State seeks greater control over Medicaid

Goal is to cut back some services and ask the poor to help pay

Friday, November 30, 2001


OLYMPIA -- The state wants the right to ration health care -- and make some poor patients pitch in with costs -- under a groundbreaking proposal for Medicaid reform.

Long a pioneer in expanding health care access to the poor, Washington now wants to set a trend in the other direction. Gov. Gary Locke is asking the Bush administration to allow unprecedented local control over the federally subsidized Medicaid program.

If it's granted, the state could charge co-payments and premiums on some patients, and impose waiting lists and scale back benefits for others.

The goal, officials say, is to save enough money to avoid cutting whole programs. As it is, they say, Medicaid sucks up 40 percent of the state Department of Social and Health Services budget, which also includes welfare, care of the elderly and disabled, and protection of abused children.

But critics worry that some of the poorest in the state could lose access to dental and vision care, prescription drugs, medical equipment and childhood health and development exams -- or slip through the Medicaid safety net altogether.

Judy Kaufmann plans to protest the proposal at a rally here today.

She raises a 16-year-old daughter in Kent on $700 in Social Security and $10 in food stamps each month, she said. The 50-year-old worries that any co-pays or premiums would make it impossible for her to get her medications or replace her eyeglasses or wheelchair.

"There's no way I could do without a wheelchair," said Kaufmann, whose brain was damaged in a motorcycle accident when she was 13.

The proposal would allow Washington to charge up to 5 percent of some patients' income in co-payments and premiums, significantly more than currently allowed.

Medicaid funding is now governed by longstanding federal restrictions designed to ensure minimum coverage for the neediest residents. If the proposal is approved, the health of the state budget -- not federal rules -- would help determine how the Legislature and governor fund Medicaid.

"Since we pay half of it, I think we should" have more say, said Dennis Braddock, secretary of DSHS and a former lawmaker who was heavily involved in expanding Medicaid coverage.

"I, in fact, am willing to cut people off Medicaid to put money where I believe it is more appropriately needed -- or more severely needed -- in DSHS, such as (services for the) developmentally disabled and juveniles with mental health needs," he said. "I think those are more serious and critical needs than health insurance coverage."

States' rights

Washington's proposal -- called a waiver application -- is unique because it does not promise to expand Medicaid coverage. Nor does it offer specifics, such as how much any co-payment might be. Instead, it asks for broad flexibility and is geared at cost savings.

"There's a good reason why we are the first state: because we are the one that outran our financial capability the most, the fastest," said Braddock. "We keep digging this hole of unsustainable commitments."

He added that some states use waivers to expand into coverage that Washington already provides, such as through state's Basic Health Plan providing insurance for the working poor.

Washington's request has gained national attention at a time when states are demanding reform to slow the Medicaid program's skyrocketing costs.

"The states look at this as kind of a states' rights issue," said Ree Sailors, health policy adviser to Locke.

The federal government mandates Medicaid coverage of some client groups, including the very poorest residents, and of some health services, including hospital care, doctor visits and in-home care. Washington's waiver proposal would affect so-called "non-mandatory" coverage.

Most of the mandatory clients are below the federal poverty level -- $8,590 a year for one person and $17,650 for a family of four. Such mandatory clients make up about three-fourths of the state's 800,000 Medicaid recipients, according to the state.

But Washington also offers Medicaid to some people with up to twice that income, or more. Those clients, considered optional by the federal government, include some children, pregnant women in working families, disabled people with jobs and some nursing home patients.

Washington also provides optional programs such as vision and dental care, medications and medical equipment such as wheelchairs, hearing aids and prosthetics. And the state also extends services that are mandatory only for the poorest, such as health screening for kids, to some above the poverty level.

The federal government won't help pay for those optional benefits unless the state sharply limits any co-payments and makes the services available to a broad range of Medicaid clients.

Under the waiver, the state could restrict or charge premiums or co-payments for optional coverage and still retain federal subsidies. It could require patients below the poverty level to share the cost of non-preventative optional services. Folks above the poverty level could be required to pay both monthly premiums and co-pays.

Details would be up to the Legislature and the governor.

Thus, officials said there is no way to predict how much the proposal might save.

'Fooling ourselves'

The proposal's vagueness worries consumer advocates and some lawmakers, who fear it could grease political wheels for quiet and painful cuts.

"Flexibility is a nice euphemism and it scares me," said Democratic Seattle Rep. Shay Schual-Berke, vice chairwoman of the state House Health Care Committee.

"It makes sense ... to let us use a scalpel approach rather than a sledgehammer approach," Schual-Berke said.

Yet, she worries that lawmakers could make harmful changes in closed-door budget-negotiating meetings. "It could happen at the 11th hour at the end of the legislative session in a back room."

And Rep. Tom Campbell, top Republican on the health committee, said, "We're fooling ourselves if we think were going to save money. They're not going to get the routine care that they need and they're going to end up in the hospital room."

Claudia Sanders, head of policy development for the Washington State Hospital Association, said, "We don't see this as part of a long-term plan on how to address budget problems in a forward-thinking way."

As it is, she added, "Medicaid is paying hospitals about 80 percent of their costs (for treatment.)"

Bonnie Chambers, a 30-year-old Lynnwood mother of four, said Medicaid's poor reputation for reimbursing health care providers makes it hard enough to get treatment. "We've been turned away from a lot of doctors," she said.

Chambers can't work because she was injured at her job caring for Alzheimer's patients last summer. Now the Chambers family of six is scraping by on her husband's $22,880 annual pay as a cabinet drafter, she said.

"We have no extra money to pay co-pays or to pay premiums," said Chambers, adding she is better off than many who stand to lose coverage. "We're talking about people that have to decide whether or not to pay their PUD (energy) bill or buy food."


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