The Ten Best and Ten Worst States for Your Mental Health

Connecticut spends four times more per capita on state mental health services than Texas.  In Florida, 25 percent fewer people report having mental illnesses than in Washington.

Across the nation, there are significant differences in the amounts states spend on mental health services.  Connecticut spends $189 per capita, while Texas spends only $39.

But there are also significant differences in the reported prevalence of mental illnesses.  For example, fewer than 18 percent of Floridians report having a mental illness during the past year, but in Washington almost 24 percent do.

But what happens when you put spending and prevalence together?  Some new rankings emerge that give you a measure of each state’s real commitment to protecting mental health – and treating mental illness – in their population. 

This week, I have ranked all fifty states using both spending and prevalence data.      

I have taken per capita mental health spending from Kaiser Family Foundation’s State Health Facts data, and prevalence data from SAMHSA’s Summary of the National Survey on Drug Use and Health (NSDUH).  Both data sets are from the 2010-2011 time period.

It turns out that some states spend more than ten times as much as others on behalf of people with mental illness.

You can review the full list of the states along with the full set of the data I used here. 

But for now, if the commitment of state government is your measure, here are the ten best and ten worst states for your mental health.

The Best:

1. Maine.  Maine spends almost $1,900 per person with mental illness – 25 percent more than the next closest state.  It is tops in spending per capita, and but also 7^th best in percentage in percentage of people reporting mental illnesses.

2. Alaska.  Alaska is middle-of-the-pack in prevalence, but it is second in spending per capita.  The result?  Alaska spends just under $1,500 per person with mental illness.

3. Pennsylvania.  Pennsylvania is 3^rd overall in spending, but only 16^thbest in prevalence.  That still results in spending of over $1,400 per person with mental illness.

4. New York.  New York is 4^th in spending, and middle-of-the-pack in prevalence.  It spends over $1,200 per person with mental illness.

5. Vermont.  Like New York, Vermont is 23 places higher in spending than in prevalence.

6. New Jersey.  New Jersey is 3^rd best in prevalence, but still spends over $1,100 per person with mental illness.

7. Arizona.  Arizona is only 36^th best in prevalence, but it invests well in mental health services, spending $1,044 per person with mental illness.

8. Connecticut.  Connecticut is one of eight states that spend at least $1,000 per person with mental illness.  It pays off for a state that is tied with Georgia for 9^th best in prevalence.

9. North Carolina.  North Carolina’s high ranking is driven by a 4^th best ranking in prevalence, and top twelve spending per capita.

10. Hawaii.  Balance is the key to Hawaii’s ranking – 15^th in prevalence and 10^thin spending.

And the worst:

41. South Carolina. South Carolina ranks 23^rdbest in prevalence, but is 43^rd in spending.

42. Louisiana.  Louisiana is 35^th in prevalence, but it is not enough to nudge up its overall ranking.

43. Utah. Utah is 49^th in reported prevalence of mental illness – a surprise for a state that regularly ranks near the top in other health categories.  It spends only $263 per person with mental illness.

44. Kentucky.  Kentucky is middle-of-the-pack in prevalence, but spends only $259 per person with mental illness.

45. Georgia.  Georgia is tied with Connecticut for 9^th best in prevalence, but it by spends only one-quarter as much per person with mental illness.

46. Oklahoma.  Oklahoma earns its ranking by placing 40^th in prevalence and 45^th in spending.

47. Florida.  Florida ranks second in prevalence, but only 48^th position in spending per capita.  As a result, it spends just $222 per person with mental illness.

48. Texas.  Texas – which has the lowest prevalence of mental illness – still spends only $221 for each person with mental illness.

49. Arkansas.  Arkansas is one of only two states spending less than $200 per person with mental illness.  It is among the worst in both spending and prevalence.

50. Idaho.  Idaho is far and away the worst state for your mental health.  It is worst in reported prevalence and worst in reported spending.  How bad is Idaho?  At $143 per person, it spends less than one-tenth as much per person with mental illness as do Maine, Alaska, and Pennsylvania.

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

A Long Road Back To Sanity - States Finally Reversing Cuts to Mental Health

All over the country, governors are finally beginning to propose new mental health services funding in the aftermath of last year’s mass shootings in Aurora and Sandy Hook.

Notes: OH funding is from existing OHT appropriation.
CT funding is bond money, some of which may
be used by non-MHSA providers.

There will be a long road back to policy sanity.  We have to dig ourselves out of the mess caused by $4.6 billion in state mental health cuts over the last few years.  But these governors give us hope that the funding-cut nightmare over which many of them have presided may be finally coming to an end. 

In recent weeks, both Republicans and Democrats have announced new community behavioral health funding initiatives, typically ranging between $5 million and $20 million.  

But support for community mental health services is not universal.  In states with the worst track records in funding mental health services, their governors continue to be sadly out of step with their colleagues across the nation.

In Idaho, which has recently dropped to the bottom of mental health services spending, Governor Butch Otter’s major mental health initiative in the aftermath of the Sandy Hook shooting is for $70 million to construct a 579-bed “secure mental health facility” on the grounds of the state’s prison south of Boise.  That would be considered progressive by late 19^th century standards.

At least Otter’s proposing to do something.

