As a Medicaid Expansion Tool, Premium Support Leaves Neediest People Sitting on the Sidelines Again

It is way too early to break out the champagne over the latest Medicaid expansion initiatives bubbling up around the nation. 

States that have been reluctant to expand traditional Medicaid are ablaze with proposals to offer “premium support” to expansion populations. 

Premium support programs may differ in their details, but they have one thing in common.  Instead of offering regular Medicaid to an expansion population, the state pays the cost of their private insurance premiums.

Kaiser Health News reported last week that the Department of Health and Human Services is encouraging states to explore this approach.  MSN featured some “let’s make a deal” offers on expansion by a number of GOP legislators.  And Health News Florida reported a wave of bipartisan enthusiasm for a Florida premium support proposal that was unveiled after support for traditional Medicaid expansion collapsed.

For policymakers who don’t like Medicaid but want the federal expansion dollars, the benefits are clear.  They can prop up the private insurance market as an alternative.  They can allow children and parents in Medicaid-eligible families to be covered by the same insurance.  And they can make the Medicaid program appear smaller to the naked eye.

But based on expert evaluations, the benefits of premium support may not be so clear for today’s expansion populations.

By the early part of the last decade, at least seventeen states had premium support programs in some form, according to a 2005 report of the State Health Access Data Assistance Center.    

And from the perspectives of the states running them, the programs had some problems.

There were significant upfront costs and administrative burdens, difficulties in enrolling families, and challenges in defining the roles of employers.  And they often had to be supplemented by regular Medicaid, in which “wrap-around” Medicaid benefits were offered to close the coverage gaps in traditional insurance products.

From the perspective of potential Medicaid recipients, there were also some significant challenges. 

Writing in Health Affairs in September 2005, Janet Mitchell, Susan Haber, and Sonja Hoover compared the regular Medicaid program in Oregon with a premium assistance program also offered by the state.

They found that the families enrolling in the premium assistance program:

• Were less likely to be of Hispanic origin;
• Were more likely to have at least one parent employed;
• Had higher levels of educational attainment;
• Had better health status;
• Were more likely to have had experience with private insurance programs; and
• Were more likely to receive care in a doctor’s office, as opposed to a community health center.

We can divide today’s expansion population into three groups – better educated parents of SCHIP children who have a medical home and place a premium on staying well; parents who use safety net services episodically only when they are sick; and childless, mostly single, adults with chronic conditions.

Based on the evaluations, only the first group is clearly helped by premium support – provided enrollment is encouraged and simplified.

The second group may be helped, but only if the states put additional resources into education and outreach.

As the Health Affairs authors put it:

“If premium subsidy programs are to be successful in enrolling low-income families, the results of our study suggest that these programs may need to be accompanied by efforts to educate these families about the importance of health insurance and how it works.”

The third group is one for whom premium support may be no answer at all – low-income, uninsured childless adults who have chronic conditions.  Up to 6.6 million people in the Medicaid expansion population have mental illnesses or addiction disorders.

They already often have so many strikes against them – no medical home, underemployment, no children receiving Medicaid or SCHIP benefits, and stigmatization by policymakers who equate illness with entitlement.

They don’t need insurance with all of its profit motives, administrative costs, and bureaucratic tangles.  Their providers just need someone to help pay the bills.

And states need the $20 to $40 billion Medicaid expansion would add to their revenues over the next five years if people with behavioral illnesses were added to the regular Medicaid program.

Premium support is better than nothing. 

It may ultimately win the blessing of HHS, and in some states premium support may be the only path to expansion. 

But premium support is only a partial expansion of the Medicaid program – a concept rejected by HHS just months ago. 

And this partial expansion will leave some of those most in need sitting on the sidelines again.  

To reach Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/ 

Without Obamacare, We Would Have Even More School Crossing Guards

Adrian Dantley was a six-time NBA all-star who averaged over 24 points per game during his 15-year career.  He was inducted into the Naismith Hall of Fame in 2008.  He made good money and reportedly invested it well.

Today Adrian Dantley is 58 years old.  Like most 58 year-olds, he wants health insurance.  But the NBA does not offer health insurance to its retirees. 

So Dantley recently took a job as a school crossing guard – for the health insurance.  The story is all over the sports pages this week.  I’m sure that it is drawing more than its fair share of giggles and head shakes.

But I’ve known a lot of school crossing guards in my life.  And many do it for exactly the same reason.

As a summary of news reports recently digested by Kaiser Health News shows, it isn’t always easy for a 50-something retiree to get health insurance.

In just a few months, the Affordable Care Act will change this – and not just for 50-somethings.

But despite all of the attention to ACA in the three years since it was enacted, most of us still don’t really understand how it will affect us personally.

In recent weeks, some analysts and insurers have said to be prepared for sticker shock as 15-20 million currently uninsured people gain private insurance, and up to 17 million more move onto government-sponsored programs. 

