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McKenna: State can't afford unfettered Medicaid expansion

Gubernatorial candidate Rob McKenna says this state should take an activist role in shaping the growth of Medicaid under Obama's Affordable Care Act.
The drug Reserpine in tablet form being counted out to fill a prescription in a pharmacy.

The drug Reserpine in tablet form being counted out to fill a prescription in a pharmacy. Linda Bartlett/National Institutes of Health

Rob McKenna

Rob McKenna Office of Attorney General

Medicaid spending consumes nearly a quarter of Washington’s state budget. Its growing share of state spending, along with the aging of the baby boomer generation, puts the future of healthcare coverage for our elderly, disabled, and vulnerable families at risk. 

It is against this challenging backdrop that Congress passed a healthcare reform law that expanded Medicaid eligibility to potentially another 500,000 Washingtonians, some of whom already have private insurance. President Obama argued three years ago that "in the absence of cost controls and reform . . . we can’t simply put more people into a broken system that doesn’t work." Unfortunately, that's now where the federal government is headed.
 
Within Olympia, we've had little meaningful discussion about whether massively expanding Medicaid makes sense for our state since the Supreme Court gave us that option last month. Chief Justice John Roberts’ opinion on Medicaid was direct, though, faulting Congress for putting a “gun to the head” of states to coerce their participation in its expansion.
 
An optional Medicaid expansion may offer a path to greater coverage for some of Washington’s uninsured, but we cannot simply open the floodgates for another 500,000 enrollees. They would face real barriers to access and the potential for substandard care in this broken program.
 
Our state can use its new leverage to demand greater flexibility over its program. As Democratic Governor Brian Schweitzer of Montana said last week, “Unlike the federal government, Montana can’t just print money,” — and neither can we. We should not commit to any expansion until we have a willing federal partner, offering us flexibility to manage the program more effectively.
We must understand the short and long-term budget ramifications, as well as contingency options, that preserve the maximum amount of state flexibility, especially after the federal government stops paying for the entire program in 2016.
 
Real reform is necessary to avoid a looming fiscal cliff. Here are some ideas to consider:
  • Curb waste, fraud and abuse – With its effective Medicaid Fraud Control Unit, Washington should further expand state efforts to investigate and prosecute fraud perpetrated against taxpayers.
  • Consumer Engagement – Washington is one of just a few states without meaningful cost sharing for many Medicaid enrollees. Small co-pays and other affordable costs for current and newly eligible participants are proven ways to reduce unnecessary utilization and reward healthy choices.
  • Payment Reform – The state’s increasing use of coordinated care in Medicaid is a promising trend. The next frontier must include a systemic shift from volume-based, fee-for-service payments to providers toward paying for health outcomes with shared risk and realigned incentives. We need public-private partnerships which span the health care delivery system (hospitals, doctors, payers and patients) to achieve this goal.
  • Delivery System Reform – Washington Medicaid pays for services in a system that is organized around bureaucracies instead of people, resulting in duplication of effort, administrative inefficiencies and poor health outcomes. Significant savings can be achieved through an integrated delivery system designed around the consumer’s interest and needs.
  • Federal flexibility – The federal-state funding relationship for Medicaid is a relic of the 1960s. Our state generally receives one federal dollar for every dollar we spend, and only 50 cents on every dollar we save. A per-capita, block grant model that puts Medicaid on a sustainable budget is one way to realign incentives, provide a stable funding source and provide states a legitimate path forward on real innovation, free of unnecessary federal constraints.
We can and must reform our Medicaid system from an outdated, bureaucratic program into a more modern, flexible program that delivers more value for patients and taxpayers. 

 

Rob McKenna is the attorney general of Washington and a 2012 candidate for Governor.


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Comments:

Posted Tue, Jul 31, 8:14 a.m. Inappropriate

Don't know why Crosscut chose to post McKenna's biased opinion since is not qualified to address this subject and is just continueing the right wing radical position with total disregard to what is good for the people. At the least Crosscut should have included an opinion of a PROFESSIONAL on Medicaid

jcoake

Posted Tue, Jul 31, 4:21 p.m. Inappropriate

We really ought to know what the next governor thinks about the issue, and that means McKenna.

NotFan

Posted Wed, Aug 1, 10:10 p.m. Inappropriate

Who would you prefer? Roger Valdez?

BlueLight

Posted Tue, Jul 31, 10:42 a.m. Inappropriate

I’m not sure how suggesting the following steps to reform Medicaid, which is going broke, is a radical position.
1. Curb waste fraud and abuse.
2. Achieve consumer engagement through cost sharing.
3. Have payments linked the results of healthy out comes.
4. Reform the delivery system and make it more efficient.
5. Make the states responsible for delivering Medicaid without burdensome federal government regulations.
It seems to me you would want a governor who is willing to take a position on how to fix the problem. If you don’t like the proposed solutions, vote for the other guy. It is too easy for politicians to buy their votes by making promises to spend other people’s money. McKenna’s ideas are just baby steps, certainly not radical and don’t go far enough, but at least they are headed in the right direction.

Posted Tue, Jul 31, 11:22 a.m. Inappropriate

Well according to the Professional State Auditor, the DSHS is spending Millions of Medicaid and Medicare Dollars a year on non-emergency health care for people who are not eligible to recieve benefits. Some do not meet the financical guidelines and others are "undocumented people". There have been findings for over a decade, isn't it about time we had someone who actually cares about the Millions a year being wasted, instead of another status quo Democrat like Inslee that wants to see more spent on those who are not legally entitled to receive it?

Cameron

Posted Tue, Jul 31, 1:53 p.m. Inappropriate

Mr. McKenna's comments add virtually nothing to the stock of good ideas for managing Medicaid--whether in its current configuration or with an expanded population and revised benefit designs.

