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Coffee CAHC policy round-up: April 19, 2017

Coffee CAHC is a twice-weekly newsletter where we round up and comment on the latest health coverage policy developments both nationally and here in Maine. We hope you find these updates helpful!

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Coffee CAHC

115th Congress, 1st session

128th Maine Legislature, 1st session

 

April 19, 2017

 

Hello, friends, and happy belated Patriot’s Day – that wonderful holiday that makes all of my friends who don’t live in either Maine or Massachusetts a little grumpy that we get a day off. The gorgeous summer weather over the long weekend was just icing on the cake (CAHC?).

I hope you all had a wonderfully relaxing few days, because hoooo, boy, are we gonna get into the thick of it here in the state from here to adjournment (which, remember, is June 21, which just so happens to also be the official first day of summer).

Today’s Coffee CAHC is coming to you a little later than usual on purpose, because I wanted you all to be among the first to know about a new report about Medicaid in Maine that was just presented this morning. That’s all down in the state section.

With that, let’s dive in!

 

National level

All quiet on the national front.

Seriously, federal health care news has slowed to a crawl while Congress is on their recess. Expect that to continue for another week or two: the Congressional recess continues through the rest of this week, and next week everybody in D.C. will be consumed by having to pass a “continuing resolution” or CR – basically a short-term budget patch that keeps the federal government in operation for another few months.

But remember this: even a “simple” CR represents a very real threat to health care and health coverage programs. Look at how much trouble the Republicans have had trying to agree on a health care bill. What if they can’t get a budget resolution agreed to by April 28th? A shutdown of the federal government, while it obviously has broader implications than “just” health care, is hardly a good thing. And if they are desperate to land a deal that can pass with the clock ticking to a shutdown, it’s possible that some health care and health coverage programs will be on the table.

To be clear, I haven’t heard that a shutdown seems likely…but a few months ago, I wouldn’t have guessed that the collapse of ACA repeal-and-replace was likely, either.

Here’s a brutally honest truth – anybody who tells you anything other than “who knows?” about what they think will happen in Washington right now is either outright lying, making it up as they go, or just following a hunch. There’s so much uncertainty that minute-by-minute updates are the only reliable source of info.

We’ll certainly be keeping a close eye on this for you all once Congress is back next week. Once the CR gets passed, though, expect health policy to be right back at the forefront. We’ll be watching and recapping for you the moment the gavel meets the sound block!*

 

*Yes, as a matter of fact I did look at the Wikipedia page for “gavel” to learn what the official name is for the thing that you smash a gavel on. That’s the level of carefully-informed service you deserve from your friendly neighborhood Coffee CAHC.

 

State level

This morning, our friends at Maine Equal Justice Partners, along with staff from Community Catalyst and the consulting firm Manatt, briefed us and others on the results of a new Manatt study about Medicaid in Maine. That study looked at what would happen in Maine if the feds change Medicaid (which we call MaineCare) to a “block grant” or “per capita cap” funding structure.

I’m going to let you know right now that this section will be light on links today. You’re getting more or less breaking news here: this JUST came out in the past couple of hours. Sorry for that! I’m recapping from my notes and an info sheet that was handed out at the event. Expect more soon as the report gets rolled out today to legislators and the press.

As a quick and overly basic recap, right now the way Medicaid works is that the state and the feds split the actual costs per enrollee, however many enrollees there are.

But in the American Health Care Act (AHCA), the GOP’s proposed replacement for the ACA, that would be switched to either per capita caps or block granting.

Block granting would be the state just getting one big pot of money from the feds to pay for Medicaid for the year, no matter how many people need it or what the state decides to cover. Anything outside of that block grant funding would have to be made up from state dollars.

Per capita caps would mean the state getting a fixed amount of money per enrollee, which at least would have the benefit of being responsive to how many people actually enroll in the program.

Either system would adjust funding over time based on some sort of calculation starting from a pre-determined base year, although exactly what that calculation would look like or what the base year would be is as much of a mystery as it is vitally important info for states to have, if such a system gets implemented.

Here are some of the highlights from the Manatt report:

  • Maine has very low per-enrollee Medicaid spending for adults (low-income parents and pregnant women) and people with disabilities. Our spending on adults was 2nd lowest in the country, and on people with disabilities, 20th That means we could get “locked in” to permanently low block grant or per capita cap rates if that funding is based on our current spending.
  • From 2000-2011, Maine had incredibly low growth in how much we spent on Medicaid enrollees. Our per-enrollee spending growth on children was the lowest in the country from 2000-2011, for adults was the 3rd lowest in the country, and for people with disabilities we were the 5th Our spending growth in all of those categories was lower than GDP growth, Consumer Price Index (CPI) growth, and “medical CPI” growth over that same period.
  • Since we haven’t expanded Medicaid, we would end up far worse off than the 31 states (and D.C.) that have expanded. This is because our future Medicaid funding will be based on what we receive now (depending on what they decided to use for a base year, of course, but it’s reasonable to assume it would be a year since 2011).
  • 75% of Maine’s Medicaid spending is for the elderly and people with disabilities (although those individuals make up less than half of the population who gets Medicaid in our state). No other state spends a higher percentage of their Medicaid dollars on these populations than we do. In other words, it’s the elderly and people with disabilities who will get hit the hardest if we start ratcheting down our Medicaid funding because the feds move us to block grants or per capita caps. It’s especially bad for people with disabilities, since we spend less per enrollee for these folks than the national average.
  • Finally, 62% of all federal funding that goes to our state budget is from Medicaid. It is, by far, the biggest source of funds we receive from the feds. The next highest is transportation, which, at 9%, doesn’t even come close.

This is, clearly, a bad deal for Maine. And one of the points that the folks from Manatt made is that block grants or per capita caps are especially bad for Maine (compared to other states), for the reasons outlined above. We’d lose, big time. Meanwhile, some other states might do ok, at least in terms of the funding they receive.

The other great point that was made is that switching to block grants or caps turns Medicaid from a “responsive” program to an unresponsive one. What do we mean by that? Right now, if we have a sudden economic downturn, or a big public health crisis breaks out, Medicaid is ready to respond. The funding is there for everybody who needs it. But with block grants or caps? Forget it. Under block grants, every new enrollee eats into that single pool of money; with per capita caps, every dollar in unanticipated health spending ends up on the state’s shoulders rather than the feds.

There’s no getting around the fact that we have some uncommon challenges in Maine. Our population is rural, less healthy than the nation as a whole, and the oldest in the country. Those are three things that mean higher costs. Block grants and caps guarantee that state lawmakers will be the ones making decisions about what gets covered (or not) and how much we want to spend on our people. That’s a burden that we here at CAHC feel is much better spread across the entire country, the way the program works currently.

 

Would you like to know more?

If you happen to be in the Bangor area, there’s a health care forum happening this Saturday, 11am, at the Bangor Public Library. It should be a great venue to get together with some other folks who are thinking about the future of health care in our state and learn more about what’s happening right now, here and federally.

The Center on Budget and Policy Priorities has a new report out on what Medicaid cuts would mean for kids and schools.

 

Until next time, friends, I remain,

 

-Steve

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