Salary Caps too Low for Medicaid?

August 14, 2012 9:39 PM

Is a $5,000 salary too much for Medicaid?

(AP) MIAMI – Sandra Pico is poor, but not poor enough.

She makes about $15,000 a year, supporting her daughter and unemployed husband. She thought she’d be able to get health insurance after the Supreme Court upheld President Barack Obama’s health care law.

Then she heard that her own governor won’t agree to the federal plan to extend Medicaid coverage to people like her in two years. So she expects to remain uninsured, struggling to pay for her blood pressure medicine.

“You fall through the cracks and there’s nothing you can do about it,” said the 52-year-old home health aide. “It makes me feel like garbage, like the American dream, my dream in my homeland is not being accomplished.”

Many working parents like Pico are below the federal poverty line but don’t qualify for Medicaid, a decades-old state-federal insurance program. That’s especially true in states where conservative governors say they’ll reject the Medicaid expansion under Obama’s health law.

In South Carolina, a yearly income of $16,900 is too much for Medicaid for a family of three. In Florida, $11,000 a year is too much. In Mississippi, $8,200 a year is too much. In Louisiana and Texas, earning more than just $5,000 a year makes you ineligible for Medicaid.

Governors in those five states have said they’ll reject the Medicaid expansion underpinning Obama’s health law after the Supreme Court’s decision gave states that option. They favor small government and say they can’t afford the added cost to their states even if it’s delayed by several years. Some states estimate the expansion could ultimately cost them a billion dollars a year or more.

Many of the people affected by the decision are working parents who are poor — but not poor enough — to qualify for Medicaid.

Republican Mitt Romney’s new running mate, conservative Wisconsin congressman Paul Ryan, has a budget plan that would turn Medicaid over to the states and sharply limit federal dollars. Romney hasn’t specifically said where he stands on Ryan’s idea, but has expressed broad support for his vice presidential pick’s proposals.

Medicaid now covers an estimated 70 million Americans and would cover an estimated 7 million more in 2014 under the Obama health law’s expansion. In contrast, Ryan’s plan could mean 14 million to 27 million Americans would ultimately lose coverage, even beyond the effect of a repeal of the health law, according to an analysis by the nonpartisan Kaiser Family Foundation of Ryan’s 2011 budget plan.

For now, most states don’t cover childless adults, but all states cover some low-income parents. The income cutoff, however, varies widely from state to state.

Most states cover children in low-income families. Manuel and Sandra Pico’s 15-year-old daughter is covered by Medicaid. But the suburban Miami couple can’t afford private insurance for themselves and they make too much for Florida’s Medicaid.

Manuel Pico, a carpenter, used to make more than $20,000 a year, but has struggled to find work in the last three years after the real estate market collapsed. He occasionally picks up day jobs or takes care of the neighbor’s yard. Sandra Pico would like to work full time, but can’t afford to pay someone to watch her 34-year-old sister, who has Down syndrome.

“No matter how hard I work, I’m not going to get anywhere,” Sandra Pico said. “If you’re not rich, you just don’t have it.”

In San Juan, Texas, 22-year-old Matthew Solis makes about $8,700 a year — too much to qualify for Medicaid in that state. Solis, a single father with joint custody of his 4-year-old daughter, said he works about 25 hours per week at a building supply store making minimum wage and is a full-time college student at the University of Texas-Pan American. He aspires to be a school counselor.

He recently sought medical care for food poisoning, visiting a federally funded clinic. But he doesn’t see a doctor regularly because he can’t afford private insurance. The new health law allows young adults to remain on their parents’ insurance until age 26. But that doesn’t help Solis, whose father is uninsured and whose mother died of leukemia when he was 8.

“I voted for him (Obama) because he promised we would have insurance,” Solis said. “I’m pretty upset because I worked for Obama and I still don’t have coverage.”

His governor, Rick Perry, like Pico’s governor, Rick Scott, is rejecting the Medicaid expansion. So Solis too is out of luck unless his circumstances dramatically change.

In all but one of the states where governors are rejecting or leaning against the expansion, the income level that disqualifies a parent from Medicaid is below the federal poverty line. Only in New Jersey, where Gov. Chris Christie has said he’s leaning against the expansion, is Medicaid available to parents with incomes at the poverty line and slightly above. New Jersey will cover a parent making $24,645 in a family of three.