Florida has been at or near the bottom of mental health spending for years.  But Governor Rick Scott – whose administration just cut millions more away from community mental health services in October – seems to think that if he just ignores the problem it will go away.  He requested no new dollars for mental health services in his 2014 budget.

But in the rest of the country, the emerging news is much better.  In the last month or so:

According to the Lansing State Journal, MichiganGovernor Rick Snyder said he will seek $5 million in new funding for mental health services to identify young people with mental health needs.  Michigan has cut $124 million from community mental health programs since 2004.

In Missouri, where eighteen months ago Anna Brown’s death in a St. Louis jail after she was refused care in a hospital emergency room drew national attention, Governor Jay Nixon is proposing $10 million in new mental health funding, primarily for a hospital emergency room diversion program.

In Colorado, Governor John Hickenlooper, whose state suffered through the Aurora mass shooting last summer, has proposed spending $18.5 million in new funding, including over $10 million for five urgent care centers for people with mental illness and a statewide 24-hour hotline.

In Connecticut, the site of the Sandy Hook massacre, Governor Dan Malloy proposed $20 million in new bond funding to assist community behavioral health providers with infrastructure projects that providers say have either been set aside because of budget cuts or have been draining money needed for direct services.

Kansas Governor Sam Brownback, saying that he was committed to strengthening the state’s community mental health system, announced his support for an additional $10 million to increase funding to 27 community mental health centers and to establish a regional system of peer support, intensive case management, crisis intervention, and other evidence-based services.

Oklahoma Governor Mary Fallin announced that she will seek $16 million in new mental health services funding - $8 million for existing programs and $8 million for new programs, including early intervention programs for children and a new state-supported mental health crisis center.

And in Ohio, Governor John Kasich reported that he was authorizing the expenditure of $5 million from an Office of Health Transformation discretionary fund to support children’s crisis intervention services.

These represent just a handful of states taking action, but a cross-section as well. 

The reasons the governors made these proposals may vary.  Some governors may be avoiding gun control debates.  Others may still erroneously equate mental illness with violence. 

The mental health funding initiatives the governors are proposing, however, are needed. 

The governors are working to improve community mental health systems.  They are calling for early identification and treatment of mental illnesses in children, adding new crisis intervention services, and addressing other neglected priorities in their own states. 

And while the numbers may pale in comparison to the cuts made in recent years and won’t undo the damage overnight, they are steps in the right direction. 

These steps should be embraced by legislators in their states, and in states with less understanding governors.  

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

Florida's Medicaid Expansion Rejection Will Cost Residents

There was a fascinating news report out of Arizona this past week that embracing the ACA Medicaid expansion will result in $8 billion in new federal dollars flowing into the state over four years – in return for an investment of $1.5 billion from the state.

That looks pretty good on the surface, and the 435,000 people who will become insured as a result are a nice bonus.

What many people don’t recall is that Arizona was the last state to enroll in the Medicaid program.  So a report such as this from a state whose embrace of Medicaid was a long time coming is especially noteworthy.

After seeing numbers like that, I can’t help but wonder what might happen if the state decides not to expand Medicaid.  Its residents could lose a lot of money in return.

This is what Florida is facing.

We can calculate just how much money every resident of Florida will lose by reviewing what Florida Attorney General Pam Bondi wrote to the Supreme Court this past January:

Florida estimates that, as a result of the ACA, its share of Medicaid spending will increase by $1 billion annually by the end of the decade. Florida anticipates spending approximately $351 million on its share of the cost for newly eligible program participants who are presently uninsured and $574 million on the currently eligible but unenrolled.

Setting aside for the moment the $574 million she attributed to currently eligible people – who will be entitled to Medicaid whether or not the expansion goes through – let’s accept her calculation that the expansion population will cost the state $351 million annually “by the end of the decade.”

This means that the federal government will be sending at least $3.2 billion to Florida annually in 2020 if Florida accepts the Medicaid expansion.

That comes to $168 Florida will forfeit per person per year if it rejects the expansion, which represents a 90% share of the cost of the expansion.  And the forfeit is even higher in the years before 2020.

These are dollars that Florida residents will have to pay out of pocket if the federal funds don’t flow.

Here’s why.  Estimated Medicaid expenditures represent just that – projected actual health care expenditures, not insurance premiums or some other indirect cost.

So the $3.5 billion will be spent, one way or the other.  In the absence of Medicaid expansion, it will be paid by state and local taxes, offset in part through charitable giving, or financed through private insurance premiums (with an additional 15% administrative overhead). 

In other words, the $3.5 billion won’t just disappear into the atmosphere somewhere.

When Mitt Romney, who along with Florida Governor Rick Scott opposes the Medicaid expansion, was asked for an alternative, he must have felt put on the spot.  Because he suggested that hospital emergency rooms could take up the slack, although he knows that hospital ERs are the last place a community wants to provide indigent care.  This is because the cost is so high. 

I’m not happy about having to cough up $1,244 over the next seven years so that my governor can make a point that he doesn’t like a federal law. 

I already get that, and understand that he and the six other governors who are thinking like him are probably a lost cause to my way of thinking.

But most of our state legislators are running for office this fall, and they may actually care what we think.  I think we can do a lot of good with $3.5 billion.  So I’ve got a question for them. 

