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Waiting For The Children’s Health Insurance Program

By Christine Vestal, Stateline.org (TNS)

WASHINGTON — The federal-state Children’s Health Insurance Program (CHIP) will run out of money on Sept. 30. Until recently, Congress showed little interest in paying for it. But last week, the House agreed on a bill that would continue the $13 billion program in its current form through 2017.

In late February, Republicans in both houses issued a “discussion draft” outlining modifications they claimed would make the program more flexible for states, even though most governors say they don’t want any changes to what they consider a near-perfect health care program. The GOP proposal would have narrowed coverage to the lowest-income families currently served by CHIP and allowed states to cut back enrollment.

If CHIP is not renewed, advocates say more than 2 million of the 8 million kids currently covered by the program could wind up uninsured.

Hundreds of advocacy groups and Democrats in Congress spoke out against the changes. For now, the GOP proposal has been taken off the table under a compromise deal agreed to by House Republicans. The issue now is whether to extend the program for two years or four years. The Obama administration, Senate Democrats, advocates for children and nearly all governors are pushing for at least a four-year continuation, through 2019.

But an independent advisory board to Congress, known as the Medicaid and CHIP Payment and Access Commission, and some Republicans want to limit the renewal period.

CHIP was designed to cover kids in families with incomes too high to qualify for Medicaid but too low to afford private insurance. The Affordable Care Act extended CHIP through 2019 and increased its federal funding share by 23 percent.

But the health law also created health insurance exchange subsidies aimed at helping families in the same income brackets as those served by CHIP. To avoid redundancy, some argue CHIP should eventually be discontinued in favor of exchange policies or employer-sponsored insurance. Dissolving CHIP would also simplify things for families who may have other members covered by Medicaid or private insurance, they argue.

“There is a legitimate policy concern that, if not properly focused, CHIP coverage may unduly crowd out private health coverage,” U.S. Rep. Fred Upton, the Michigan Republican who chairs the House Energy and Commerce Committee, said during a December hearing. Upton’s concern is that families who qualify for exchange subsidies or have employer-sponsored coverage would instead opt for CHIP at greater expense to the federal government.

Proponents of maintaining CHIP argue that the subsidized policies offered on exchanges today are inferior to CHIP coverage. Substantially higher out-of-pocket expenses make the policies unaffordable for many CHIP families, and the benefits packages and provider networks are designed for adults, not children.

According to the American Academy of Pediatrics, CHIP plans provide access to pediatric primary care physicians, pediatric subspecialists and pediatric surgical specialists who are experts at addressing children’s needs.

In addition, an apparent glitch in the health law bars families who are unable to afford employer-sponsored insurance from receiving premium tax subsidies. The ACA requires employers to provide “affordable” coverage only for workers as individuals, not for their families. If an affordable policy is offered, the worker and his family do not qualify for premium tax subsidies.

For individuals, under the ACA the cost of a policy may not exceed 9.5 percent of a worker’s income. But there is no limit to what employees can be charged for family coverage, which typically costs nearly three times as much as individual coverage. That leaves low-income families nowhere to go except Medicaid or CHIP.

Since its enactment by bipartisan vote in 1997, CHIP has been instrumental in cutting the nation’s uninsured rate for children, from 15 percent in 1997 to 9 percent in 2012. Administered by states and funded primarily by the federal government, CHIP enjoys wide support from Democrats and Republicans at the state and federal level. Republican Senator Orrin Hatch of Utah, a co-sponsor of the GOP discussion draft, called CHIP a “marvelous” program that has “worked very, very well,” in recent comments to the U.S. Chamber of Commerce.

Based on governors’ responses to a recent congressional inquiry, there is very little states want to change about CHIP. Of the 39 governors who responded, only two — Republicans Bill Haslam of Tennessee and Nathan Deal of Georgia — wanted a renewal to be limited to two years. Democratic Governor Dannel Malloy of Connecticut and Republican Governor Dennis Daugaard of South Dakota wanted an indefinite renewal period. Governor Sam Brownback of Kansas and Governor Rick Snyder of Michigan, both Republicans, wanted a five-year extension. Democratic Governor Pat Quinn of Illinois, who has since been replaced by Republican Bruce Rauner, also asked for a five-year renewal.

The National Governors Association, which represents all governors, urged Congress to renew funding for CHIP as soon as possible so they could include it in their budgets for fiscal year 2016, which starts July 1 for most states.

Why extend CHIP for only two years, when previous renewal periods have been four years? Supporters of a shorter renewal period argue that exchange insurance coverage under the Affordable Care Act is likely to improve over the next two years and Congress will have time to fix the so-called “family glitch” that prevents low-income working families from getting premium tax subsidies.

But Bruce Lesley, president of First Focus, a children’s advocacy group, said “there is no evidence today that Congress would make the needed changes.”

“We’ve been asking for (CHIP) renewal for more than a year. If we kick it down the road two years, then in nine months we’ll be back here having this discussion all over again,” Lesley said.

If the two-year extension bill passes the House, the action will move to the Senate where every Democrat supports a four-year extension. The plan is to attach a CHIP reauthorization bill to a larger health care bill, a repeal of the so-called Sustainable Growth Rate method of reimbursing Medicare providers. That bill is expected to be introduced this week and a vote is expected before April 1.

Photo: The U.S. Capitol under construction in October, 2014 (Mike Maguire via Flickr)

Q&A: Could States With Federal Exchanges Easily Launch Their Own?

