JULY 5, 2012

Welcome to the Medicaid Update eNewsletter
This issue sponsored by the
Conference on Reaching, Retaining, and
Servicing Dual Eligible Beneficiaries

States Opting Out of Medicaid Expansion Could Leave Many Uninsured
The Supreme Court's ruling that the federal government cannot force a change to Medicaid, an existing program, has led many governors to state their intention to opt out of Medicaid's expansion. The expansion of Medicaid was expected to provide healthcare coverage to 16 million new people accounting for half of the 31 million people anticipated to receive coverage under the Affordable Care Act. (CBS News, July 3, 2012)

Medicaid and the States: An Offer They (Still) Can't Refuse?
This Christian Science Monitor blog describes the significance of the Supreme Court's ruling striking down the federal government's authority to withhold all Medicaid funding should states refuse to provide Medicaid eligibility to low-income, non-elderly adults. The federal government has long linked funding to acceptance of its rules by states (most recently, for example, funding for K-12 education linked to the No Child Left Behind program). In spite of the claim by many governors and legislators who have stated their intent not to participate, this blogger suggests that the benefits of full participation will, in the end, outweigh the costs since the federal government bears 100% of the costs in years one and two and 90% thereafter. (Christian Science Monitor, July 3, 2012)

What Actually Happens When You Expand Medicaid, as Obamacare Does?
The Atlantic ran this piece on June 26, 2012 in advance of the SCOTUS ruling on Medicaid's expansion. It provides background on the 2008 Oregon experiment which extended Medicaid benefits to 10,000 randomly selected participants. Researchers from Harvard and MIT analyzed the one year results and came to this conclusion per The Atlantic: "Expanding Medicaid leads people to use more healthcare. That, in turn, drives up costs. But it's also associated with a rise in financial security, as well as improvements in patients' perceptions of their own health (no data are available yet as to actual health outcomes; it's too soon to tell)." (The Atlantic, June 26, 2012)

The Medicaid Ruling's Ripple Effect
"I think this decision is going to embolden states to challenge federal mandates," said Sen. Charles Grasserly, (R-Iowa). This is a common reaction to the Supreme Court's ruling allowing states to opt out of the Affordable Care Act's Medicaid expansion. The ruling is likely to begin a series of legal challenges by states over the federal government's authority to attach strings to any federal grant money from education to transportation to the environment. (Politico, July 3, 2012)

Are ACOs the Answer for Medicaid?
Oregon's Governor John Kitzhaber, a physician, proposes Oregon's innovative Coordinated Care Organizations , a variation on the accountable care organization theme, as the answer for Oregon's Medicaid problems and suggests that other states should follow Oregon's lead. These organizations are risk-bearing entities of hospitals, physicians, counties and community organizations, operating under a global budget in which healthcare professionals share in any saving subject to meeting quality measures. (amednews.com, July 2, 2012

State Medicaid Spending Outpacing All Other Expenditures, Report Says
The National Governors Association (NGA) and the National Association of State Budget Officers (NASBO) report that Medicaid represented nearly 24% of total state spending in 2011, the largest single expense category for states. This has been the case in recent years and spending is projected to increase by 20% in 2012 but only 3.9% in 2013. The increases are linked to both the economy and the loss of the temporary funds provided by the American Recovery and Reinvestment Act of 2009. As a result, federal spending on Medicaid is projected to decreat by 8.2% in 2012. (Bloomberg, June 13, 2012)

Gradual Rebalancing of Medicaid Long-Term Services and Supports Saves Money and Serves More People, Statistical Model Shows
Rebalancing, the term for shifting Medicaid spending on long-term services from institutions to home and community-based services, can save as much as 15% over ten years if done gradually. The statistical model which analyzed fifteen years of state expenditures found that gradual rebalancing of approximately 2.0% per years was more effective than rapid rebalancing. (Health Affairs, June 2012)

How Much Do You Know about Health-Care Reform? Take Our Quiz!
Here is good test of your knowledge of the Affordable Care Act and the process surrounding it. (Christian Science Monitor, June 2012)

States Seek Medicare Data to Keep Fraudulent Providers Out of Medicaid
Medicare makes it difficult for Medicaid programs to access Medicare's data which is inhibiting the fight against Medicaid fraud. A former Medicare investigator who is now a Arizona's Inspector General has been largely unsuccessful in his efforts to keep fraudulent providers out of Arizona's Medicaid system. "The basic problem is lack of coordination and communication...there is no other way to explain it." That National Assocation of Medicaid Directors (NAMD) issued a report last month calling for Medicare to share its data. This would seem to be an important priority as the federal government itself (as opposed to the states) lost $22 billion on Medicaid and $43 billion Medicare to what it calls "improper payments." (Stateline [The Pew Center on the States], June 21, 2012)

Who Benefits from the ACA Medicaid Expansion?

This Kaiser Family Foundation Quick Take provides detail on the projected impact of Medicaid's expansion. (Kaiser Commission on Medicaid and the Uninsured, (www.kff.org/about/kcmu.cfm), June 20, 2012)

Click charts above for larger versions.

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Medicaid Moving Forward

Carol Backstrom, MHA
Senior Policy Advisor, Centers for Medicaid and CHIP Services, Center for Medicare and Medicaid, Washington, DC