Most states base Medicaid eligibility for parents on household income and how it compares to the federal poverty level, which was $18,530 for a family of three in 2011, the year being used for easier state-by-state comparisons.

In Louisiana, the eligibility cutoff for a working parent is 25 percent of federal poverty, or $4,633 for a family of three. In Nevada, it’s 87 percent of the federal poverty level, or $16,121 for a family of three.

That’s been the range in states where governors are likely saying no to expanded Medicaid.

In contrast, states where governors have said they’ll expand Medicaid are more generous with working parents. The Medicaid eligibility cutoff ranges in those states from Washington’s $13,527 to Minnesota’s $39,840.

To be sure, some states with generous coverage for parents have been forced to cut back. Illinois, facing a financial crisis, ended coverage last month for more than 25,000 working parents. Even so, the state still covers working parents with incomes slightly higher than the poverty line.

The national health law’s Medicaid expansion would start covering all citizens in 2014 who make up to roughly $15,400 for an individual, $30,650 for a family of four.

The federal government will pay the full cost of the Medicaid expansion through 2016. After that, the states will pick up 5 percent of the cost through 2019, and 10 percent of the cost thereafter.

Why would a governor say no?

These state leaders are in favor of smaller government. In principle, they don’t want the federal government to expand — even if that expansion would help their own citizens. Also Medicaid is costly, taking a huge bite out of budgets already. And they don’t want to be on the hook for paying any more of the tab even if it’s years down the road.

“We don’t need the federal government telling us what to do when it comes to meeting the needs of the citizens of our states,” Florida Gov. Rick Scott wrote recently in an opinion piece for U.S. News and World Report. “And we don’t need Washington putting states on the hook for future budget obligations.”

Also, many conservatives view Medicaid as a wasteful, highly flawed program, akin to no health coverage. Many doctors across the country won’t treat Medicaid patients because the payments they receive are so low.

When the Supreme Court ruled that states could opt out of the health law’s Medicaid expansion, it raised the chances for inequity at a time when more Americans have fallen from the middle class into poverty, said Isabel Sawhill, a senior fellow at the Brookings Institution.

“Why should a sick person in Connecticut have access to health care when they don’t in Mississippi and Texas?” Sawhill asked. “We really do have a very high level of poverty as a result of the recession. And the safety net is weaker than ever.”

Medicaid, the nation’s single largest insurer, is a state and federal program created in 1965 as a companion program to welfare cash assistance to single parents. Today, the elderly and disabled cost nearly 70 cents of every Medicaid dollar, not the stereotypical single mother and her children.

What’s largely unknown to many Americans is who is left out of the safety net, said Cheryl Camillo, a senior researcher at Mathematica Policy Research. “A huge chunk of the populace is not covered, even by Medicaid,” she said.

The political rhetoric during a presidential campaign focuses on the middle class and leaves the uninsured working poor largely invisible, said Rand Corp. researcher Dr. Art Kellermann.

“We hear a lot of talk about unemployment and the aspirations of middle-class Americans. But we don’t hear about the consequences of unemployment and the consequences of the collapsing middle class,” Kellermann said. Losing health insurance is one of those consequences.

“It’s like the public just doesn’t want to believe anything else until it hits home,” he said, “Until it’s their own child, brother or parent that got laid off when they were 58, until then, it’s not real.”

 

Bloomberg Businessweek – Ryan Medicaid Plan

The other Paul Ryan plan: $800B in Medicaid cuts

By By Ricardo Alonso Zaldivar on August 15, 2012

WASHINGTON (AP) — There’s another Paul Ryan plan for health care, a fundamental change in caring for the poor and disabled that would affect many more people than the Medicare overhaul the GOP vice presidential candidate is best known for.

Under the Wisconsin congressman’s Medicaid plan, states would take over the program. At the same time, Ryan’s budget would reduce projected federal spending on Medicaid by about $800 billion over 10 years, dramatically shrinking it as a share of the national economy.

Medicaid serves about 60 million people, roughly 10 million more than Medicare. It’s a diverse population brought together by need. Most Medicaid recipients are low-income children and their mothers, but the costliest cases are severely disabled people, many of them seniors in nursing homes.

Ryan would also repeal President Barack Obama’s health care law, expected to add at least 11 million more people to Medicaid.

Ryan’s Medicaid plan is in sync with his new boss, Republican presidential candidate Mitt Romney.

“Gov. Romney … believes that states are far better positioned to design programs that effectively serve those in need,” said campaign spokeswoman Andrea Saul.