So when a typical, middle income family has to buy insurance in this post-ACA world, what will it cost and what will they find?

The gross cost will indeed be high, but the net cost much lower.

You can plug your own numbers into the Kaiser Family Foundation’s excellent subsidy calculator and see for yourself. 

But this example will give you an idea.  The full premium cost of health insurance for a middle-class family of four making $46,850 per year will be $14,245 – almost one-third of that family’s total income.  They will then get back a tax credit worth $11,294.  So their net health insurance cost will be $246 per month.

And their ACA tax credit will be so big that they will end up paying virtually nothing in net taxes to the federal government. 

Instead, their entire tax burden – something that has historically supported spending on defense, highways, energy development, environmental protection, public health, education, social services, veterans’ services, childhood nutrition, and more – will essentially be returned to them to pay for their health insurance.

This will be true for many.  According to recent data from the Congressional Budget Office, the average ACA tax credit in 2014 will be worth $5,510. 

But, remember, you only get the credit if you personally pay the bill.

Where will we find our insurance, and what will it look like?

We will find insurance through new exchanges that seem as shrouded in mystery as the creation of the universe.

But when the exchanges come into existence in six months, they won’t be quite so exotic. 

We will just find a number of standard insurance plans from a variety of well-know insurers that we or our employers will be able to buy through premium payments and tax credits.  Nearly all will cover a standard set of health and mental health benefits.

Some plans will cover additional services, and be given a higher rating, “gold” versus “silver,” for example.  And co-pays and deductibles won’t disappear.  Premiums for insurance plans with lower deductibles will be higher; those with higher deductibles will cost less.

Health care procedures will still be covered, providers will still be paid, and insurers will still occasionally deny reimbursements for reasons that we can’t fathom.

Who will be left out?

If nothing else changes, in another three years thirty million people will remain uninsured. 

• Six million people who, for the privilege of avoiding the health insurance system in its entirety, choose to pay up to 2.5 percent of their income as a tax penalty to help pay for uncompensated care.
• Up to 12 million people with serious mental illnesses or addiction disorders who are currently not receiving care (except when they are in jail).
• Twelve million more who fall through the cracks, or are uninsured for short periods of time.

But at least Andrian Dantley and 68,520 others will have a choice.  They won’t have to work as crossing guards anymore just for the insurance.

To reach Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

A Political Leader Rejects the Safety Net That Saved His Family

Will Weatherford is a political name to remember, no matter where you live.

Weatherford is the Speaker of the Florida House of Representatives, a rising political star and a CPAC convention speaker this week, who “is widely regarded as a polished politician with excellent instincts,” according to the Tampa Bay Times.

I’m not so sure about those instincts.

In his opening speech of the new legislative session, Weatherford came out strongly in opposition to Medicaid expansion, saying it “crosses the line of the proper role of government.” He called Medicaid a “broken system.”  

But Weatherford wasn’t content to leave it at that.  He invoked a moving, personal narrative to introduce his opposition to the Medicaid expansion.

He told the tragic story of his young brother, who developed and died of cancer as an infant.  I can’t imagine what it was like for 15-year old Weatherford, his seven other siblings, or his parents to go through such a heart-wrenching experience.

And on top of it, Weatherford’s father was self-employed and couldn’t afford to insure his family.  I can relate.  I was also self-employed in the mid-1990s, and it cost me over $600 per month even then to insure my family. 

So when the six-figure hospital bills came, they could have wiped the Weatherfords out.

But they didn’t, because of a safety net that was in place.  “It was the safety net that picked my father up,” Weatherford said.  “It was the safety net that picked my family up.”

What Weatherford did not say was that the safety net was Medicaid. 

Afterwards, Weatherford denied that Medicaid paid the bills.  But after his father confirmed that it did, Weatherford was forced to back-track and acknowledge the role of Medicaid in his own family’s life.

This all happened in the mid-1990s. 

And, ironically, it seems that Weatherford’s family may have benefited from a Medicaid expansionthat took place just a few years earlier.  That mandatory Medicaid expansion occurred in 1989, and covered children up to the age of 6 up to 133% of poverty.  It meant that Weatherford’s brother became eligible for Medicaid via its “medically needy” program once the family’s income dropped below approximately $44,000.

That Medicaid expansion had its legislative detractors, too.  I was in a state legislature then.  I remember speeches in which legislators argued against both the expansion and the “medically needy” program because they didn’t think middle class families like the Weatherfords should be taking advantage of the program.  And U.S. Senators Mitch McConnell and Jesse Helms both recorded votes in opposition to the OBRA 1989 law that helped the Weatherfords. 

Maybe Weatherford is unaware of that history. 

But whether or not Weatherford is aware of history doesn’t change it.  Medicaid was only available for his baby brother because of federal expansions of the program that took place years before. 

