Around The Country
State-Based Healthcare Research
In the realm of health care, federal policy has heavily encroached on individual states’ ability to execute programs that work best for them. More than ever before, there is a need to recognize sound policy research conducted at the state level. State policymakers have at their finger-tips a vital network of state-based think tanks that actively research policy solutions which fit the unique needs and culture of each state. Additionally, serving as a prime example of the potency of robust federalism, research from state-based think tanks provide policy in the form of a microenvironment, allowing national policymakers to recognize quality research and apply it on a larger scale.
Below is an initial compendium of state-based research. This compendium will be updated as additional state-based healthcare research becomes available. These views do not necessarily reflect the views of the American Action Forum, but instead highlight thoughtful research conducted throughout the nation.
Advance Arkansas Institute
The governor of Arkansas has made proposals to change the state Medicaid system without effective coordination with the state legislature. Twila Brase notes several implications for the state’s healthcare system with unilateral changes made to Medicaid. The governor’s proposal would put decisions regarding “best practices”, “appropriate care”, and “health care quality” at the discretion of government officials. Governor Beebe’s proposal also threatens the privacy of Arkansas citizens by allowing health officials to access patient prescription records without a warrant.
The Citizen’s Budget shows that Medicaid in Colorado has many problems that, left untouched, will be disastrous for the state’s Medicaid program. Colorado has recently depended on Federal stimulus money to fund its Medicaid program. The Medicaid caseload in Colorado has expanded faster than not only the state’s general population, but also the state’s population in poverty- the very population Medicaid is supposed to target. Coupling the absence of extra federal funds with the present course of massive caseload increases, the state’s Department of Health Care Policy and Financing faces budget shortfalls of over $250 million.
Even though Medicaid spending has grown substantially across the nation- at a rate of 44 percent since 2000, it has grown at an even faster rate in Delaware (70 percent). Medicaid was originally designed to be a safety net for the severely disadvantaged and children, but the liberal entitlement eligibility requirements have allowed the program to expand at an unsustainable rate. Because Medicaid is typically managed using the federal poverty line as a guideline, it would make sense that Delaware’s program would rise and fall accordingly. However, the recession has not increased Delaware’s poverty rate by a substantial margin, yet Medicaid in the state skyrocketed. It is also expected to rise in the near future, due to the loss of federal stimulus funds, the inclusion of the PPACA’s Medicaid rule, and the rising age of Delaware’s population.
James Madison Institute
Dr. Michael Bond writes that the Medicaid program in Florida needs dramatic reform if it is to survive. Since 1990, Medicaid in Florida has more than doubled its share of the state budget (10 percent in 1990, 21 percent in 2007). Costs have gone up in the state of Florida, while new Medicaid patients are being turned away from primary care providers and care to those who do see a doctor is regarded as low quality.
Florida has instituted several reforms to combat the rampageous growth of Medicaid spending. They instituted “real managed competition” and Health Savings Accounts for enrollees. Reform has brought in new HMOs and PSNs to the pilot counties in which it was tested, thus improving competition. Enrollees, as a whole, have been satisfied with their ability to receive care from a doctor.
Finding a way to pay for the health benefits for public employees is a major issue in times of fiscal trouble. Throughout the country, states are scrambling to pay for government worker retirees. In FY 2009, 19 states do not have any money available to fund these benefits, and only seven have been able to fund 25 percent of their liability. Overall, only 5 percent of the expected liability has been set aside. Iowa being one of the 19 that has no money set aside, is also one of only six states that pays 100 percent of health care insurance costs for state employees and their families. Even if public employees were asked to pitch in to their healthcare fund, people in the private sector pay much more.
Kansas Policy Institute
Prior to the stimulus and PPACA, Kansas’ Medicaid program has been relatively stable. Of states with similar economic and demographic characteristics, Kansas’ expenditures are in the middle of the pack. Projections of Kansas’ Medicaid program with the PPACA provide a grim outlook for the state’s budget: between 2014-2023, Kansas will be forced to spend $4.7 billion more with ACA’s implementation than without it. This will be required for the estimated 254,000 additional enrollees into the program by 2023. Funding for education is likely to be crowded out by Medicaid’s expansion. In response to this outlook, Kansas policymakers have petitioned HHS for an exemption from the maintenance-of-effort requirements and to receive Medicaid as a block grant. Regardless of PPACA’s fate, Kansas needs to equip its Medicaid program with more autonomy if it is to survive.
Bluegrass Institute for Public Policy Solution
Medicaid in the state of Kentucky has expanded tremendously over the last decade. Federal and state spending on Medicaid in the state rose by 54 percent, from $3.3 billion to $5.4 billion. The number of enrollees has increased by 39 percent in the same time period, from 664,000 to 924,000. All the while, the GDP in Kentucky has grown at a rate of only 8 percent. This growth has been problematic due to the lack of improvement in access to quality care, as well as perverse incentives that detract from good decision-making by providers and consumers. The Bluegrass Institute offers several policy solutions, including: enhancing competition in the healthcare and health insurance markets, transitioning Medicaid into a voucher program that improves patient choice, and converting federal funding of Medicaid into block grants.