Who’s got a better idea than expanding Medicaid for paying this $3.5 billion bill? 

The Biggest Environmental Disaster of the Decade

Here is a cautionary tale about the risk of downplaying the importance of environmental health.

A year ago, Fukushima City was a bustling city with a population of 290,000.  Its people were going about their business the day the earthquake and tsunami hit northern Japan, triggering the biggest environmental disaster most will ever experience.

At first, the trains stopped running because of damage to the railways, and most of the city’s water stopped running because of ruptures in water mains.

Over the next several days, a silent toxin began to spread along with word of the natural disaster.  The Fukushima nuclear power plants, 39 miles southeast of the city, began melting down, releasing radioactive particles into the air and water. 

Although Fukushima remained outside the quarantined evacuation zone stretching twelve miles out from the nuclear facility, waves of radioactive cesium dust escaped the zone, flying on the winds toward the city.  As it rained and snowed, the cesium dust fell to the ground, infiltrating homes and businesses, hospitals and markets, roadways and parks. 

A year later, the Fukushima government is still trying to save people’s homes by cleaning up a deadly environmental mess.

If you have ever experienced a home construction or renovation project, you have an idea of what environmental health officials are facing.  When you tear down a wall, sheetrock dust collects everywhere and sticks to everything – furniture and floors, wall hangings, clothes, and even inside cupboards and cabinets.  To clean it, you have to wipe down everything individually.  And what you don’t catch goes back into the air, eventually needing to be cleaned up again.

Now imagine that this dust were completely invisible and radioactive, and both indoors and outdoors.  That’s what the people of Fukushima have to clean.  Building by building and property by property, they go about their task.  They can’t just wash the cesium down the drain.  They have to dig out the top two inches of their landscapes, and cart away the vegetation and dirt as radioactive waste, or create mini nuclear waste dumps by burying everything contaminated in deep holes in their own backyards.    

If just one property owner refuses, then as it rains again, the entire neighborhood can be re-contaminated.

We should all know by now that Fukushima’s story today could be Hartford’s, Miami’s, or West Palm Beach’s tomorrow.  Hartford is just 40 miles from the Millstone nuclear plants, Miami is 25 miles from the Turkey Point nuclear plants, and West Palm Beach is 40 miles from the Jensen Beach nuclear plants.

If a Fukushima-level event hit near me or my family, I’d want a strong Health Department with a clear environmental health mandate ready to respond. 

But that’s not what people in Florida are getting.

Last week, Florida’s State Legislature passed a law eliminating the Division of Environmental Health from the State Health Department.  It also eliminated the Community Environmental Health and Healthy Communities, Healthy People programs.  The Florida Public Health Association and others fought valiantly against these changes.

Not only did the legislature eliminate the Division of Environmental Health, it removed from the Health Department’s duties in section 381.0011 of the Florida statutes the power to quarantine “premises as the circumstances indicate for… providing protection from unsafe conditions that pose a threat to public health.”

Faced with a Fukushima-level event, radioactive or otherwise, the Florida Health Department will no longer have the independent power to create an evacuation zone to protect the public health.

The legislature did give some quarantine responsibility back to the Department as an amendment to section 381.00315 of the Florida Statutes.  But in that section, the Department’s authority is severely restricted.  It must consult with any agency that might be affected, its quarantine order is limited to sixty days, and violations of the order are punishable by as little as a $500 fine.

In other words, if the Fukushima meltdown had happened in South Florida, any general quarantine orders related to Miami would have expired ten months ago, and the only penalty for repeated re-contamination of a neighbor’s property might be a $500 fine.

Political leaders often embrace nuclear energy and many other industrial contaminants, in spite of the risks and costs.  These risks may not bother them, but at the very least they could give the rest of us a modicum of protection.

Otherwise, the biggest environment disaster of the decade may not be the one we witnessed in Japan.  It could be the one that just played out in the Florida legislature.

If you have questions about this column or wish to receive an email notifying you when new Our Health Policy Matters columns are published, please email gionfriddopaul@gmail.com.

Seven Problems With Florida's Medicaid Managed Care Reform

In my last column, I described Florida’s new Medicaid managed care and previewed a few of its implications.

In this column, I look closely at seven problems in the law.  

First, Medicaid recipients will be asked to pay $10 per month to participate in the program, and $100 for each non-emergency use of a hospital emergency room. 

This will increase Medicaid costs, not lower them.  Charging even $10 a month for Medicaid encourages people to avoid enrolling in the program until they get sick. What they don’t get is preventive care, so their care costs more. 

Half of all emergency room visits are “non-emergency,” but the patient doesn’t know this until after he or she gets the diagnosis.  For example, chest pain is sometimes indigestion, but other times, a heart attack. You don’t want someone who might be having a health crisis to delay receiving care because they don’t have $100.  If they do and guess wrong, their care will only cost the state more.

Second, Medicaid recipients will be required to share their complete medical records with the government. 

There is no reason for this, and this kind of privacy invasion isn’t popular with anyone.  We may not care when it happens to someone we don’t know, but watch how we react when it happens to mom in the nursing home. 

Third, Florida has created a Medicaid profit-sharing plan which encourages managed care companies to drive up costs in the first year and take them back in profits the second year. 

