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More on Defining Down Health Care

The Washington Post details some of the changes states are making in the Medicaid program, party based on federal waivers and partly due to a new federal law passed last December that allows states to offer unequal benefits to different Medicaid recipients.

As we detailed a few weeks ago, many changes are cutting benefits for recipients but what ties most of them together is handing more control over to private insurance companies, a campaign that the Post notes is backed by corporate-funded think tanks:

The focus on private-sector insurance and self-reliance is favored by conservative groups, such as the Heritage Foundation and the Center for Health Transformation, which was founded three years ago by former House speaker Newt Gingrich (R-Ga.).

While such programs are great for insurance company profits, health care advocates like Families USA have detailed the downside for Medicaid recipients:

  • Families often don't receive the services that would be covered if directly enrolled in Medicaid of SCHIP programs (the program for expanding coverage for children).
  • Families are often billed for out-of-pocket costs that Medicaid or SCHIP normally cover.
  • Families are denied access to traditional consumer protections under Medicaid, instead being subject to often-abusive grievance procedures established by private insurers.

Families USA has a few guidelines for advocates in states considering mixing private insurers into the Medicaid system:

  • Make Participation Optional: Beneficiaries should always have the option to choose regular Medicaid or SCHIP programs.
  • Extend Full Benefits to Those in Private Plans: Ensure that expenses not paid for by private insurers that would normally be paid by Medicaid or SCHIP are covered for those using privatized plans.
  • Establish Minimum Benefit Standards: Only subsidize plans that provide a broad range of coverage like traditional Medicaid and SCHIP.
  • Extend Medicaid/SCHIP Grievance and Appeals Process: Families covered by Medicaid and SCHIP should have access to the same grievance systems, whether they receive services through traditional programs or new privatized plans.

An Additional Burden for States: To make matters worse for states, the Bush administration is proposing a new federal regulation would further restrict their ability to tax health care providers to fund Medicaid programs, a funding source for two thirds of the states. Right now, private health providers can be taxed up to 6% of their gross revenues as part of a state's share of the costs of Medicaid. The new proposed rule would cut that in half, restricting the state share of revenue to no more than a 3% tax on providers-- a plan that would reduce federal Medicaid funds for states by $5.5 billion over the next decade.

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