By Christine Vestal, Stateline.org (TNS)

WASHINGTON — The Obama administration says it does not have a contingency plan if the U.S. Supreme Court rules against federal tax subsidies in King v. Burwell. But lawmakers in at least nine states are proposing backstop measures that legal experts say could work.

At issue is whether residents of the 34 states where the federal government runs the health insurance exchange under the Affordable Care Act can receive premium tax subsidies. Affordable Care Act opponents argue that a strict interpretation of the language in the statute indicates people can only receive federal subsidies if they purchase policies on an “exchange established by the state.”

If the high court sides with the plaintiffs, what’s to stop states from quickly establishing a state exchange? Florida, Indiana, Maine, Missouri, New Hampshire, New Jersey, Ohio, Pennsylvania and Texas have bills that would jumpstart the process.

Q: How easy would it be for a state to switch its exchange from federal to state?

A: It wouldn’t be easy. The first step would be enactment of a law authorizing a state agency, nonprofit or public-private entity to run the exchange. Next, a state would have to build or acquire a website to enroll residents, take over contracts with insurance carriers, develop a consumer assistance program and create a bureaucracy to operate the exchange.

Q: Could the change be accomplished quickly?

A: Judging by the time it took the 16 states that have already established their own exchanges, the answer is “no.” But with strong political support, a state could expedite the process in an attempt to prevent its residents from losing federal subsidies and potentially becoming uninsured. Still, it would be difficult for a state to complete the transition before the high court’s decision — which is expected in late June — would likely take effect. Some argue the court should provide a grace period lasting through 2016 to allow states that want to create their own exchanges to do so.

Q: What’s at stake?

A: An estimated 8.2 million people would likely lose insurance coverage if the high court decides in favor of the plaintiffs. Without premium tax subsidies, the monthly payments consumers would have to shell out for policies sold on the exchange would rise an average of 255 percent in federal exchange states, making them unaffordable for the vast majority of people enrolled. In addition, premiums for policies sold off the exchange would spike an estimated 47 percent because the departure of so many relatively young and healthy exchange subscribers would increase the risk of the state’s overall insurance pool, according to a new study by the RAND Corp.

The 34 states with federal or partnership exchanges would lose $29 billion in federal subsidies in 2016, or $340 billion over ten years. In the first year, Florida and Texas, two of the states with bills that would authorize a state exchange, would lose $3.9 billion and $4.4 billion, respectively, according to an analysis by the Urban Institute.

Q: Can states take over their state-specific sections of HealthCare.gov?

A: Yes. Three states — Nevada, New Mexico and Oregon — already have done so, and all three are considered state exchanges by the administration and the plaintiffs in the case. Idaho temporarily used the federal portal until it completed construction of its own website last year. If the high court rules against federal exchange subsidies, the administration is expected to make it as easy as possible for other states to do the same thing.

Q: How would a website transfer work?

A: In Oregon, where the exchange website built by the state failed to perform, the exchange authority, Cover Oregon, got approval to use the federal website — HealthCare.gov — to enroll residents in exchange policies. An updated document known as an exchange blueprint served as Oregon’s contract with the federal government to take over the HealthCare.gov website, according to a spokesperson for Cover Oregon.

Similarly, Nevada abandoned its troubled website and co-opted the federal platform last year. New Mexico, which completed all the preliminary requirements for establishing its own exchange but ran out of time to build a website, is also using the federal website.

In all cases, the website and all of its transactions remained under federal control. State exchange authorities simply contracted with the federal government to provide enrollment services.

Separate health insurance websites and call centers were maintained by states to provide consumer information and assistance. All other functions — including oversight of insurance policies, annual audits, hiring and training of so-called “navigators” to assist consumers, and compliance with U.S. Department of Health and Human Services reporting requirements — were also performed by the state.

Q: How much would it cost states to take over their portion of HealthCare.gov?

A: It’s not known whether the federal government will charge states for use of HealthCare.gov. So far, Idaho, Nevada, New Mexico and Oregon have not been assessed a fee. But in the future, the federal government could charge a fee for website updates and improvements or simply lease the website to state-run exchanges.

Currently, the cost of maintaining and updating HealthCare.gov is funded in part through fees assessed on the insurance carriers that sell their policies on the website. In the three states using HealthCare.gov, and in all other state-based exchange states, those fees are assessed and paid to the state.

The U.S. Department of Health and Human Services granted states nearly $5 billion to build their own exchanges, but the deadline for receiving that money ran out last year. Federal grants are still available for consumer outreach.

Q: How likely is it that states will make the change?

A: Most states are not expected to make the change unless the court declares federal exchange subsidies illegal. If that happens, at least two governors have declared they will take immediate action to protect their residents from losing subsidies. Republican Governor John Kasich of Ohio and Democratic Governor Tom Wolf of Pennsylvania have said they are committed to such a contingency plan.

Photo: SEIU International via Flickr

More States Lean Toward Medicaid Expansion

By Christine Vestal, Stateline.org (TNS)

WASHINGTON — The federal government last week approved Indiana’s plan to expand Medicaid under the Affordable Care Act, increasing the number of expansion states to 28, and the District of Columbia. Indiana’s plan could add an estimated 350,000 low-income adults to the nearly 5 million expected to enroll in the 27 states that expanded Medicaid last year.