The law allows plans losing money in the first year to recoup those losses in the second year.

This creates a perverse incentive for organizations.  Because they don’t have to worry about first-year losses, they have an incentive to enroll the highest cost patients possible in order to maximize their payment rates.  If they then crack down on utilization in the second year, they can maximize their profit potential at little or no risk. 

Fourth, Florida’s plan creates a really perverse economic incentive for the state. 

The higher the profit made by a managed care company, the more the state gets back as a rebate. 

If the state has a future budget crisis, it could be tempted to manage that crisis by pressuring its managed care partners to deny or delay care to recipients – especially in the latter part of a fiscal year – to increase the amount of the rebate the state will receive.

Fifth, each plan must offer smoking cessation, substance abuse treatment, and “medically directed weight loss” programs. 

Personally, I support this.  However, when “the government starts telling us what we can and cannot eat,” a lot of small-government advocates (including some Florida legislators) claim they draw the line.

Sixth, Medicaid recipients who are found judicially or administratively to have engaged in Medicaid fraud will forfeit their Medicaid eligibility for ten years. 

This sounds fine, but what happens when an addict is found “administratively” to have engaged in fraud by pill shopping among providers?  Or when a person with mental illness is found “administratively” to have engaged in fraud by claiming phantom physical complaints?  Do we really intend to discriminate against certain people for their medical conditions?

Also, what happens when someone found to have engaged in fraud develops a high-cost condition, such as cancer, several years later?  Does this “one-strike-and-you’re-out” policy mean the state expects providers to cover the future cost of care without any reimbursement?

Seventh, Florida’s Medicaid reform re-introduces hospital rate setting. 

A generation ago, in a far more “big government-friendly” era, Medicare adopted a prospective payment system to set hospital rates.  It used “diagnosis-related groups,” or DRGs to do this, and several states used DRGs to establish hospital rate-setting systems.  While Medicare has retained and adjusted its DRG system, most other DRG-based rate setting vanished years ago.

DRGs, however, will re-appear in Florida in 2013. The legislature has directed AHCA to develop a DRG system for Medicaid.    

Here are two reasons why this won’t work as intended.  The first is that Medicaid patients are a far more diverse group that the Medicare population.  Forcing hospitals to work within pre-set DRG rates can be extraordinarily unfair to the hospitals serving the neediest and most complex of patients.

The second is that the only way hospitals can guard against DRG harm is to engage in the legal practice of “DRG creep.”  Hospitals have a financial incentive to assign the highest-paying diagnosis code possible to every patient they see.  The result?  Rates may come down, but costs will go up.

Florida’s Medicaid reform has been called transformational.  Life is full of transformations. Some last, but others fade quickly.  The new Florida law may seem like big change, but its promised benefits may soon be regarded as something of a mirage.

The Florida Medicaid Reform Law is the result of the passage of two separate bills, HB 7107 and HB 7109. Information referenced in this column can be found in the text of one of the two bills.  If you have a question about the specific location of any text, please contact the author at gionfriddopaul@gmail.com.

Florida's Disappointing Medicaid Reform

Florida’s Medicaid reform law, which takes effect on July 1, mandates the enrollment of most of Florida’s 3 million Medicaid recipients into managed care programs.  It has been called transformational, but it probably won’t deliver on its promise.

There is a lot to write about, so I’m devoting two columns to the subject – and publishing them both this week, instead of one this week and one next week. 

This column focuses on the details of the new program.  It explains how first year cost savings are unrelated to managed care, why families of nursing home residents in particular should be worried, and how a new profit motive has been built into the Medicaid program. 

My next column will focus on seven policy problems built into the new law.   

While managed care got the headline, the first-year savings in the legislation come from a 5% provider rate cut, not from managed care. 

Medicaid will still be a $20 billion+ program.  It will still consume nearly a third of the state budget, and it will still expand significantly in 2014.

By incorporating the 5% cut into the law, Florida legislators anticipated a possible rejection of the managed care program by the Department of Health and Human Services. 

HHS has problems with Florida’s approach.  Florida Senators threatened to drop out of the Medicaid program if HHS did not approve the changes, putting $11 billion at risk.  Cooler fiscal heads prevailed, and this threat was dropped from the final version.

Assuming HHS eventually agrees, the Florida Medicaid program will be divided into three parts.

One will serve mostly elderly people with long term care needs.  Another will serve families, children, and adults with chronic health and mental health conditions.  The third will serve people with developmental disabilities.

Nearly everyone in the first two groups will be required to enroll in managed care plans.  Those in the third group will not.  They will keep their current Medicaid program, but payments will be capped and a plan for restructuring it will be submitted to the Legislature by 2014.

For the other two groups, the state will be divided into 11 regions.  Between two and six managed care plans will serve each region.  There will be separate plans for the long term care group and the families and children group.   One of the plans approved for the long term care group in each region must be offered by a Long Term Care Service Provider Network, led by a long term care provider.  One of the plans approved for the families and children group in each region must be offered by a Provider Service Network, led by a hospital, public agency, or other safety net provider.

The long term care program will be fully operational by October, 2013, and will include incentives to transition as much care from nursing homes to the community as possible. 