But no matter who runs Medicaid, such cuts would result in millions of vulnerable people losing health insurance, according to advocates for the poor and some nonpartisan economic analysts.

“Medicaid is already a very lean program,” said Edwin Park of the Center on Budget and Policy Priorities, which advocates for low-income people. “It is not a program where you can magically glean huge efficiencies by just devolving it to the states. The only way to compensate for funding reductions of this magnitude would be to institute deep, damaging cuts to beneficiaries and the health care providers who serve them.”

Bring it on, says Wisconsin Health Secretary Dennis Smith, who oversees Medicaid in Ryan’s home state. Smith, who works for Republican Gov. Scott Walker, says states can cut costs without gutting services by running Medicaid more efficiently.

“Everybody agrees that there is excess cost in the health care system, so by golly, give us the flexibility to address it, and we will,” said Smith. “We can serve the people on Medicaid with the adjustments the Ryan budget. We can make that work.”

For example, Wisconsin is now charging some low-income adults a modest monthly premium for Medicaid, tapping a new funding source to pay for valuable benefits, Smith said. And the state is looking for ways to help frail elderly people keep living at home, avoiding the costly alternative of a nursing home.

Growing enrollment has turned Medicaid into a big share of state budgets, and since Washington sets many of the rules, the program is a source of constant tension between federal and state governments. On average, the federal government pays about 60 percent of Medicaid costs, and states cover the rest. The Supreme Court recently gave some latitude to states chafing at Obama’s health care law, saying they are free to opt out of its Medicaid expansion.

Obama has largely shielded Medicaid from cuts in budget negotiations with Congress. But his administration has proposed new ways to allocate funding that could be used to dial back the federal share.

Ryan’s plan goes beyond tweaking. It would essentially rip up the Medicaid manual and start all over again. States would get a lump sum from Washington, a “block grant” indexed to reflect population growth and inflation. The idea has governors split along party lines.

Ryan’s Medicare plan, shifting future retirees to private insurance, would phase in over a decade or more. The Medicaid changes would come much more rapidly. The proposal has not been fleshed out, leaving many unanswered questions. For example:

—What happens if a state’s economy tanks?

Under current law, the federal Medicaid share is pegged to program enrollment, not population growth, said John Holahan, director of the Health Policy Center at the nonpartisan Urban Institute. That means federal funding increases when the Medicaid rolls swell. But under Ryan’s plan, “there are no provisions to automatically deal with recessions,” said Holahan. “The demand for Medicaid goes up at the same time state revenue is going down.”

—Would low-income and disabled people still have a legal right to coverage?

Converting Medicaid into a block grant would end the current right to coverage under federal law, and it remains unclear what rights could be preserved. Most analysts say states would insist on the flexibility to reduce their Medicaid rolls. The Urban Institute estimates that between 14 million and 27 million people would lose coverage because of Ryan’s spending restrictions.

—What sorts of safeguards would remain in place for seniors in need of nursing home care?

Although frail elderly people must spend down most of their savings before they can qualify for Medicaid, a federal law shields spouses from becoming impoverished. It’s unclear what would take its place.

Supporters of state control say governors and legislatures are closer to the people and would not harm their own constituents.

Back in Ryan’s state, the jury is still out.

Medicaid covers nearly 1 in 5 Wisconsin residents, and hospitals have a major stake in the outcome. Joanne Alig, senior vice president for policy with the Wisconsin Hospital Association, says they would need to know more about the plan to reach conclusions.

“While I think we are supportive of looking at alternatives to the Medicaid status quo, the devil’s in the details,” she said.

NY Times – Medicare Issue Hot in Campaigns

August 14, 2012

Two-Way Jabs on Medicare Recast Races for Congress

By

WASHINGTON — In one tight Florida House race, a hastily assembled TV commercial to begin airing Wednesday takes aim at a top target of Democrats, highlighting his votes “to end Medicare as we know it.”

Republicans in Montana are advertising on behalf of their Senate candidate, noting his stance against a Republican plan “that could harm the Medicare program.” House Republican strategists are advising their lawmakers to try to stay on the offensive over Medicare and steer clear of words like privatization.

The fight over Medicare, the popular federal health care program for older Americans, is rapidly intensifying in House and Senate races around the nation after the selection of Representative Paul D. Ryan as the Republican vice-presidential candidate. Congressional Democrats and some analysts say that development could transform the fight for control of Congress, given his role as the author of a House-approved budget plan that would reshape Medicare.

