Getting health reform right the first time

Jan Hudson

Policymakers in Michigan will soon have key decisions to make as health reform implementation progresses. Will they choose to do it right the first time, or follow their current strategy of remedial public policy?

When programs require a financial investment, policymakers say the state has no money to invest, and yet there are always funds to cover remedial services. Will the current approach of cutting programs in the name of fiscal restraint only to fund those necessary services in higher-cost settings be their guide?

For example, children are eligible for Medicaid or MIChild, but are not aware or enrolled because outreach funds and efforts have been eliminated. They are then treated in hospital emergency rooms instead of doctors offices. Or, Medicaid services are eliminated “to save funds” and untreated illnesses become life-threatening, resulting in intensive care stays that could have been avoided.

Early childhood and education programs have been cut or weakened through continued state disinvestment. A Casey Foundation report ranks Michigan ranks 34th among the 50 states in children who are proficient at reading by the end of third grade. Colleges then spend considerable time and cost on remedial education to correct the deficiencies.

Community mental health services are inadequately funded and were severely cut in this budget year. This means services are not provided until a crisis occurs, resulting at times with a person entering the corrections system. Wayne County Prosecutor Kym Worthy recently called for more aggressive mental health, preschool and drug treatment funding.

Federal health care reform presents the opportunity to make dramatic changes in the health care system and the way it’s delivered, defined and funded. A key question is: Will policymakers take advantage of these opportunities — pass needed legislation, and provide the necessary funding and staff for a successful implementation, or will they try to “do more with less” and skate by on the cheap?

If policymakers choose the short-sighted approach in the name of fiscal restraint  then we cannot expect to see the full potential of improvements to the current systems and health outcomes. It is critical that they acknowledge the need for additional resources and supporting public policy so that health reform implementation can be done right the first time.

We can pay now, we can pay later – or both. Will health care reform be more of the same, or will it be implemented right the first time?

– Jan Hudson

Ouch! Survey results pinch

Judy Putnam

A recently released survey of local Michigan officials has a depressing finding: Only 1 percent of local officials think the American Recovery and Reinvestment Act has helped improve local economic conditions “very much.” Two out of every three say it has not helped at all to date, and more than half predict it won’t help at all over the long term.

Ouch! That’s a blow for those of us who have been advocating for extending vital features of the ARRA. (Those include extending the enhanced federal Medicaid match that will offer more than $500 million for next year’s state budget, Earned Income Tax Credit expansions, Child Tax Credit to benefit working poor families of nearly 600,000 kids in Michigan and 99 weeks of unemployment benefits for the state’s long-term unemployed.)

ARRA has poured critical dollars into our state at a critical time. Few of those dollars, however, went directly to local governments, a fact pointed out by the Michigan Municipal League in a well-publicized letter to Vice President Biden last year. Local governments struggle with the double whammy of sharply reduced revenue sharing from the state and declining property values, causing layoffs of public safety workers and other hardships.

But the Recovery Act money has flowed to many people in the communities: the unemployed, households on food assistance, those on Social Security and taxpayers. It is credited with saving an estimated 12,000 jobs in Michigan, most of them in education.  That help doesn’t go into a black hole — those are dollars that are quickly circulated in local economies.

The survey of more than 1,000 local officials was completed last fall. Perhaps, with time, more will see the benefit to their communities in projects such as weatherization.

Without doubt, the ARRA has paid off for local communities, even as tough times continue. What’s hard to imagine is how much worse it would be without the Recovery Act.

Michigan needed the Recovery Act in 2009. It needs it now – it’s important that Congress votes to extend the enhanced Medicaid match, EITC expansions, unemployment benefits and the Child Tax credit.

– Judy Putnam

House reports healthier budget

Jan Hudson

On Tuesday the House Appropriations Committee reported its recommended budget for the Department of Community Health to the full House. While the recommendation isn’t great, it is far superior to that passed by the Senate.