In accepting Indiana’s plan, the Obama administration demonstrated its determination to increase the number of expansion states, even if it means waiving longtime Medicaid rules. For example, under Indiana’s plan, people with incomes above the federal poverty level ($11,670 for an individual) must contribute to a health savings account or be locked out of coverage for six months.

The penalty for not paying into a health savings account, which has never before been approved by the U.S. Department of Health and Human Services, reflects an important Republican health care tenet: People who receive Medicaid benefits should take personal responsibility for their care. Republican Gov. Mike Pence called his plan “the first-ever consumer-driven health care plan for a low-income population.”

Judith Solomon, health policy director at the Center on Budget and Policy Priorities, which advocates for low-income people, noted that Indiana’s plan is derived from a successful demonstration project that has been in effect since 2007, so its approval doesn’t necessarily apply to other states.

Under the Medicaid expansion that is part of the Affordable Care Act, the federal government pays the full price for covering newly eligible adults with incomes up to 138 percent of the federal poverty level ($16,105) through 2016, and then gradually lowers its share to 90 percent in 2020 and beyond.

Since the Supreme Court’s 2012 decision making Medicaid expansion a state option, the issue has become more political than practical. Despite the offer of billions of dollars in federal aid, Republican governors and lawmakers in many states have rejected the deal, fearing they could lose their jobs if they were seen cooperating with the Obama administration on a law most conservatives disagree with. Some states also worry that even the 10 percent share may be too much for them to afford, or that the federal government will scale back its contribution sometime in the future.

Since the Nov. 4 elections, those fears seem to have subsided, said Joan Alker, director of the Georgetown University Center for Children and Families, which advocates Medicaid expansion.

After last year’s elections, governors in Alaska, Idaho, Montana, Tennessee, Utah and Wyoming asked lawmakers to approve detailed proposals for expanding the federal-state health plan for low-income adults, in some cases restarting previous efforts to seek approval for expansion.

In a smaller group of states in the South — Alabama, North Carolina and Texas — governors said for the first time they were open to the idea of expanding Medicaid. Other than Arkansas, no Southern state has done so.

If all six states now considering expansion plans win federal approval, more than 600,000 additional people could be eligible for Medicaid coverage.

Following is a rundown of Medicaid expansion proposals in the states most likely to move forward this year:

Alaska: Newly elected Gov. Bill Walker, the nation’s only Independent governor, wants to cover about 20,000 Alaskans through traditional Medicaid starting July 1. If state lawmakers agree with the governor’s plan, Alaska could be the next state to start enrolling newly eligible adults this year.

According to a study by The Urban Institute, Walker’s expansion plan would cut the state’s uninsured rate by more than half. Another study, commissioned by the state health agency, predicts that between July of this year and 2020, expansion would save Alaska $29 million as the federal government picks up some health care costs the state is bearing now.

Republican lawmakers, who hold a majority in both chambers of the legislature, have agreed to hear evidence from the Walker administration on the benefits of expansion for the state’s budget and economy. But most oppose the plan on principle, and a multibillion-dollar budget gap and crashing oil prices compete for their attention.

Idaho: In his Jan. 12 State of the State address, Republican Gov. Butch Otter asked lawmakers to consider evidence in favor of expanding Medicaid to 103,000 low-income Idahoans through a customized expansion plan.

Under a proposal presented in a paper by a working group Otter appointed in 2012, residents with incomes below the federal poverty level would be assigned to a managed-care plan within the existing Medicaid program. Residents with incomes between 100 percent and 138 percent of the federal poverty level could sign up for a private insurance plan on the exchange, much like Arkansas residents.

If lawmakers pass Otter’s plan, which he says has the tacit approval of the federal government, the state could save $173 million over the next 10 years as more costs are covered under the higher federal match rate.

Montana: Democratic Gov. Steve Bullock asked lawmakers last month to approve legislation, the Healthy Montana Plan, that would expand traditional Medicaid coverage to about 70,000 Montanans. Republican lawmakers, who control both houses of the legislature, have proposed an alternative plan that would use state money instead of accepting money from the Obama administration and would limit coverage to about 15,000 low-income parents and veterans.

In 2013, a Medicaid expansion bill nearly passed the Montana Legislature. But a Democratic lawmaker who intended to vote for it accidentally pressed the wrong button. His vote could not be changed because a state law says legislative voting errors cannot be corrected if they would affect the outcome of the vote. The legislature did not meet the following year. This year, the legislature is in session and the balance of power is about the same as it was in 2013.

Tennessee: In December, Republican Gov. Bill Haslam announced he was close to an agreement with the federal government on an alternative expansion plan called Insure Tennessee. Under the proposal, the state would provide vouchers to help low-income residents pay premiums for employer-sponsored insurance. Low-income residents without employer-offered plans would receive coverage through a plan resembling a health reimbursement account, with premiums and co-payments for people with incomes above the federal poverty line.

Insure Tennessee, which would cover more than 300,000 residents, has been under consideration by the federal government for nearly two years.

Utah: Early last year, Republican Gov. Gary Herbert announced details of a plan to expand Medicaid to about 95,000 low-income adults using private insurance, similar to Arkansas’ plan. It would require low-income Utahans to show that they are making an effort to find jobs to qualify for coverage. Last month, he renewed his push to seek legislative approval for his proposal.