The CARES (Comprehensive Assessment and Review for Long Term Care Services) evaluation system will be used to determine each Medicaid recipient’s level of need.  Level 1 recipients must be in a nursing home.  Level 2 recipients still living in the community must have extensive physical or mental impairment.  Level 3 recipients will have mild physical or cognitive impairments.

Payments to plans will be based on three levels of need of the patients in each plan.   

For the first year only, all nursing home patients will be protected from discharge, whether or not their level of need changes.  However, plans will receive incentive payments from AHCA for every 2% shift in their population toward community care in either the first or second year, and for 3% shifts in subsequent years.  Incentive payments will continue until no more than 35% of plan recipients are in institutional settings.

So what could happen to an elderly nursing home resident? 

After the first year, any time her level of need is determined to be less than Level 1, she could be discharged to home care whether or not she or her family agreed.

Also, a managed care company with a motive, not a family and a clinician, will decide when an Alzheimer's patient needs institutionalization.

This new Medicaid program puts a premium on profits. 

In the families and children program, most recipients will have 30 days to choose a plan.  If they don’t, they will be assigned to one.

The state will negotiate rates with plans based on a “per member per month” fee, adjusted for the region and clinical profile of the patients in the plan.  For the first two years, provider service networks will have the option of receiving traditional fee-for-service payments.

Plans will be able to take up to 8.5% in profits, and the state will be their silent business partner. 

Here’s how this works.  Plans can retain the first 5% of total income received as a profit.  They can make another 1% if they exceed state quality measures.  They capture 2.5% of the next 5% of profit.  The rest goes to the state.  After that, all profits go to the state.

Plans are protected from losses in the first year.  The law allows them to subtract those losses from income during the second year.  A plan losing 5% in the first year will be allowed up to 13.5% in profits in the second year.

Is creating a profit motive for safety net health care really such a good idea?

The Florida Medicaid Reform Law is the result of the passage of two separate bills, HB 7107 and HB 7109. Information referenced in this column can be found in the text of one of the two bills.  If you have a question about the specific location of any text, please contact the author at gionfriddopaul@gmail.com.

Florida's $11 Billion Medicaid Gamble

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Treating the public policy arena like a casino is never a good idea.

Florida is placing an $11 billion bet on Medicaid this year.  If the state loses, we’ll all be emptying our pockets for lower services.

The bet involves moving all Medicaid recipients to managed care.  As reported in an article by Jim Saunders in Health News Florida last week, passage of this legislation this year is as close to a sure thing as there is in government.

Florida hopes to save $1 billion the first year, and $2 billion by 2013 – nearly 10% of the total State Medicaid budget.

There are three problems with this calculation.

The first is that the projected savings from moving to managed care might be too high.  In a 2009 report prepared for America’s Health Insurance Plans, the Lewin Group found that savings in 24 different state Medicaid plans ranged from half of one percent to 20% after a switch to managed care.  Savings tended to be low at first, and most were still in the single digits after several years.

The second is that the savings will be offset by lost federal revenues, because the federal government will reimburse at least 55% of Florida’s Medicaid costs the next two years.  The actual savings to taxpayers is under $1 billion in FY2013, less than half of what the Governor and legislators are claiming.

The third problem is that to achieve these savings, Florida has to include elders and people with disabilities – who together account for 70% of Medicaid expenditures – in managed care.

To many people, “managed care” means the same thing as “care delayed or denied.” If $700 million of Florida’s Medicaid savings come from denying care to nursing home residents, cutting back on treatment services to people with mental illness, and delaying care for people with mental retardation, legislators fighting Medicaid growth won’t exactly be hailed as conquering heroes.

Together, these factors leave at most $300 million in savings associated with the non-long term care Medicaid program.

But the savings may not be even that high.

The reality is that Florida had a much slower growth rate in its Medicaid program from 2004 through 2009 than did the nation as a whole. The cumulative savings in Florida over this period was 10% compared to Medicaid spending in the nation as a whole.  Florida may have already squeezed the savings from Medicaid without resorting to managed care. 

Also, there is a new cost associated with turning the program over to the private managed care companies.  Unlike the state, these companies have to make money, which has to be added into the cost calculation.

Finally, reports authored by Jack Hoadley and Joan Alker of the Georgetown Health Policy Institute and released yesterday by the Jessie Ball DuPont Fund suggest that Florida’s own Medicaid managed care pilot program has disrupted care for Medicaid recipients while saving little or no money. 

In the face of all this evidence, saving even $300 million in Medicaid non-long term care is a long shot. 

So on what is Florida wagering $11 billion? 

Senator Joe Negron, the Senate legislation’s sponsor, says that Florida will drop out of the Medicaid program if the Federal Government refuses to go along with Florida’s managed care plan.

That’s an $11 billion gamble – the annual Federal reimbursement that Senator Negron says Florida will give up if the federal government doesn’t let it switch to managed care.      

Obtaining federal approval for unpopular Medicaid changes which could disproportionately and adversely affect elders is no sure thing.     

If Florida drops out of Medicaid, 3 million Medicaid recipients will become uninsured.  This will bring the total number of uninsured people in Florida to close to 7 million – more than 35% of the population.

Hospitals, nursing homes, independent physicians, community health centers, mental health centers, and other providers do not have the capacity to absorb care for 7 million uninsured people. 

