Health Care Reform News Around the Nation for the Week of Nov. 24
Earlier this month, Louisiana Gov. Bobby Jindal (R) and state Department of Health and Hospitals Secretary Alan Levine announced details of the Louisiana Health First initiative, a pilot program aimed at restructuring the state's Medicaid program by shifting thousands of low-income children and adults from the current fee-for-service model to private managed care networks, the Baton Rouge Advocate reports (Shuler, Baton Rouge Advocate, 11/15).
The proposed plan, outlined in a 65-page concept paper, is designed to cut costs and improve the health outcomes for Medicaid beneficiaries, but details of how it will be financed remain unclear, the New Orleans Times-Picayune reports.
The plan also must be approved by the state Legislature and federal government before it is implemented (Moller, New Orleans Times-Picayune, 11/15).
The concept paper outlines some "major reform initiatives" for which the state is seeking federal approval:
- Develop "coordinated care networks" in the Baton Rouge, Lake Charles, New Orleans and Shreveport regions that are similar to private managed care plans and that would provide beneficiaries with preventive health care and chronic disease management services. The networks would be expanded statewide within five years;
- Expand Medicaid to some parents and grandparents of children enrolled in the program. Eligibility for the benefit would require that household income be no more than 50% of the federal poverty level; and
- A demonstration project in Lake Charles that would extend Medicaid coverage to parents, caretaker relatives and childless adults with incomes up to 200% of the federal poverty level (Baton Rouge Advocate, 11/15). People with incomes between 200% and 350% of the poverty level would be able to buy into the program on a sliding scale.
Jindal said, "Our health care system today is not working to help the very people it's designed to serve," adding that "doing nothing is not an option." He said that Medicaid could become financially unsustainable, adding that the program is projected to account for at least 21% of the state's general fund budget by 2011.
Citing ongoing discussions with the Bush administration over the financial aspects and other details of the plan, Jindal said, "We're not going to agree to terms (with the federal government) that are not in the best interest of the state." The negotiations could extend into 2009, he said (New Orleans Times-Picayune, 11/15).
Last week, Michigan Attorney General Mike Cox (R) and consumer advocates asked the state Legislature to abandon plans to approve legislation in the upcoming lame-duck session that would allow Blue Cross Blue Shield of Michigan to restructure, the Detroit Free Press reports.
BCBS is the state's insurer of last resort (Bell, Detroit Free Press, 11/18).
Michigan lawmakers are working to consolidate two versions of the legislation, one approved last year by the state House and another approved in the spring by the state Senate (Rogers, Detroit News, 11/19).
Blue Cross officials say the legislation is needed because the company is experiencing unsustainable losses in the individual health insurance market. The company says that under current regulations, it must pay for hundreds of millions of dollars annually in uncompensated care.
Blue Cross also seeks to increase its non-health insurance business through its Accident Fund subsidiary (Detroit Free Press, 11/18).
Along with representatives from AARP and the Consumers Union, Cox said that the legislation would increase costs for people who purchase individual health policies and allow the insurer to deny coverage for people with pre-existing health conditions (Detroit News, 11/19).
In addition, Cox said the bill would allow the insurer to increase premium rates for individual policies without oversight from the attorney general's office or the state insurance commissioner (Detroit Free Press, 11/19).
Blue Cross spokesperson Andrew Hetzel said Cox's understanding of the legislation and a draft compromise bill that is being circulated among lawmakers is dated, the Detroit News reports. He said that the compromise package would continue state oversight of premium rate changes, as well as add consumer protections and require health insurers that reject people or deny coverage to pay into a fund that would be used to help keep insurance affordable (Detroit News, 11/19).
Earlier this month, the state budget office warned state agencies to prepare for an additional 20% budget reduction in the upcoming two-year budget cycle, the Nevada Appeal reports.
According to the memo from state Director of Administration Andrew Clinger, the plans are to give the administration an idea of the impact of budget reductions.