Wyoming: Republican Gov. Matt Mead has been discussing an alternative Medicaid expansion idea with the federal government since last summer. In November, he released details of Wyoming’s “Strategy for Health, Access, Responsibility and Employment,” which would cover an estimated 17,000 residents. All participants would make co-payments, and those with incomes above the federal poverty level would pay monthly premiums of $25 to $50. All participants would have access to employment assistance programs like job search services and vocational rehabilitation, but their Medicaid eligibility would not be affected.

The biggest nonexpansion states are Florida and Texas, where expansion would add a total of 2.6 million uninsured residents to the Medicaid rolls. But both the Florida and Texas legislatures are dominated by Republicans, and expansion remains a long shot.

Alabama and North Carolina also are deeply Republican but Republican governors Robert Bentley of Alabama and Pat McCrory of North Carolina both have made comments recently suggesting they are open to the idea of expanding Medicaid.

McCrory announced in January he has had preliminary discussions with the Obama administration about customizing the state’s approach to expansion. In December, Bentley told state lawmakers he would be open to a Medicaid expansion along the lines of Arkansas’ “private option,” under which newly eligible Medicaid beneficiaries purchase private health plans on the insurance exchange. Neither governor has made public a detailed proposal.

In Florida and Texas, billion-dollar federal Medicaid funds to compensate hospitals for unreimbursed care are set to expire soon — Florida’s in June and Texas’ in September 2016. Those impending deadlines and other provisions of the ACA are draining hospital revenue in both states. As a result, hospitals are pressuring both governors and Republican lawmakers to allow them to tap into the health care law’s intended countervailing benefits for hospitals by insuring more residents through a Medicaid expansion.

Republican Gov. Rick Scott of Florida announced his support for expanding Medicaid in 2013, but has not spent any political capital to make it happen. In Texas, former Republican Gov. Rick Perry was among the nation’s fiercest critics of the ACA. But his Republican successor, Greg Abbott, told a group of lawmakers in a private meeting in December that he wanted to know more about Utah’s alternative model for expansion, according to the Houston Chronicle.

Photo of Governor Bill Haslam: Nashville Area Chamber of Commerce via Flickr

Ebola Efforts Tax Strapped Public Health Agencies

By Christine Vestal, Stateline.org (MCT)

WASHINGTON — Dwindling resources may make it difficult for public health departments across the country to carry out intensive airport screenings, patient monitoring, public education and other preparations for a potential Ebola outbreak in the U.S.

Since 2008, diminishing federal funding for public health preparedness has meant the loss of 51,000 state and local public health jobs — more than one in five, according to a new survey by the Association of State and Territorial Health Officials. Congressional hearings to consider additional funding to prepare for an Ebola outbreak in the U.S. are scheduled for next week.

“It’s critically important to have a sustainable infrastructure, tools and the necessary resources to effectively address all potential health threats to the public, not just Ebola,” said James Blumenstock, emergency preparedness officer for the Association of State and Territorial Health Officials. “Public health threats don’t come one at a time, especially this time of year.”

Just as the first flu cases were cropping up last month, the Centers for Disease Control and Prevention (CDC) issued new guidelines requiring public health officials to monitor travelers entering the U.S. from West African countries Liberia, Sierra Leone and Guinea for 21 days.

Separately, several states, including California, Connecticut, Florida, Georgia, Illinois, Indiana, Maine, Maryland, New Hampshire, New Jersey, New York and Virginia issued even more stringent screening and quarantine orders to prevent the spread of Ebola within their borders, according to a legal analysis by Arizona State University law professor James Hodge for the Network for Public Health Law.

The primary source of money for such efforts, the CDC’s Public Health Emergency Preparedness cooperative agreement, began after the 2001 terrorist attacks in New York and Washington, D.C., to better prepare the nation’s public health system in emergency situations. But since then, funding has dipped from a high of more than $1 billion in 2006 to $585 million last year.

Another funding stream, the federal Hospital Preparedness Program administered by the U.S. Department of Health and Human Services, was launched around the same time to prepare health care workers for terrorist attacks, natural disasters, widespread foodborne illnesses and infectious disease outbreaks. But funding has fallen from $515 million in 2004 to $255 million this year.

In addition, many states have made cuts to their own public health preparedness funding. Depending on where you live, federal funding for state and local public health preparedness composes 75 to 90 percent of the total budget, with the rest made up of state and local funds.

“There is no uniformity among public health systems across the country,” said Jack Hermann, chief program officer of the National Association of City and County Health Officials.

Smaller jurisdictions may be more challenged because they have fewer resources, but they may have the advantage of everyone knowing everyone else. “Sometimes, the fire chief and the top health official are the same person,” Hermann said.

Public health’s most important resource is people — trained health care workers, analysts and educators, Blumenstock said. Even if Congress does appropriate more money in response to the current Ebola situation, finding and training those people won’t happen overnight.

State and local public health agencies learned the hard way that they needed to develop “administrative preparedness” by streamlining the hiring and contracting process, he said. During the H1N1 (swine flu) pandemic in 2009-2010, Congress appropriated $1.5 billion to help state and local governments fight its spread. “It took too long to convert those emergency funds into services in the community,” Blumenstock said. “We’re all optimistic we’ll do a better job of that this time.”