Instead, Florida would have to create and fund a new plan to pay for the care of all 7 million people.  To do this, it would have 9 billion state Medicaid dollars with which to work. 

$9 billion – or $1,300 per person – may seem like a lot of money to provide care for these 7 million people.  But they aren’t young and healthy – remember, 70% of the Medicaid dollars go to long term care – and one nursing home bed alone can cost fifty times this amount.

$9 billion could disappear in a matter of weeks.

Florida can’t afford the gamble.  If saving $300 million in the Medicaid non long-term care program is the state’s goal, it should either find out in advance if the federal government is willing to approve or find another way to do it.   

After all, Florida’s not playing with house money, but ours.      

Slaying the Medicaid Monster

Legislators have created a Medicaid monster, which eats up 22% or more of their state budgets.  Now they want to slay it. 

However, they’re not seeing the real monster clearly.  Cutting the legs out from under Medicaid recipients isn’t the same as cutting the monster down to size.

A Florida bill illustrates how states are attacking the wrong things. 

Under a Florida Medicaid reform proposal, Medicaid patients would be charged $100 for non-emergency visits to a hospital emergency room.  The purpose is to save money by discouraging unreasonable use of emergency rooms. 

Nearly half of all visits to emergency rooms are for non-emergency reasons.  This is true of Medicaid patients, insured patients, and uninsured patients.  The main reason the percentage is so high isn’t that people choose to go to the emergency room for minor complaints.  Laypeople aren’t qualified to diagnose their own emergencies.  Health professionals tell them to use emergency room because it’s better to be safe than sorry.

Here are three true-life examples that illustrate the point.

• A 56 year old man complains of chest discomfort and shortness of breath, and the paramedics who respond advise him to go to the hospital immediately.  Even though clinicians describe his symptoms as those of a classic heart attack, the tests are negative. It is a false alarm. 
•  A 35 year old woman walks into the emergency room complaining of an upset stomach.  She is examined and advised to take an antacid.  She reports feeling better and is discharged. Several days later she is admitted to the hospital in severe pain, and is diagnosed with an ovarian cyst. 
• Three times in two weeks, a young man enters the emergency room complaining of leg pain.  Clinicians suspect that he may be shopping for pain pills.  They find nothing wrong with his leg, and discharge him.  A few days later, the patient is in the hospital after attempting suicide.  His complaint was about his leg, but his problem was his mental illness.

Who is to say which of these patients shouldn’t have gone to the emergency room?    

When people need health care someone has to pay for it.  For too long, states have taken the position that this should be someone else.  Letting people at the poverty level shoulder more of the burden through $100 charges is just the latest strategy. 

This is because imposing a $100 charge on patients will cause care to be deferred, delayed, or denied.  People will try to wait out their emergencies.    

This won’t matter to the 56 year old who didn’t have a heart attack.  He’ll be fine the next day.  The woman with the ovarian cyst and the suicidal man won’t be so lucky.

Medicaid isn’t a monster.  It’s a lifeline for people who need health care. 

It is also a lifeline to the states.  It may absorb 22% of their budgets, but it also supplies 15% or more of their total projected state revenues.  The federal government reimbursed states for an average of 57% of their costs through 2009, 66% in 2010, and will pay 90-100% of the cost of program expansions under health reform. 

This payment results in four times the amount of revenue states receive from corporate taxes, and almost as much as they raise from all state income taxes combined. 

Like the governor of Texas, some Florida legislators are threatening to drop out of the Medicaid program unless the federal government agrees to let them cut Medicaid benefits to the elderly, children, and lower middle class families.  The Governor of Texas dropped this idea when his commissioner reported how much harm this would do to the state. 

The way for states to control Medicaid costs isn’t to make it harder for people to receive Medicaid benefits.  States need to fix the mistakes they have made over the years that have led to higher costs, not compound them. 

First, they reduced Medicaid reimbursement to physicians and other providers to such a low level that most dropped out of the program.  In many areas, the only Medicaid providers left are the hospitals, so that’s where Medicaid recipients go for care.  To its credit, Florida is following the federal government’s lead and considering higher reimbursement rates for some providers.   

Second, they limited community care, home care, and non-health care options to people on the program, and refused Medicaid to people with mental illness, pushing them into higher-cost treatments.

Third, they forced recipients into managed care programs that did a better job of denying care than coordinating it, making the population sicker.

Fourth, they put healthier, working people with incomes slightly above the poverty level onto county and local programs that receive no federal reimbursement.

Despite the harm they’ve done, some of these mistakes are still on lists of state-proposed “reforms.”   

That’s the real Medicaid monster.

The Impact of Health Reform Repeal on Florida

Why should Floridians care if members of its House of Representatives delegation vote to repeal all the provisions of health reform this week?

Because even though the Senate and the President have said they will stop the measure dead in its tracks, a vote to repeal is a vote against the interests of Floridians.