The warning follows an announcement by the office that state agencies should prepare plans to reduce their budgets for the current fiscal year by up to 11% for a total of $358 million.
The agency budgets already have been reduced by 14%, and if the additional cuts are ordered, the budget will be two-thirds the amount originally approved by the state Legislature and governor for the current fiscal year. In all, the reductions, if ordered, would reduce the state Health and Human Services Department budget by $705.8 million (Dornan, Nevada Appeal, 11/16).
Last week, Gov. David Paterson (D) and state lawmakers were unable to reach an agreement to cut $2 billion in spending during an emergency session of the state Legislature, the Rochester Democrat and Chronicle reports.
They agreed to wait until Paterson releases his FY 2010 budget on Dec. 16 before considering any cuts during the current fiscal year.
Lawmakers still have the option of coming back after that time and before 2009 to make cuts.
However, Paterson suggested cuts might not occur until the new session begins, when Democrats are expected to take control of the state Senate.
According to Paterson, at the beginning of 2009, the state will be faced with an estimated $15 billion budget gap and a $47 billion budget gap over the next four years. Paterson has proposed cutting $527 million from health care programs (Spector, Rochester Democrat and Chronicle, 11/18).
The Oregon Health Fund Board on Monday unanimously adopted recommendations to overhaul the state's health care system and provide coverage to all state residents by 2019, the Oregonian reports.
The plan recommends taxing hospitals and health insurers and using the money to extend coverage to the 100,000 uninsured children and about 100,000 low-income uninsured adults by 2013 (Colburn, Oregonian, 11/18).
The taxes would generate an estimated $700 million over the next two years, which would be used to draw down more than $1 billion in federal matching funds.
The plan also would regulate hospital prices and insurance company administrative costs and would increase taxes on alcohol and cigarettes to fund mental health services and public education programs about chronic disease prevention.
State and local governments and eventually private insurers would consolidate to create purchasing to negotiate better prices for prescription drugs, insurance and other services.
The state also would help doctors and hospitals convert paper records to electronic systems to improve efficiency and reduce costs. Eventually, all state residents would be required to have health insurance and insurers would be required to cover individuals regardless of pre-existing health conditions.
The plan calls for the creation of a nine-member Oregon Health Authority Board, appointed by the governor, that would encourage health care professionals to establish "integrated health homes" and develop new pay structures and reward programs. The state also would establish measures and standards for health care and provide consumers with information about the cost and quality of care.
Barney Speight, executive director of the Oregon Health Fund Board, said most of the recommendations by the board would cost about $5 million to $7 million and generate up to $10 billion in savings over the next 10 years.
Last week, Pennsylvania Gov. Ed Rendell (D) announced that he has extended through June 30, 2009, an executive order that allows the Pennsylvania Health Care Cost Containment Council to continue operating, the Philadelphia Inquirer reports.
PHC4 collects records on millions of hospital visits and outpatient procedures to help rein in health care spending.
Without the extension, the program would have been shut down at the end of this month. The state Legislature will have the opportunity to renew PHC4 when it convenes in January (Goldstein/Worden, Philadelphia Inquirer, 11/20).
Rendell noted that the agency should reduce its $5.3 million budget by 4.25% -- the same amount other agencies must cut because of a state budget shortfall (Pittsburgh Post-Gazette, 11/20).
In related news, Rendell reiterated his pledge not to approve an extension of a program that provides medical malpractice insurance assistance for doctors until his health insurance proposal is approved.
On the last day of its 2008 legislative session last week, the state House rejected a measure to extend the abatement program (Philadelphia Inquirer, 11/20).
State lawmakers last week said that the newly projected $5 billion budget gap in the next two-year budget will have to force cuts and possible measures to increase revenue, the Seattle Times reports.
The governor's budget office informed state agencies that they should prepare for deep budget cuts.
State Department of Social and Health Services spokesperson Thomas Shapley said that the agency has been anticipating such a possibility, adding that there are three areas where the agency could make cuts:
- Provider payments;
- Reducing benefits; and
- Limiting eligibility.