The House budget is about $103 million in general fund more than the Senate and avoids many of the most onerous cuts in the Senate-passed budget including: a cut of $57.5 million to non-Medicaid mental health funding (House reduction is $3.8 million); the elimination of some caretaker relatives and 19- and 20-year-olds from Medicaid; a 4 percent additional rate reduction to some physicians; and more cuts to the Healthy Michigan Fund, to name a few.

It will be a major challenge to maintain the House level of funding in view of the Revenue Estimating Conference that identified a $244 million revenue shortfall for the current year and about a $1 billion shortfall for FY2011.

Will policymakers find the courage to step forward and recommend revenue solutions to these problems rather than continuing their “cuts-only” approach?

I keep wondering: Do the facts really matter? A recent report by the Senate Fiscal Agency once again documents that Michigan is not a high-tax state. Will that fact matter to the Senate leadership? Or, will leaders continue to balance the budget on the backs of Michigan’s low-income families, children, elderly and disabled?

The cuts in Medicaid eligibility recommended by the Senate will not be possible under federal health reform maintenance of effort provisions, and with this knowledge, the House rejected the Senate proposal. This is good news for the “optional groups” whose Medicaid coverage was recommended for elimination. A report recently released by the League documents that the state has made little, if any, progress in adequately funding the Medicaid program over the last six years.

Without the federal recovery funds, and the corresponding maintenance of effort on eligibility over the last three years, it is difficult to say what the Medicaid program would look like today.

As it is, the state has enrolled about 420,000 more Medicaid-only recipients (those not receiving any cash assistance) since FY2005 and now, fortunately, can’t reduce eligibility without the loss of federal funds.

It is stunning to note the growth in the number of individuals who qualify only for Medicaid – - they receive no cash assistance. From fiscal years 2000 to 2009, that number nearly doubled, increasing from 652,000 to 1.2 million, as unemployment grew relentlessly and employer-sponsored coverage declined or became unaffordable. The number of Medicaid-only enrollees as of April 2010 is 1.4 million.

It is good news that both the Senate and House restored dental and podiatric services for adult Medicaid recipients; however, they could become targets to balance the budget given the new revenue projections.  Elimination of these services makes no fiscal or public policy sense particularly with the high incidence of diabetes in this state and the importance of these services in managing this disease.  Will that fact matter?

There is nothing wrong with raising the revenues to pay for the services Michigan residents want and need.  It does, however, take leadership and courage.

– Jan Hudson

Can health care reform cure my headache?

Jan Hudson

Every time I participate in a discussion on the aspects of health care reform, my head hurts more.  I continue to be awed by the intricacy, complexity, and breadth of this new legislation. But at the same time, I am inspired by the great opportunity to make positive changes to public programs, insurance products, and the health care delivery system, to name just a few.

There was a dizzying array of information provided at the Public Policy Forum co-sponsored by the Michigan League for Human Services and the Michigan Health Insurance Access Advisory Council on April 23, followed by a forum sponsored by the Detroit Regional Chamber and the Federal Reserve Bank of Chicago – Detroit Branch on April 26 and 27.

Public Sector Consultants brought a diverse group together May 12 to hear presentations by Department of Community Health Director Janet Olszewski and Insurance Commissioner Ken Ross, and to provide feedback on what next steps make sense. State staff are working diligently to identify all the facets that must be addressed to develop a strong foundation for ongoing implementation efforts.

The complexity of the federal health reform legislation will make it an ongoing challenge to implement. Thank goodness every component is not scheduled to be implemented immediately, and hopefully there is enough time to get it right.

The health care reform legislation will touch all of us. A few of the benefits follow:

• 32 million people are expected to gain health care coverage by 2019.
• Medicaid will be expanded (2014) to all families or individuals with incomes below 133 percent of the federal poverty level (about $14,400 for an individual).  A federally designated category or group will no longer be required to be eligible; the federal government will cover the cost of the new enrollees for the first three years.
• Young adults can remain on their parents’ health care plans up to age 26, without being an IRS-defined dependent or being in school.
• When the Insurance Exchange is implemented in 2014, subsidies will be available to assist families with incomes up to 400 percent of the poverty level (about $88,000 for family of four) be able to afford coverage. In addition, cost-sharing caps, on a sliding income scale, will also be implemented.
• Insurers will be prohibited from denying coverage for pre-existing conditions or cancelling coverage when an insured person gets sick. Insurers will also have to use a high percentage (80 percent to 85 percent) of  premiums for patient care, and will no longer be able to establish annual or lifetime limits on benefits.
• Small businesses will receive subsidies (up to 35 percent) to help them afford coverage for their employees.
• The Medicare Part D “donut hole” (the period when costs have reached a high level, but no assistance with drug costs is available) will gradually be reduced.
• Programs to promote wellness and prevent chronic disease will become a major focus.