If every provision of health reform were to be repealed, here are just some of the people of Florida who would be affected:

• 86,300 young adults who would lose insurance coverage through their parents’ health insurance plans;
• 182,672 Medicare recipients in the donut hole who would be charged at least $250 more for their prescription drugs in 2011 than they were in 2010;
• Early retirees of 190 Florida employers – including the University of Miami, Stetson University, Eckerd College, the PGA Tour, Inc., The Wackenhut Corporation, Tampa General Hospital, the Archdiocese of Miami, the Escambia County Sheriff’s Office, the Florida Firefighters Insurance Trust Fund, Duvall County Public Schools, the Cities of Orlando, Miami, Jacksonville, St. Petersburg, and Fort Lauderdale, and the town of Palm Beach – who have already applied to keep their retirees on their health insurance plans (full disclosure: I also get this benefit as an early retiree of the State of Connecticut);   
• 3.2 million Florida Medicare recipients, who would have to pay out-of-pocket for an annual check-up, mammograms, and colonoscopies;
• More than 8.7 million residents with private health insurance coverage who would lose consumer protections like the ban on insurers cancelling coverage because they become sick, and the ban on insurers using pre-existing conditions as an excuse not to insure people in the first place;
• Up to 290,000 small businesses in Florida now eligible for tax credits to cover the cost of health insurance for their employees.

People and businesses in every state would experience similar impacts if the reform law were repealed.



Members of the House who cast a vote for repeal are casting a vote against these constituents.  Is casting a vote against tax credits for small businesses, health and prescription coverage for Medicare recipients, and aid for employers and their early retirees really working on behalf of constituents? If not, then whose interests are they really serving?



What To Do About Health Reform?
source: AP-GfK Poll, January, 2011



According to a new AP-GfK poll, the public emphatically does not want Congress to repeal the reform law.  We’re still evenly divided about it, with 40% saying we support it and 41% saying we oppose it.  But when we’re asked what we want to do about it, only 26% want to repeal it completely and only 10% more want it to do less.  Four times as many – 43% -- want it to do more.

In the same poll, by the way, 59% opposed the mandate that individuals buy policies if they can afford them, but 59% supported the mandate that employers offer insurance to their employees.  This perhaps proves once and for all that as a nation we love mandates, provided they’re someone else's mandates!

The bottom line is that we want more health insurance coverage, not less, and we don’t want to lose the benefits we have. 

Does this matter to our elected officials?  If they’re representing our interests, it should.  But as Jim Saunders reported in Health News Florida last week, Florida Governor Rick Scott and 31 other Governors hold a different view.  Fearing they’re not up to the job of balancing their own state budgets without help from the federal government, they want permission to ignore Medicaid “maintenance of effort” provisions in the law.  These are the provisions that assure that states will do no harm to current Medicaid recipients, including seniors and children, over the next few years.

Scott wrote that “Florida should get to determine what program is the right fit for our state in terms of a Medicaid program,” even though he’s asking the Federal government to continue to pay more than half the cost.

What does this really mean?  Governor Scott and others want the Federal money they get for Medicaid, but they also want the power to dump as many mandated benefits from the program as they can, no matter how much harm this may do. 

Is this really the direction they think they were given by voters in 2010?

The Brick Walls in the Battle Against Health Reform

States battling to repeal new health reform mandates have settled on two issues that may well turn out to be political brick walls. 

One issue is the requirement beginning in 2014 that individuals purchase insurance or pay an income tax surcharge, the so-called “individual mandate.”  The other is the federal expansion of the Medicaid program. 

The battle is being joined in the courts, the Congress, and state legislatures.

Most of the action so far has been in the courts. 

Florida has filed a suit challenging both the individual mandate and Medicaid expansion.  CNN calls it the “highest profile” lawsuit of many, and 19 other states have joined it.

Florida argues that the individual mandate is unconstitutional, contending that it’s unconstitutional for the federal government to require individuals to purchase health insurance by taxing them if they don’t.  As of last week, federal judges in both Michigan and Virginia have ruled against this position in other cases, but these decisions will be appealed. 

Florida’s argument against expanding the Medicaid program is more about public policy than the constitution. The Medicaid expansion will add 17 million uninsured people nationwide to Medicaid beginning in 2014.  This will cost a lot of money, and that’s the basis of the objection. 

However, for the first few years the federal government will pick up the entire cost of the expansion.  This means that states and localities initially will actually save millions of dollars they’ve been using to pay for care for the uninsured.

Also, the federal government doesn’t require states to participate in the Medicaid program.  Medicaid is not administered as one big federal program, but as fifty different state programs.

Why don’t states simply opt out?  When Governor Rick Perry of Texas floated the idea earlier this year, his own Health Commissioner quickly shot it down.  It’s because the Medicaid program draws down billions of federal dollars.  These pay not only for health care for poor people, but also for nursing home and home health care for seniors and intermediate care for people with disabilities.

A state opting out of Medicaid would be between a rock and a hard place.  It would bankrupt and alienate seniors and people with disabilities, while killing off some hospitals, nursing homes, and home health agencies that rely on these payments.  Or it could pay the whole bill itself, and its political leaders would have to preside over the biggest tax increase in state history.

Still, today’s court cases are only the opening volleys in this battle.  Even though they raise issues that seem today to create losing scenarios for the states, at least one case – perhaps Florida’s – will eventually reach the Supreme Court.  Health reforms will have been in place for years by then, and no one can say what the Court will focus on, what it will decide, or what the political landscape will be.

