Medicaid

The 2012 budget proposal released by House Republicans this week would slash funding for a popular children's healthcare program, leaving children's welfare advocates wondering where millions of low-income enrollees would turn for care.

The GOP's 85-page budget blueprint doesn't mention the Children's Health Insurance Program, but CHIP would lose tens of billions of dollars under the proposal, which was unveiled Tuesday by House Budget Committee Chairman Paul Ryan (R-Wis.).

While the Democrats' new healthcare reform law extended CHIP through 2019 — and expanded funding through 2015 — the Ryan budget blueprint would repeal most of the that law, including the CHIP language, according to Ryan spokesman Stephen Spruiell.

Ryan's proposal would also cut Medicaid by $771 billion over the next decade.

CHIP, which provides health coverage to low-income youth ineligible for Medicaid, currently covers almost 8 million children. Bruce Lesley, president of First Focus, a children's welfare group, said the Ryan budget "would fundamentally threaten the well-being" of those youth.

The National Association of Counties has expressed concern that the House GOP’s 2012 budget plan would end up increasing the burden on local governments. 

“We believe that deficit reduction should not be accomplished by shifting costs to counties, imposing unfunded mandates, or pre-empting county programs or taxing authority,” Larry Naake, NACo’s executive director, wrote in a letter to Reps. Paul Ryan (R-Wis.) and Chris Van Hollen (D-Md.), the chairman and ranking member of the House Budget Committee. 

While House Budget Committee Chairman Paul Ryan (R-Wis.) is pitching his Medicaid overhaul as welfare reform, healthcare providers and liberal groups are warning that its greatest impact may be on seniors.

Because Medicare does not cover long-term care such as lengthy nursing home stays, some 14 million seniors and people with disabilities instead rely on Medicaid. The nursing home and assisted living industry is raising that concern in a yet-to-be-released statement from former Gov. Mark Parkinson (D-Kan.), obtained by The Hill.

"One million patients require long term care through Medicaid every day," Parkinson, the president and CEO of the American Health Care Association, said in the statement. "In 2010, Medicaid underfunded nursing facilities by $5.6 billion, or $17 per patient, per day. We owe it to these patients to find a workable solution while still meeting their critical care needs."

Liberal groups have raised similar concerns.

The Democratic governors will criticize Rep. Paul Ryan's proposal to turn Medicaid into a block grant program.

A top House Democrat said he will fight GOP plans to turn Medicaid into a block grant system.

Republicans are pointing to past statements from high-profile Democrats to build the case for transforming Medicaid into a block-grant program.

House Budget Committee Chairman Paul Ryan’s (R-Wis.) 2012 budget would transform the federal reimbursement for Medicaid into block grants that give states more flexibility to manage the healthcare programs for the poor, The Hill reported Wednesday night.

Republican governors and lawmakers are rallying behind the idea as a way for states to deal with massive budget deficits, but Democrats have pushed back against block-granting Medicaid, saying it would severely limit the social safety net.

On Thursday, less than a week before Ryan is scheduled to unveil his budget, the National Republican Congressional Committee (NRCC) started circulating old quotations from current Cabinet members and Democratic lawmakers that seem to express support for providing states with more flexibility on Medicaid, including block grants.

States and the federal government could have saved as much as $329 million in 2009 if they'd more often paid for generic drugs for Medicaid beneficiaries, according to a new report by Alex Brill of the conservative American Enterprise Institute.

The report found that Medicaid paid about $1.5 billion for 20 popular drugs that have generic equivalents - overpaying by about 20 percent over the $1.17 billion of their generic equivalents. The report adds that, with healthcare reform adding 16 million people to Medicaid and many drugs losing patent protection, the potential for savings is greater than ever.

"While some policymakers have advocated wholesale Medicaid reform," reads a summary of the research, "there are also intermediate opportunities for considerable savings within the existing program framework."

The report follows an earlier analysis that found that states and the federal government could save $682 million each year with just a one percentage point increase in Medicaid generic drug dispensing rate.

Some of the cuts outlined by HHS Secretary Kathleen Sebelius were "disappointing," according to several prominent Democrats.

They expect the proposals to be smaller than GOP cuts and see them as a way to start the bargaining process.

Republican lawmakers are increasingly concerned about a pending regulation that will seek to clarify what states can do with their Medicaid rates. 

Several medical providers have sued states, claiming that low reimbursement rates violate the Medicaid statute because beneficiaries can't access care if there are too few providers. The Supreme Court agreed to take up the issue earlier this year, and arguments are expected in the fall.

In its argument to dissuade the high court from getting involved, the Obama administration last December said it was working on regulations that may resolve any concerns.

The Department of Health and Human Services "has committed to conducting a rulemaking proceeding over the next year that will result in an authoritative interpretation of (the law)," the administration's brief says. "The Secretary's rulemaking may well resolve the disagreement among the circuits on these issues, making this Court's review unnecessary."

The legal brief goes on to say that HHS will unveil a notice of proposed rulemaking next month and a final rule by the end of the year.

It's not clear how far the department intends to go, however. Read more...