phasing out authority for so-called designated state health programs (DSHPs) under section 1115 demonstrations. CMS contends that the use of federal funds for state health expenditures for designated state health programs previously funded entirely by the state appears to have resulted in states “not contributing state funds toward these delivery system reform efforts.” Now, “CMS has determined that it will no longer accept state proposals for new or renewing section 1115 demonstrations that rely on federal matching funds for DSHP.” New York, with Medicaid north of $60 billion in annual expenditures, only 30% of which comes from the State, hasn’t much room for readjusting funds that support these efforts.
Other bad news comes from Illinois, nearly bankrupt, moving to Medicaid managed care according to Crain’s Chicago Business, “Outsourcing the bulk of the program to private insurers and paying them cheaper rates.” Iowa’s managed Medicaid was in meltdown in 2017. Kentucky’s managed Medicaid program (see our edition of December 11th) was suspected of chicanery by a judge, who ruled that managing the public’s money by private contract (not by public regulation) was unlawful.
And there will be a special session in Connecticut (even if not in New York), aimed at stretching dollars to underpin that state’s “Medicare Savings Plan” (the State’s disabled Medicare beneficiaries receiving some Medicaid support).
State appetite for major expansion to substitute for federal programs may be limited, however. Only one state (Massachusetts) has a requirement that individuals purchase health insurance coverage, a step being talked about in Covered California and in Maryland, according to “CQ HealthBeat News.” Eighteen states have statutory or constitutional prohibition against enforcement of an insurance mandate, according to the National Conference of State Legislatures. Without the mandate, CBO has projected 13 million uninsured people and a 10% increase in the cost of exchange health insurance premiums each year.
All of this (deterioration of the individual market) is in advance of implementation of the President’s October 12th Executive Order to see what might be done to favor Association Health Plans and short-term policies, both of which—excused from offering “Essential Health Benefits”—will undermine the sale of PPACA-compliant health insurance plans. Insurance estimates for 2019 rates begin to be filed in March of 2018. Controversy is bound to follow any proposed use of public funds to support “essential” health benefits, compulsory coverage (e.g., here), or indeed any measures which Congress and the Administration have just finished throwing out, especially in the face of limited state resources and the inevitable pressures which will follow from non-deductibility of state and local taxes.
CR to January 19th? CROmnibus? What Will Santa Leave Behind as the Holidays Press?
A continuing resolution (CR) to fund the government through January 19th has gained favor, as the complexity of including any actual content (defense > non-defense spending, with or without CHIP, FQHCs, C-SRs, Medicare extenders such as therapy caps) in such a resolution has become obvious, with the Friday (12-22) expiration of the current CR looming. CHIP and FQHCs appear to have bipartisan support (e.g., here), but a divide comes in the ‘Pay-fors,’ with House Republicans proposing the CHIP be paid for through PPACA’s “prevention and public health fund” and with higher premiums on wealthy MA enrollees.
Divisiveness over the one-sided tax bill (are you a real estate developer? commercial real estate landlord? If so, you did great. If not, not so great, maybe worse) also is in operation, as any budget agreement with content will require some Dems in the Senate.
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com