And it became available to other children because of subsequent expansions. 

But it will only be available to their parents and older siblings if he supports this expansion.

Like Will Weatherford’s family, my family has benefitted from the Medicaid program.  During her final illness, my mother received Medicaid benefits through a special program in Connecticut so that she could remain in her own home and not have to enter a nursing home.  I have no doubt that this program extended her life.  I know that it improved its quality.

And my son, who has suffered from a life-threatening chronic disease for over twenty years now – one that cost him his education, his ability to work, and even his ability to live independently – has also used Medicaid as his safety net.

So here’s what bothers me most about Weatherford’s position.

It isn’t that we disagree about the safety net.  In fact, we are both openly grateful for what the federal safety net program called Medicaid did for our own families.

It is that his instincts failed him when he took for granted the political courage that it took to expand Medicaid in 1989 to help his family.  And they failed him again when he cavalierly dismissed the expansion today as if helping other families in need were all just a waste.  

He has a duty to see the bigger picture.   

He can start by embracing the program that embraced his brother.

To reach Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

Mental Illnesses a Leading Cause of Hospital Admissions, But Treatment Lags Behind

Would you send your mother to a pediatrician for her arthritis, or your child to a geriatrician for his well-baby exam?

Probably not – unless there were no other provider in town.

But some new reports from the Agency for Healthcare Research and Quality (AHRQ) suggest that something akin to that is happening every day to people with mental illnesses.

Two reports – Costs for Hospital Stays in the United States, 2010 and Most Frequent Conditions in U.S. Hospitals, 2010 – were released in January 2013.  The third, Most Frequent Procedures Performed in U.S. Hospitals, 2010, was released in February.

They make for fascinating reading, with an unexpected twist at the end. 

Spoiler alert – mood disorders are among the most common reasons for hospitalizations for people under 65.  But mood disorders aren’t driving the increase in hospital costs, because the procedures hospitals most often perform have nothing to do with treating people with mood disorders.

Mood disorders accounted for 877,000 hospital inpatient stays during 2010.  Apart from being born, they were the #1 reason that children under the age of 18 were admitted to hospitals, ahead of pneumonia, asthma, and appendicitis.

Mood disorders were also the 3^rd most common primary diagnosis among all people between the ages of 18 and 44.  The other four in the top five all related to childbirth and delivery.

And among adults between the ages of 45 and 64, mood disorders ranked 5^th as a reason for inpatient hospitalization, behind four conditions closely related to aging – osteoarthritis, back pain, chest pain, and coronary artery disease.

Mood disorders may be common reasons for hospitalization, but they have nothing to do with the recent increase in health care costs.

The mean cost of a hospital stay was $9,700 in 2010, up from $6,700 (in 2010 dollars) in 1997.  That represents a 45% increase over a thirteen year period. 

But the mean cost for mood disorders was less than half of that – just $4,800.  And what’s even more interesting is this.  That represented a 6% decrease from the $5,100 cost per stay in 1997.

On the other end of the scale, the most expensive hospital stay was for adult respiratory arrest, at $22,300.  In other words, we pay almost five times more for people to die in a hospital than to be treated for mental illness in a hospital. 

We also pay $18,000 to diagnose and treat an acute brain injury – four times than what we pay to diagnose and treat a chronic brain disease.

And in every age group, the most common procedures hospitals perform have nothing to do with mood disorders. 

Among children, hospitals most frequently offer vaccinations, circumcisions, respiratory intubations, and appendectomies.  Among younger adults, the most frequent procedures include those related to child birth and delivery – such as Caesarian sections and repairs of obstetric lacerations, and blood transfusions.  And among older adults, blood transfusions, cardiac catheterization, respiratory intubation, and upper GI endoscopy are most common, along with knee and hip procedures for the very old.

So what do we need to do to respond to the needs of people with mood disorders who are entering our hospitals?

The answer isn’t to deny or restrict care to patients with mental illnesses who show up at hospitals because they have no other place to go, or to force hospitals to discharge patients with mood disorders before they are ready to go, or to wait for jails to pick up the slack – as we do in so many places today.

We have choices.

One is to fund more community treatment programs – to replace those we lost to massive budget cuts – so that thousands of people can avoid hospitalizations in the first place.

And another is to insist that when patients are admitted to hospitals, our new mental health parity rules and regulations mandate payment for hospitals to use new procedures like functional MRIs (fMRIs) to diagnose more accurately – and therefore to treat more effectively – mental illness in their patients. FMRIs are brain scans that can show differences in brain activity that are correlated with specific mood and anxiety disorders. 

FMRIs aren’t exotic – they have already been used in consumer studies to measure consumer preferences for brand names. If we can use fMRIs to help sell cola or political candidates, why can’t we use them in hospitals to help treat mental illness?

We always have choices.

To reach Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/