By Steve Schulte of
Health Advocate Solutions
(213) 999-1227
Take just a moment to recall part of the high drama around whether there should be a public option as part of final healthcare reform legislation. Then, recalling that the arguments for this item failed, it is sobering to note how two huge government entitlement programs in addition to Medicare---Medicaid and CHIP---will be harnessed into implementing reform.
Medicaid (Medi-Cal in California) is the huge entitlement program traditionally funded by the federal government in large part, but administered by the states. Hence the good and bad news for Medicaid's involvement in reform. Coverage and funding, but within a balkanized system.
Just a few examples will suffice to illustrate problems: varying state levels of funding, varying state benefit packages, differing views of abortion rights, a patchwork of physicians and allied providers who would provide coverage, inequities in service and access, a method of paying for prescription drugs that is different than the rules used by Medicare. On and on.
Most policymakers saluted the passage of Medicaid soon after the passage of Medicare (which in 1965 under the leadership of Lyndon Johnson assisted the elderly--with a few exceptions for specific conditions). However, despite its virtues, Medicaid soon evolved into a "second tier" of care. Many eschewed its benefits even when eligible because it was seen as "healthcare for the poor".
Now, to expand care throughout most of the citizenry over the next few years this giant program---along with CHIP (the Children's Health Insurance Program) will become part of a vast expansion of healthcare coverage (perhaps 33 million new enrollees over time).
While good efforts will be made to ensure equal care nationwide it is easy to predict that in two to five years the fracturing, inefficiencies and unevenness of our current healthcare system will still be all too evident. Part of the way to a single payer system, in other words, with few of the benefits. Some would argue that this is the cost for attempting to maximize state variability and private market heft.
Some details:
The new law expands Medicaid eligibility to 133% of the federal poverty level ($14,404 for an individual; $29,326 for a family of four). This will add about 16 million individuals to the 35 million already enrolled in Medicaid nationwide. The Congressional Budget Office (CBO) estimates that states will have to then pay an additional $20 billion over what they now pay into the program now between 2010 and 2019.
People who are under 65 and not now eligible for Medicare will also be swept up in this expansion. Children currently in CHIP and who are between 100% and 133% of the federal poverty level will be included hereafter in Medicaid as well.
To attempt to capture as many uninsured as possible and to try to build a seamless coverage model, those between 133% of poverty and 400% will be offered subsidies so that they can purchase insurance through the state-based Health Benefit Exchanges. Thus the most sweeping expansion of enrollment through the new healthcare legislation.
As one can quickly see, however, some delivery differentiation still, some breaks in the system still. But this structure avoided a public option and still more intrusion by the federal government into the healthcare market.
It often slips beneath the public radar that private insurers are enlisted to offer products under both Medicaid and Medicare. That is, delivery is usually private (outside community clinics, for example) and reimbursement as well. Again, more fragmentation and differentiation in an already complex coverage system.
The pluses: rapid enrollment, use of already-in-place payment rules, fairly easy creation of "basic coverage" models, swift implementation of new, higher payment levels for pedicatricians and primary care physicians and a platform to reduce overall program costs---including reducing payments that now go to hospitals which treat large numbers of the very sick and indigent (Disproportionate Share or DSH hospitals).
But, in the long view: could we have done better with a public option?
This concludes my coverage of how Medicare, Medicaid and CHIP will be used in expanding U.S. healthcare coverage. Next I will turn to individual and employer changes.
Resources: Kaiser Family Foundation website and reports; the New York Times; the Washington Post series; Medicare.gov
Coming Soon: Seminars on the Impact of Healthcare Reform, Long-term Care Insurance, Medicare
To respond to this blog, email steve6schul@yahoo.com
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