Last year, the CDC and other federal agencies, state health officials, nonprofits and research groups for the first time released a broad index of state public health readiness that goes beyond health agencies to include first responders, schools, volunteer organizations and other state agencies and community groups. The rating system, known as the National Health Security Preparedness Index, uses a variety of sources, such as CDC audit results and hospital data, to rate each state’s readiness on a scale of one to 10, with 10 being the best. The national average in 2013 was 7.2.

Massachusetts was the most prepared, followed by Rhode Island, Virginia, North Dakota, New York, Maryland, Connecticut and Vermont. Least prepared for a public health emergency was Nevada, followed by Alaska, Louisiana, Idaho, Montana, Arkansas, Georgia, Kansas and Mississippi.

Part of the measurement is based on performance in real-life situations, such as preparing for a possible Ebola outbreak. This year’s report is scheduled for release later this month.

So far, the states hardest hit by the Ebola response effort have been those with airports designated by the CDC for screening of incoming passengers from West Africa: Georgia, Illinois, New Jersey, New York and Virginia. “We’re not in a panic now, but we’re starting to get tired,” said David Trump, deputy commissioner for public health and preparedness in Virginia’s health department.

Trump said employees in his agency have been working overtime since August, and many have been reassigned. Some with administrative and other routine jobs are now on the front lines, contacting and monitoring people who have flown into Dulles International Airport from West African countries.

As many as 50 passengers arrive in Dulles each day from Liberia, Sierra Leone or Guinea. Most are returning U.S. residents and most are boarding connecting flights to a final destination outside of Virginia. As of last week, public health workers were monitoring 81 Virginia residents who had traveled from West Africa. That number is likely to rise in the next couple of months to between 200 and 300 and remain at that level for the foreseeable future, Trump said.

For passengers going to other states, U.S. Customs and the CDC coordinate with health officials in those states to ensure they are monitored according to their individual risk level. At least 40 other states have received one or more resident who has traveled from West Africa. According to the CDC, every passenger must be monitored for 21 days, most through phone calls at least once a day to check on their location, temperature and overall health. Only high-risk travelers, typically health care workers, who have come in direct contact with an Ebola patient must be seen in person by a public health worker.

In addition to active monitoring, Virginia and a handful of other states each have setup a “unified command” with the health commissioner in the lead role. Officials from multiple state agencies, including departments of public safety, homeland security and emergency management, education, transportation, environmental quality, port authority, aviation, social services and colleges and universities have been meeting twice weekly to coordinate Ebola-related preparedness activities.

Just last week, Trump said, a question came up about how to handle passengers who arrive on charter flights. He said other issues, such as finding a vendor to transport biohazardous waste and creating communications networks to effectively communicate with the public, have been discussed at the meetings.

Part of the work over the next couple of weeks, he said, will be to find out what funding is needed to sustain this effort for another year, or possibly two. “Right now there are a lot of people putting in 10- to 11-hour days. It’s not yet clear whether we are going to hire additional staff.”

Virginia may send more of its public health funds to Northern Virginia communities near Washington, D.C., where a disproportionate number of passengers from West Africa live. “We’re also looking at redirecting funds from other state agencies and waiting to see whether there will be federal funds,” Trump said.

AFP Photo/Issouf Sanogo

For Aging Inmates, Care Outside Prison Walls

By Christine Vestal, Stateline.org

WASHINGTON — Providing health care to an aging prison population is a large and growing cost for states. Not only do inmates develop debilitating conditions at a younger age than people who are not incarcerated, but caring for them in the harsh environment of prisons is far more expensive than it is on the outside.

Of the 2.3 million adults in state and federal prisons, about 246,000 are 50 or older, according to the National Institute of Corrections. The United States currently spends more than $16 billion annually caring for these aging inmates, and their numbers are projected to grow dramatically in the next 15 years.

“In a couple of years,” said Donna Strugar-Fritsch, a consultant with Health Management Associates, “this is the only thing people are going to be talking about. It’s getting worse by the minute.”

In the last five years, a handful of states have tried to contract with private nursing homes to care for some of their elderly and disabled inmates under so-called “medical parole” programs that allow prisoners to receive care outside of a prison while remaining in state custody. But few private facilities have been willing to accept them. Likewise, courts and communities have tended to resist so-called “compassionate release,” which cuts short the sentences of elderly or dying inmates so they can spend their last days on the outside.

Two years ago, Connecticut tried a different approach. Instead of attempting to place prisoners in nursing home beds next to someone’s elderly parent, the state asked the commercial nursing home industry to provide a facility that would accept a steady stream of prison inmates and patients from the state mental hospital who required long-term nursing care.

A handful of states are interested in following Connecticut’s lead; Michigan is seeking industry proposals for a similar arrangement, and Kentucky and Wisconsin are considering doing the same. But in other states, officials may lack the political will to take on residents who don’t want convicts in their midst. And even in Connecticut, it remains to be seen how far the state can take its plan, given the public backlash it already has experienced.

Technically, the winning bidder for Connecticut’s corrections business, 60 West, is just like any other nursing home. It is not locked down, does not employ guards, and it accepts applications from anyone. Located in Rocky Hill, the 95-bed nursing facility opened in May 2013 and is already half-full. Its only residents are patients transferred from state prisons and Connecticut Valley Hospital, the state’s only residential mental institution.

Besides providing more humane and less expensive care than Connecticut’s prisons can offer, 60 West is certified to receive federal Medicaid payments. As a result, the state’s taxpayers will save more than $5 million in corrections health care costs annually, once 60 West is filled.