Health insurance premiums have risen by 5 percent large employers and 15 percent for small employers over the last five years. In response, large employers in Massachusetts have been able to implement innovate insurance plan designs. Medium and small employers still struggle to find innovative and cost-effective ways to insure their employees. In order to both control costs and engage their employees in health care decision-making, smaller employers might want to consider plans that: move toward a defined contribution, add a deductible, promote high-value and cost-effect providers, and sponsor a wellness program for employees and their families. All four strategies have advantages and disadvantages, but it is stressed that employers need flexibility when deciding the best health insurance option for their employees.
High-quality medical care for children from hospitals such as Boston’s Children’s Hospital is threatened by the implementation of Obamacare’s Accountable Care Organizations. The original intention of ACOs is that patient care is better shared across doctor and hospital networks, but the original plan accounts specifically for Medicare patients. ACOs- which may ultimately re-define health care delivery- do not account for publically covered pediatric patients. Hospitals receive as little as 60 percent of what private insurers pay. Policy prescriptions include to exhaustingly regulate the market or to align incentives for health care consumers and providers to integrate care and engagement. Coordination should be a priority of health care reform, rather than a carte blanche push of all consumers into an ACO.
Dr. Clare Gray for the Platte Institute for Economic Research
State and the federal government are racked with debt and Medicaid is partially to blame. Passing the buck to taxpayers of other states has allowed Medicaid to grow to an uncontrollable size- roughly 8 percent of the federal budget and 22 percent of Nebraska’s budget. To put the rate of Nebraska’s Medicaid expansion into perspective (up 224% since 1999), it has grown twice as fast as the state’s education funding and 20 times faster than transportation spending. The budgetary impact of Medicaid prevents that money from going to other programs in Nebraska. The PPACA will exacerbate the growth of Medicaid in Nebraska by forcing the state to take on 90,000 more beneficiaries at a cost of $150 million annually to the state. The best solutions for Nebraska include the repeal of Obamacare, receiving Medicaid as a block grant, and allowing premium-assistance for private insurance.
Rio Grande Foundation
As Paul Gessing of the Rio Grande Foundation points out, Medicaid has a firm grip on New Mexico- accounting for roughly 22 percent of the state’s budget. The cost of the program has grown steadily over the last decade in the state; further limiting New Mexico’s ability to invest in other programs. The Medicaid program in New Mexico has not shown to be economically beneficial to the state. Instead, it crowds out private insurance and dissuades capable seniors from buying their own insurance for long-term care.
Dr. Clare Gray of Physicians for Reform for the John Locke Foundation
Currently, the state of North Carolina pays 36 percent (or $1 for every $2.75 the federal government spends) on its Medicaid program. It has quadrupled in price over the last two decades- a spending rate that outpaces state education spending 20 times. Dr. Gray warns that the financial strain that Medicaid causes to North Carolina’s budget will grow in two ways: (1)federal stimulus money has ceased in July, 2011, and (2) that the PPACA’s maintenance-of-effort provision prevents North Carolina from curtailing enrollment, thus savings come only from cutting provider payments or benefits. The PPACA will increase North Carolina’s Medicaid enrollment 630,000 people at a seven-year cost of $1.1 billion.
Buckeye Institute for Public Policy Solutions
Medicaid is a problematic program for the state of Ohio. Unsustainable increases in spending, low payment rates to providers, and low quality of care for beneficiaries represent the status quo for Ohio’s Medicaid program. The cost of Medicaid has increased 54 percent over the last two decades in Ohio and has a full price-tag of $14 billion. This results in a $2,000 annual Medicaid tab for a typical household of four in Ohio.
Washington Policy Center
The state of Washington is faced with either option out of Medicaid or eliminated state only healthcare programs due to a massive budget shortfall. Without reform, state healthcare spending may be reduced to the administration of Medicaid instead of priorities. To further stress Washington’s budget, the PPACA will require Washington citizens to pay $1.45 billion to $2.42 billion in new Medicaid spending over the course of a decade. Restructuring Medicaid as an indexed block grant program would allow state officials with flexibility over Medicaid policy. Additionally, a voucher system should be implemented to give Medicaid enrollees purchasing power.
MacIver Institute for Public Policy
There is a debate in Wisconsin regarding the allocation of Medicaid funds. The MacIver Institute reports that the governor’s office attests that the Medicaid budget increased by $1.2 billion, whereas opponents argue that Governor Walker cut Medicaid funding by $554 million. The Legislative Fiscal Bureau calculated that for the 2011-2013 state budget, Wisconsin increased funding for its Medicaid program $1.2 billion at the base, and spent $428 million more than the agency requested. To prevent budget overruns, Wisconsin plans to implement changes to their Medicaid program by preventing those who are able to obtain health insurance in another manner (employer or parents) from enrolling into the program.
After joining the lawsuit against the PPACA’s mandate earlier this year, Wisconsin attorney general JB Van Hollen anticipates that the United States Supreme Court will strike down that part of the legislation. Van Hollen says that the mandate is not just a requirement to purchase something, but that “it’s purchasing something again and again…from birth until death.” He believes that the Supreme Court will strike down the mandate based on two previous decisions.
Wyoming Liberty Group
Reforming Medicaid is a critical component of Wyoming’s Roadmap to improve healthcare. The Roadmap will decrease the tax burden and entitlement spending, while stimulating the private health insurance market. Medicaid reform would come in two steps: enroll Medicaid beneficiaries in private insurance plans with the use of vouchers, and redesign care for the most vulnerable citizens with block grants.