Medicare Compliance & Reimbursement

Critics point to proposals that endanger many disabled benes.

Dismayed by the National Governor's Association's proposed short-term Medicaid budget cuts, the Center for Budget and Policy Priorities released its retort Oct. 14, claiming that NGA proposals risk reducing access to necessary health services for vulnerable low-income beneficiaries.
 
In August, the NGA released "Medicaid Reform: A Preliminary Report," a set of recommendations for Congress to consider as legislators develop budget plans this fall to reduce projected federal Medicaid expenditures.

These NGA proposals are intended to build on longer-term Medicaid recommendations the governors made in June. The Medicaid Commission that the Bush administration established this summer included several NGA proposals in recommendations it made to Congress the following month for achieving $10 billion in Medicaid reductions over five years.

While the CBPP is opposed to many of the governors' recommendations, the organization agrees with NGA proposals to reduce Medicaid expenditures for prescription drugs. Those proposals would produce significant savings, enabling Congress to achieve nearly all of its required cuts to health care entitlement expenditures during the next five years--and would do so in ways that would not adversely affect low-income benes.

Benes' Increased Cost-Sharing Jeopardizes Health

The CBPP rejected many other NGA proposals, however, especially those relating to cost-sharing, which the policy group believes carries significant risks for benes. The report cites research demonstrating that significant increases in cost-sharing reduce low-income benes' use of essential health care services and thereby cause their health status to worsen.

Specifically, increased co-payments can cause substantial numbers of low-income people to have difficulty affording necessary medical care or prescription drugs and to forego health services or medications, according to the CPBPP.
 
Also, premiums can cause substantial numbers of low-income people not to enroll in public health coverage programs and to be uninsured as a result. For these reasons, federal Medicaid law has strictly limited cost sharing. 
  
Children, pregnant women and nursing home residents are exempt from co-payments under Medicaid. The co-payments for other benes may not exceed "nominal" levels of $3 per service or prescription. Federal Medicaid law also states that health care providers cannot deny services to benes who are unable to afford the co-payments.

Long-Term Care Benes Also Threatened

The NGA proposal could also end long-term care for some senior citizens and individuals with disabilities, the CBPP said.

Under the NGA proposal, some individuals in these groups who aren't dual eligibles or Social Security Income recipients--including those who have incomes
slightly above the SSI income limits (which are set well below the poverty line) and those in home- and community-based care--could lose Medicaid coverage for any LTC services.

CBPP Doesn't Want Benes Selling Assets For LTC

The CBPP further raises the prospect that the NGA recommendations would likely force many people to sell or mortgage their homes when they need Medicaid coverage for LTC services.

Under longstanding Medicaid rules, the Centers for Medicare and Medicaid Services has not considered home equity an asset in eligibility determinations.

Under the NGA proposal, however, home equity would be considered a countable asset for seniors applying for LTC coverage, including home- and community-based services and nursing home care. The new policy would apply to existing benes as well as new applicants.

The NGA health insurance tax credit proposal would weaken employer health coverage and could increase Medicaid enrollment, CBPP theorized.
 
Tax Credits May Hurt Employer-Based Plans

Although tax credits for small employers--particularly those with many low-wage workers--are likely to encourage some firms to offer health insurance, health tax credits for individuals could have the opposite effect, weakening the employer-based health insurance system.

The availability of an individual health tax credit would lead some employers to cease providing coverage to their workers or, in the case of new employers, not to offer coverage at all, the organization warned.