Under the 1965 law that created Medicaid, anybody entering a state prison forfeited Medicaid eligibility. The same went for those entering local jails, juvenile lock-ups, and state mental institutions.

But an exception to that general rule opened up in 1997 when the U.S. Department of Health and Human Services wrote to state Medicaid directors saying inmates who leave state or local facilities for care in hospitals or nursing homes can get their bills paid by Medicaid. The exact federal contribution varies by state. But in all of them, Washington covers at least half the costs of the federal-state health care program for the poor.

In addition to the incarcerated, those on probation or parole or under house arrest can participate. Even in states that have not expanded Medicaid to low-income adults under the Affordable Care Act, most elderly or disabled prison inmates qualify under existing Medicaid rules, as long as they receive care outside.

That means some portion of the nation’s elderly and disabled inmates could receive federally-subsidized long-term care outside of prison walls, potentially saving states millions of dollars in health care costs.

The prison population in Connecticut is aging faster than in most other states and its growth is not expected to subside any time soon. Between 2007 and 2011, the proportion of inmates age 55 and older increased 45 percent, according to a survey by the Pew Charitable Trusts and the Association of State Correctional Administrators. Nationwide, the number of elderly inmates is projected to more than triple in the next 15 years, according to data compiled by the American Civil Liberties Union.

The rise in older prisoners is partly a result of tough-on-crime laws in the 1980s and 1990s, including mandatory minimum sentences and “three strikes” rules. It also reflects the aging of the U.S. population generally. Prisoners, like everyone else, are living longer.
Many elderly inmates came into the prison system late in life, some after serving previous sentences. Others are serving lengthy sentences because of the nature of their crimes.

Bedridden, in wheel chairs, and often suffering from dementia, elderly prisoners cost more than twice as much to care for as their younger counterparts, and most pose little threat to society. In prison infirmaries, they are often preyed upon by healthier inmates.

“Prisons aren’t equipped philosophically, legally, or personnel-wise to deal with the elderly in any way,” Strugar-Fritsch said. “It’s already a failed experiment for prisons to be serving as mental institutions. It will be another failed experiment if prisons try to serve as nursing homes.”

Photo: x1klima via Flickr

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King County’s Wellness Plan Beats The Odds

By Christine Vestal, Stateline.org

SEATTLE — When King County, Wash., launched its employee wellness program seven years ago, its motive was clear. “We were being eaten alive by runaway medical costs,” says the county’s top executive Dow Constantine.

By all accounts, the previous administration was desperate to bring down double-digit health care cost growth that threatened to destroy the entire budget.

That partially explains why King County, which spends nearly $200 million per year to insure 14,000 workers and their families, who mostly live and work here in the county seat, was willing to risk millions more on a wellness program that would prove to break the traditional mold.

It may also explain why labor unions took the unusual step of joining management in a plan that would ultimately shift more health care costs to workers.

But it doesn’t explain why this employee wellness program, which received an innovation award this year from Harvard University, has far surpassed all others in employee participation, health improvement, and health care savings.

The program’s unusually high financial incentives for participation and an extensive outreach program to promote it are credited in large part for the program’s success.

In its first five years (2007 to 2011), the county’s “Healthy Incentives” program invested $15 million and saved $46 million in health care spending with sustained participation by more than 90 percent of its employees. Two years ago, $61 million in surplus health care funds were returned to county coffers because cost growth was lower than actuaries had projected. Seattle, the state’s largest city, is the county seat.

Employee health improved dramatically, raising King County employees’ health status above the national average and keeping it there. Smoking rates dropped from 12 percent of employees to less than 5 percent, and more than 2,000 employees classified as overweight or obese at the start of the program lost at least 5 percent of their weight, more than halving their risk of diabetes.

With an average age of 48.5 years and practically no turnover, the county’s worker population is getting healthier even as it’s growing older.

These results, documented in a 2012 internal report by former staff economist John Scoggins, are remarkable when compared to the generally lackluster performance of other wellness programs run by large U.S. organizations, including state and local governments. According to a 2013 report from the Rand Corporation, about half of all U.S. large employers offer some type of wellness program and the number is growing. But few end up saving any money and employee participation has been limited. Many fizzle out after a year or two.

On average, only 47 percent of employees participate nationwide, and only 2 percent of organizations that offer the plans report any reduction in health care costs, according to the study, which was funded by the U.S. Departments of Labor and Health and Human Services. Overall savings from wellness plans offered by the organizations Rand surveyed were too small to be statistically valid.

Still, evidence shows that workplace health programs have the potential to promote habit-forming healthy behavior, improve employees’ health knowledge, and help workers get necessary screenings, immunizations, and follow-up care. The Affordable Care Act encourages employers to expand wellness programs by loosening federal regulations that limit the financial rewards employers can offer workers for reaching certain health goals such as quitting tobacco use.

King County’s intensive education and outreach effort cost the county nearly $7 million in the first two years. Since then, the effort has tapered, but six full-time employees still work to maintain the county’s high participation rate. “We want to make sure that no one is left out because of lack of knowledge,” said Brooke Bascom, who runs the program.

The biggest draw, Bascom said, has been the financial incentives King County offers its employees for participating. Other wellness programs offer much less substantial rewards, according to the Rand report.

Among the 10 percent of employees who don’t participate in Healthy Incentives, most say it’s because they don’t want to share private information about themselves. A small number are given exceptions because of health conditions or family issues that prevent them from participating.