These are only a small sampling of the extensive provisions included in this historic legislation. Many organizations are putting information on their websites. The key thing to remember in reviewing these documents is that they are works in progress, and may be updated frequently as more clarification or regulations are issued by the various federal offices involved in implementation. 

Families USA, the Kaiser Family Foundation, The Commonwealth Fund, and the Robert Wood Johnson Foundation include extensive materials on the health care reform legislation and its implementation.

I think Atul Gawande in The New Yorker in December articulately summed up where we are and what we need to do to make this work:

 “At this point, we can’t afford any illusions: the system won’t fix itself, and there’s no piece of legislation that will have all the answers, either… But if we’re willing to accept an arduous, messy, and continuous process we can come to grips with a problem even of this immensity. We’ve done it before.”

– Jan Hudson

Enormous task ahead on health care

Jan Hudson

With the release of more information and analyses on The Patient Protection and Affordable Care Act (Public Law 111-148), and the Health Care and Education Reconciliation Act of 2010, I am struck by the enormity of the task before us to implement the provision of health care reform.

I am very grateful for the expertise joining us at the Public Policy Forum, Federal Health Care Reform: Challenges for the States, Friday, April 23, sponsored by the Michigan League for Human Services in collaboration with the Michigan Health Insurance Access Advisory Council.

I am sure our speakers will provide valuable information as we seek to implement, in the best possible way, this great opportunity to provide health care coverage to 32 million more Americans, but also limit the financial burden on families while improving the overall system – a daunting task indeed.

I can’t think of a better person to open the policy forum than Ron Pollack, Executive Director, Families USA.  His belief in and commitment to meaningful health care coverage for all Americans has been unwavering and unflappable through all the years and all the turmoil and distraction preceding its passage. 

He always kept his eye on the finish line.  For many of us, he was the one to maintain our spirits when things looked particularly bleak earlier this year.  I know he will have great insights to share.

Our afternoon panel, Janet Olszewski, Kevin Seitz, Kris Nicholoff, Ed Wolking and Sister Mary Ellen Howard will provide a broad spectrum of perspectives on the Michigan specific challenges to implementation, from how to expand Medicaid, to insurance implications, to provider challenges, to business challenges, to challenges for those who are uninsured.

I know we all have many questions about health care reform and its impacts, and the policy forum will certainly provide a great opportunity to obtain answers. 

I’m hoping to find out how the young adult extension of coverage (to age 26) will be implemented – can any young adult without coverage qualify, will they have to be claimed as dependents on their parents’ income taxes to quality?  Will the Medicaid eligibility maintenance of effort require that the Adult Benefits Waiver be maintained at 62,000 recipients, rather than being reduced to 50,900 as is recommended in the FY2011 budget?

I am also hoping that recent analyses, summary of the law from Kaiser Family Foundation or  Summary of Medicaid, CHIP, and Low-Income Provisions in Health Care Reform from the Center for Children and Families, Georgetown University Health Policy Institute, based on the laws, will stop the dissemination of information that is misleading or an effort to create fear, such as the assertion by some elected officials that “every American will be required to buy health insurance or face jail time.”

Due to the complexity of this issue, I don’t think there can be too much discussion or education on the impacts and implementation issues related to health care reform. 

I encourage you to educate yourself by participating in as many conference calls, webinars, or policy forums as your time permits, starting (or continuing) with ours on April 23 at Eagle Eye Golf Club, just north of East Lansing.

Other opportunities include a forum by the Detroit Regional Chamber and a Webinar by Michigan’s Children.

– Jan Hudson