How will the other two battlefronts play out for states this coming year?  They’ll be noisy at times, but little ground will be gained or lost.

First, some members of Congress will try to choke off some funding to slow down reform implementation while introducing bills aimed at paving the way for more state challenges to reform.

Senator Roger Wicker (R-Mississippi) is introducing one of these this week.  They’ll argue “states’ rights,” noting that states – not the federal government – should determine how best to protect the health and well-being of their citizens.  None of these measures will pass, but they will give some cover to politicians trying to appease angry voters.

Second, state legislators will introduce and pass legislation that will be carefully crafted not to do too much too soon. 

Florida’s legislature is already working on its plan.  As Jim Saunders reported in Health News Florida on November 23^rd, Florida legislators are reviving a proposed constitutional amendment giving Florida residents the right to opt out of purchasing health insurance.  Voters may eventually get the chance to air their frustration by voting for the amendment, but even if it passes, it won’t affect anyone until 2014. 

By then, many of the crusading legislators will be out of office, and the Courts will all have ruled.  If they find the individual mandate constitutional, will anyone refusing to buy insurance want be the first one who refuses to pay the federal income tax surcharge?   That fight will be a lonely battle against the IRS, and not one the individual is likely to win.

The Battle Over the Biggest Consumer Protection in Health Reform

Health insurance reform is being implemented now, and it's no surprise that there’s a big battle going on pitting consumers against insurers.  The surprise is that the state regulators charged with protecting consumers are siding with insurers on some key issues.

The Biggest Consumer Protection in Health Reform

If you ask 100 people what the biggest consumer protection in the health reform law is, I would guess that fewer than 10 of them would tell you it’s the loss ratio mandate.

The what, you say?   We know about lifetime caps and pre-existing conditions and minimum benefit packages.  Few of us know about “loss ratios.” As we’ll see, consumers have a lot at stake in the loss ratio battle, including – for some – hundreds of dollars of premium costs per month. 

What’s a loss ratio?

What’s a loss ratio, and why should you care?  Simply put, a loss ratio is the percentage of dollars taken in through premiums paid back out in benefits.  For example, if a plan pays out $75 in benefits for every hundred dollars in premiums, then the plan’s loss ratio is 75.

The reason we should care is because when loss ratios are higher, consumers receive more benefits.  Medicare’s loss ratio has been calculated to be as high as 97.  Paying out up to $97 in benefits for every hundred dollars in premiums is the gold standard for consumers. 

Private insurers can’t touch Medicare when it comes to expenses.  They have higher administrative costs and also need to make a profit.  To make sure they pay out enough, public officials establish a minimum loss ratio through regulation.  Insurers can only sell policies that meet this minimum standard.      

This is enough about loss ratios.  To prevent our eyes from glazing over, from now on I'll just call them “the biggest consumer protection in health reform.”  

 What Congress Decided about the Biggest Consumer Protection in Health Reform

 The 2010 Federal law created a national standard for the biggest consumer protection in health reform.  Advocates initially asked that the standard be set at 90, but Congress considered this too high, and ultimately agreed to 80 for individual plans and 85 for large group plans.  This means that Congress decided that giving private insurance companies a 15-20% allowance for administrative expenses and profits was fair.

These new standards are set to take effect in a few weeks, on January 1, 2011.

A Battle Rejoined

While the battle over the biggest consumer protection in health reform got little attention in the spring, it erupted into a full scale war over the summer.

Insurers amassed their forces to get at least some relief from the biggest consumer protection in health reform and found two allies, health insurance agents and state insurance commissioners. 

Agents thought that they would be squeezed out of their commissions by insurers when the new law took effect.  They were right.  Insurance companies began to cut agent commissions almost immediately.  In response, insurance agents argued that they were primarily consumer agents, not insurance company representatives.  They asked HHS to count their 3-4% commissions as benefits to consumers instead of as administrative expenses, and asked state regulators to support them. 

The other group sometimes siding with the insurers was politically more powerful – the state insurance commissioners charged with implementing the new standards. 

As reported in Health News Florida in late September, Florida Insurance Commissioner Kevin McCarty, President-elect of the National Association of Insurance Commissioners (NAIC), took the lead in making the case against the biggest consumer protection in health reform, arguing that he was “concerned about the ability of our individual carriers to meet that standard in a seamless, non-disruptive manner.”  Florida’s current standard is only 65 for traditional insurance plans, and 70 for HMOs, far less than the new federal mandate.

This means that traditional insurers in Florida can keep up to 35% of premiums for administrative costs and profits.  If your monthly premium in Florida is $1000, then up to $350 of that can be kept by the insurance company.

That’s a lot of money for companies to give up.

What’s Going to Happen?

In mid-October, NAIC submitted its draft recommendations to HHS, which is now finalizing them.  NAIC elected not to support the agents’ position, leaving agents to fend for themselves.

But NAIC did ask HHS for a phase-in of the biggest consumer protection in health reform, staking out an anti-consumer position.

Why do this when your job is to protect consumers?  President-elect McCarty argues that some plans will otherwise go out of business, reducing consumer choice.  But isn’t that the idea?  If the plan’s expenses or profits are too high, then it’s not a good choice for consumers.  That plan should go out of business.  It’s really just that simple, if protecting the American public is the goal.