Healthy Incentives offers a model that state and local governments should replicate, said Stephen Goldsmith, director of the innovations award program at Harvard’s Kennedy School of Government. Washington state is already emulating parts of King County’s wellness plan and Oregon is trying to start a similar program.

Here’s how the financial incentive part of the program works:

In the past, county employees didn’t pay a share of insurance premiums, but they did pay deductibles, co-insurance, and co-pays. Healthy Incentives allowed workers to shave $200 off of their $500 deductible simply by filling out a health assessment form. They could get another $200 knocked off if they completed an “individual action plan,” such as attending six Weight Watchers meetings at work, completing five phone sessions with a tobacco cessation coach, or learning how to better manage diabetes. Four years into the program, nonparticipants’ deductibles went up to $800.

In addition, employees who did not participate in the program had to pay a 10 percent higher co-insurance share of the cost of medical care after their deductibles were exhausted. When you put those two incentives together, the individual savings could come to more than $1,000 per year.

The program also encourages the use of less expensive generic drugs by increasing the co-pay for name-brand drugs from $15 to $30, while decreasing the co-pay for generic drugs from $10 to $7. These changes, put in place in 2010, resulted in $2.4 million savings to the county and a $1 million savings to employees by 2011.

The wellness program began when former County Executive Ron Sims, credited with the big idea, donated $1.3 million in county dollars to help a fledgling health care organization, the Puget Sound Health Alliance, develop a medical claims database to help identify doctors and hospitals in the county that offered the highest quality services at the lowest prices. He also recruited large local employers including Alaska Airlines, Boeing, and Starbucks to contribute money to the effort.

By analyzing claims data, the group found that one provider organization, Group Health Cooperative, was costing the county an average of $4,000 less per person per year while providing higher quality services than all other providers in the area. Group Health already served 20 percent of the county’s employees through its Seattle-based accountable care organization.

To encourage more employees to use Group Health, the county eliminated the deductible and added a graduated co-payment of $20 to $50 based on employees’ Healthy Incentives participation levels. Regence BlueShield patients remained subject to existing deductibles of up to $800. As a result, an additional 2,274 employees switched to Group Health, bringing its share of coverage to 30 percent. Between 2010 and 2011, the shift to Group Health reduced county expenditures by $6.5 million and saved employees $2.2 million.

“They needed a third party to do the research,” said Mary McWilliams who now runs the Alliance. “The unions would never have trusted the research if it had come from the county or the providers,” she said. The alliance since expanded to include the state of Washington.

Now called the Washington Health Alliance, the group plans to determine the highest-value services by physician groups and hospitals within the Regence network. Once those providers are identified, employees will once again be steered in their direction through reduced out-of-pocket expenses.

Photo: Stateline/MCT/Christine Vestal

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‘Private Option’ For Medicaid Expansion Would Cut Some Benefits

By Christine Vestal, Stateline.org

WASHINGTON — When Arkansas won federal approval to use Medicaid expansion dollars to help low-income people purchase private health insurance, officials on both sides of the aisle applauded the compromise.

For supporters of the Affordable Care Act, it meant coverage for the millions of uninsured Americans who live in states that have resisted Medicaid expansion under the ACA. For governors and lawmakers opposed to the law, it was a politically feasible way to accept billions in federal dollars and improve the overall health of their residents without embracing “Obamacare.”

Now, as more states craft their own versions of what is known as the “private option” — and Arkansas seeks revisions to its original plan — advocates are increasingly concerned that the private market approach to Medicaid expansion could erode the effectiveness of the Medicaid program.

At issue are so-called “wraparound” benefits, such as free rides to doctor’s offices, designed to give low-income people the same kind of care and health outcomes as people with higher incomes. Such benefits typically are not included in private insurance plans.

“Medicaid is different from private insurance for a lot of good reasons,” said Joan Alker, director of Georgetown University’s Center for Children and Families. “Trying to make it look like private insurance without Medicaid’s unique features could lead to worse health outcomes, increased hospitalization and more preventable deaths.”

Non-emergency transportation may be the most prominent “wraparound” benefit, but it is not the only one.

Other benefits include the periodic screening, diagnosis and treatment of children and young adults for conditions such as lead poisoning, malnutrition and mental illness, as well as limits on co-pays and premiums, which can prompt people to do without care. Medicaid agencies also are required to provide a consumer appeals process for rejections of eligibility and denial of claims.

Middle-class people with private insurance don’t expect any of these benefits to be included in their policies. “But for low-income people with no discretionary income, these services make a huge difference,” said policy analyst Marsha Simon, president of Simon and Company.

Supporters of the private option argue that newly eligible Medicaid enrollees are better off with private insurance. They point out, for example, that Medicaid recipients with private insurance would be able to keep their coverage even if their earnings increase and they eventually make too much to qualify for Medicaid.

Republican lawmakers in Arkansas recently touted the denial of wraparound services — and the resulting savings to the state — as they gathered the conservative votes they needed to renew the private option. The transportation benefit alone typically accounts for up to 2 percent of a state’s Medicaid costs, or about $83 million for Arkansas.

But Simon argued that providing transportation actually saves states money because it allows patients to see doctors regularly in their offices — perhaps avoiding a health crisis requiring an emergency ambulance ride to the hospital.