“A House budget plan is a House budget plan,” Senator Patty Murray of Washington, the chairwoman of the Democratic Senatorial Campaign Committee, said Tuesday. “But all of the sudden the architect and definer of that has the potential of sitting in the White House, and that is really frightening to people.”

Despite political anxiety expressed privately by some Republican strategists about Mitt Romney’s choice of Mr. Ryan, other top Republicans say that they welcome the fight over Medicare and that they believe they can win a national debate over the future of entitlement programs. They intend to paint the Democratic Party as the one putting Medicare at risk by failing to come up with a plan to keep it solvent as a wave of baby boomers approaches retirement age.

Mr. Romney said Tuesday that he would, if president, restore Medicare cuts that both President Obama and Congressional Republicans have backed and unveiled a new campaign advertisement trying to drive home that point.

“Paul Ryan and Republicans are the only ones who have stepped up with proposals,” said Senator John Cornyn of Texas, head of the National Republican Senatorial Committee. “These issues were going to come up anyway, and you might as well have your best and most articulate spokesman on the field making the case for it, and that is Paul Ryan.”

Mr. Ryan’s new prominence has abruptly thrust Medicare into the top tier of issues, but it was always going to be a theme in the 2012 House and Senate elections and was already playing a role in advertising.

Democrats had long intended to assault Republicans who voted for the Ryan budget in 2011 and 2012 and were trying to find a way to figuratively put Mr. Ryan on the ballot with his colleagues. Now Mr. Ryan will literally be on the ballot, and top Democratic strategists say that in picking him, Mr. Romney has given Medicare a huge boost as a driving issue that could lift Democrats in dozens of close races.

“Mitt Romney has given us a lot to work with,” said Representative Steve Israel of New York, chairman of the Democratic Congressional Campaign Committee. “It was becoming challenging to try to nationalize the Ryan budget, and Mitt Romney just handed that to us.”

House Democrats moved quickly on Tuesday to try to cash in. In a high-profile South Florida race, the Democratic candidate, Patrick Murphy, prepared a new ad against the Republican incumbent, Allen B. West, that highlighted Mr. West’s two votes for the Ryan budget while asserting that Mr. Murphy would “fight for seniors, protect Medicare.”

While the new commercial does not specifically mention Mr. Ryan, strategists said it was fashioned to capitalize on his joining the race for the White House. It is also the leading edge of what is likely to be a flurry of ads, Web activity and aggressive political advocacy as the two parties compete to shape the narrative on Medicare.

In addition to helping bankroll Mr. Murphy’s ad, the Congressional committee began automated phone calls in the districts of 50 Republican incumbents who voted for Mr. Ryan’s budget, which would turn Medicare into a voucher program for future retirees. In Nevada, a labor group is buying online ads that say the Romney-Ryan ticket would drive up costs for older Americans.

As Democrats pushed the idea of a political windfall, top Republicans say they believe the worry about Mr. Ryan is overheated. They say they were already bracing for a Medicare line of attack and are more than ready for it.

“We’ll take any opportunity to talk about Obamacare and the Medicare cuts that were included in it,” said Paul Lindsay, a spokesman for the National Republican Congressional Committee, who said that Republicans had learned how to contend with the issue after having debated it for more than two years already.

In a private message to candidates, House Republican leaders sought to allay any concern by providing material on how to respond to inquiries on Medicare, suggesting that candidates make the case that Democrats have their own lightning rod of a running mate: the new health care law.

The message also advises Republicans to choose their words carefully and emphasize “strengthen” and “protect” over phrases like “every option is on the table.”

Despite the Republicans’ confidence in their ability to counter the Democrats, the Senate race in Montana offered evidence that some party leaders recognize that the Ryan budget could be a liability.

The state party there paid for an advertisement on behalf of Representative Denny Rehberg, a Republican who is in a close race with Senator Jon Tester, a Democrat. It lauds Mr. Rehberg for his votes against the Ryan budget, a stance that the advertisement said showed his independence in partisan Washington.

The ultimate impact of the Ryan pick on Congressional races will become clearer in the days ahead.

“Certainly more Democrats are more enthusiastic than they were last week,” said Jessica Taylor, a senior analyst for the nonpartisan Rothenberg Political Report. “But whether it moves a ton of races, we are going to have to wait and see.”

Michael D. Shear and Sarah Wheaton contributed reporting from New York.