According to a new report from the Community Transportation Association of America, authored by Simon and Company, 32 percent of all the rides in 2013 were for behavioral health therapy — and the demand for such services is expected to increase. In the states where Medicaid expansion is already underway, an estimated 1.2 million adults have substance abuse problems and more than 1.2 million suffer from mental illness, according to the group.

Eighteen percent of the rides were for dialysis treatments, and 6 percent were for routine visits to doctors’ offices. Other destinations included adult day care, outpatient surgery facilities, cancer treatment centers, pharmacies, smoking cessation and weight loss centers and physical therapy facilities.

In approving Arkansas’s original plan, the U.S. Department of Health and Human Services required the state’s Medicaid agency to supplement private coverage for the newly eligible Medicaid enrollees by providing all wraparound services, which are mandatory under the 1965 Medicaid law.

But when it approved Iowa’s plan late last year, the federal government allowed two exceptions: Iowa could eliminate non-emergency transportation for one year and charge nominal premiums and co-pays to new enrollees. Pennsylvania is asking for similar dispensations and some new ones, and Arkansas lawmakers now say they want what Iowa has.

So far, Arkansas has yet to formally ask for an exemption from transportation services, but discussions in the Legislature indicate the state will soon request one. Pennsylvania’s private option proposal, which was filed last year, includes an exemption from transportation services, as well as a request to charge premiums and co-pays. Next in line are New Hampshire, where lawmakers approved a private option earlier this week (Democratic Gov. Maggie Hassan has said she will sign the bill), and Tennessee, Utah and Virginia, where officials are in the process of customizing their private option plans.

“I’d be really surprised if we see any more straight Medicaid expansions,” said Judith Solomon of the Center on Budget and Policy Priorities. “Every one of the remaining states wants to put its own stamp on it.”

Photo: ProgressOhio via Flickr

States Meld Medicare And Medicaid

Christine Vestal, Stateline.org

WASHINGTON — They are a diverse group of low-income people who are disabled or elderly. Many have multiple chronic illnesses, or are battling depression or substance abuse. Most will need long-term care at some point in their lives.

In the nearly 50 years since Medicaid and Medicare were enacted, the two health care programs — one for the poor and the other for the elderly and disabled — have remained separate, with different rules, duplicate benefits and conflicting financial incentives. The result has been wasted money and disjointed care for more than 10 million “dual eligibles,” the Americans who qualify for both programs.

Massachusetts, which provided the model for the Affordable Care Act, is the first state to take advantage of an Affordable Care Act initiative designed to give dual eligibles better care at a lower cost. In 2011, the new Medicare-Medicaid Coordination Office began awarding $1 million planning grants to participating states and made critical Medicare data available to them for the first time. Now, instead of carrying separate cards for Medicare and Medicaid, dual eligibles in Massachusetts who are enrolled in the state’s One Care program will get a single health plan and a case manager to coordinate their care.

Other states are preparing to follow. California will begin participating in May, and these states will join later this year and in 2015: Colorado, Connecticut, Idaho, Illinois, Iowa, Michigan, Minnesota, Missouri, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Texas, Virginia and Washington.

The stakes are high: As a group, dual eligibles comprise 15 percent of all Medicaid enrollees but account for nearly 40 percent of all costs, or about $109.9 billion in 2009, according to the most recent federal statistics. For Medicare, they represent 20 percent of all enrollees and more than 30 percent of costs, or $162.1 billion in 2009.

Boston resident Dennis Heaphy, a 52-year old quadriplegic, said the January 1 launch of One Care already has changed his life. “I feel like I won the lottery,” he said. Heaphy’s case manager procured a larger bed for him, making it easier for his attendants to assist him. Previously, Heaphy had been told that neither Medicaid nor Medicare would foot the bill for a bigger bed. “I literally called the equipment person in my plan and within two days I had a new bed,” he said.

In the past, individual states have tried to integrate the care of dual eligibles. Massachusetts, for example, has had Senior Care Options, an integrated Medicare-Medicaid program for seniors, for 15 years. But the idea has never been tried on a national scale, according to James Verdier, health policy analyst at Mathematica Policy Research.

“For decades, we’ve been asking people with the highest needs and the least ability to navigate a complex care system to figure out the most complicated health care puzzles that exist,” he said.

Under the initiative, state Medicaid programs and the federal Medicare agency agree to split any cost savings that result from the experiment. Most states are contracting with managed care organizations to integrate the two plans, but Colorado, Connecticut, Iowa, Missouri, North Carolina and Oklahoma plan to integrate the two programs on their own.

Heaphy, who is an advocate for people with disabilities, said he and others are closely monitoring Massachusetts’ experiment. “We feel a real responsibility to get it right because everybody in the country is watching us,” he said.

Medicaid — the federal-state health care program for the poor — serves more than 60 million Americans, mostly children and pregnant women. Medicare serves about 50 million seniors and people with disabilities.

Medicare pays for prescription drugs, most hospital services and short-term nursing home stays. Medicaid pays for nursing home care after the first 90 days, home-based long-term care, dental care and transportation to and from doctor’s offices and hospitals. Medicaid also reimburses its low-income members for their Medicare co-pays and deductibles.

But for dual eligibles, it can be difficult to keep track of who pays for what. Furthermore, experts believe that misaligned financial incentives in the two programs have cost states and the federal government billions of dollars.

AFP Photo/Rick Gershon