Most of the tactics he suggests are already in play in one way or another.

The addition of the state's "sicker" Medicaid population, known as SSI, is happening as he speaks; coordination of care is more advanced in this state than in most others; and measures such as requiring the very low-income to share costs at the point of service may be counterproductive (and in fact end up as unrealized revenue for providers who can't collect it, and often deliver services anyway).

The federal government will pay such a high percentage of these new Medicaid enrollees' costs that it would be managerial malpractice to turn it down.

Yes, without doubt the Affordable Care Act comes with a lot of complexity and requirements that limit states' options--but by comparison with historic Medicaid, these are not onerous.

Mr. McKenna's generalizations--devoid of the sharp, focused ideas that must be brought forward by anyone who aspires to build a better mousetrap--aren't enough for me to think that he even understands health policy, let alone has more talent to drive it forward.

When a state can take a huge bit out of its un- and under-insured population--at little direct cost and with likely positive return on investment--just saying "no" would put you in the dubious company of Govs. Rick Perry of Texas and Rick Scott of Florida.

Yes, those were among Mr. McKenna's fellow travellers in his failed attempt to derail the ACA (an agenda that Mr. McKenna pursued without portfolio or sponsoring client). Apparently, he intends to continue tilting at this imagined windmill throughout his candidacy.

Let it be said that the financials in this case, and the increased access to care and positive health status that go with it, are on the other side.

Seneca

Posted Tue, Jul 31, 2:08 p.m. Inappropriate

According to a recent analysis from the Congressional Budget Office, the claim that Medicaid under the Affordable Care Act would be costly to the states is wrong. Jeff Madrick cites the CBO report in "The Republicans' Medicaid Cruelty," posted this week at The New York Review of Books (http://www.nybooks.com/blogs/nyrblog/2012/jul/30/medicaid-cruelty/ ).

Rob McKenna, having failed in his Supreme Court challenge against ACA, is trying to help shift the battle to the states - yet another strategy in developing the cruel policies toward the poor that have lately been pursued by too many Republicans in power.

Posted Tue, Jul 31, 3:07 p.m. Inappropriate

I don't know of anyone who advocates cruelty to the poor, but Olympia is replete with people advocating cruelty to taxpayers, and unless state spending is brought under control, that cruelty will only increase.

dbreneman

Posted Sun, Aug 5, 11:08 a.m. Inappropriate

Do you honestly feel that the taxes you pay are more cruel to you than poor people not being able to access medical treatment is to them?

sarah90

Posted Tue, Jul 31, 4:04 p.m. Inappropriate

Mr. McKenna’s article contains several misleading statements:

“Medicaid spending … (as a) growing share of state spending, along with the aging of the baby boomer generation, puts the future of healthcare coverage for our elderly, disabled, and vulnerable families at risk.”

Medicaid currently covers 1.1 million Washingtonians: children, pregnant women, families (parent and caretaker relatives), and elderly, blind, and disabled adults. The two largest current Medicaid enrollee categories are blind/disabled and elderly. See: http://hrsa.dshs.wa.gov/news/enrollmentfigures/enrollmentbyprogram.pdf

Effective January 1, 2014, childless adults and parents/caretaker relatives not eligible for Medicaid coverage today will be added. Newly eligible adults must be age 19-65 and have incomes up to 138% of the Federal Poverty Level. See: http://www.leg.wa.gov/JointCommittees/HRI/Documents/July%202012/7-25-12%20HCA-JointSelectCommittee_MedicaidExpansion.pdf

“Congress passed a healthcare reform law that expanded Medicaid eligibility to potentially another 500,000 Washingtonians.”

The best current estimate of enrollment expansion is one done last year for the State by the Urban Institute. The UI’s model indicates 328,000 would be added. The State Health Care Authority thinks this may be too high and has asked the State Caseload Forecasting Council to develop a new estimate. See:
http://www.leg.wa.gov/JointCommittees/HRI/Documents/July%202012/7-25-12%20HCA-JointSelectCommittee_MedicaidExpansion.pdf

“We must understand the short and long-term budget ramifications, as well as contingency options, that preserve the maximum amount of state flexibility, especially after the federal government stops paying for the entire program in 2016.”

The inference is that the feds will end their Medicaid payments to the state in 2016. The fact is the feds will fund 100 percent of the Medicaid expansion through 2016, and then begin a phased reduction to 90 percent in 2020 and beyond. The current Medicaid program will continue to be funded in a state-federal partnership. Costs will be split approximately 50-50. Washington received $7.1 billion in FY2010.

“Curb waste, fraud and abuse – With its effective Medicaid Fraud Control Unit, Washington should further expand state efforts to investigate and prosecute fraud perpetrated against taxpayers.”

The 2012 Legislature passed SB 5978 which increased the state's ability to track down Medicaid fraud. In fact, it gave the AG's Fraud Control Unit an additional 12 FTEs to do just that. Most other state programs experienced staff cuts. See: http://apps.leg.wa.gov/billinfo/summary.aspx?bill=5978&year;=2011

“A per-capita, block grant model that puts Medicaid on a sustainable budget is one way to realign incentives, provide a stable funding source and provide states a legitimate path forward on real innovation, free of unnecessary federal constraints.”

This is the Paul Ryan (R-WI) budget approach that would cut Medicaid funding to states by one-third, which many critics say is not sustainable.

Posted Tue, Jul 31, 8 p.m. Inappropriate

Quoting the Urban institute Mr. Nelson? Really? A bunch of former Clinton Staffers? Sorry.

http://urban.org/about/officers-and-trustees.cfm

We have had findings in the State Auditors reports on DSHS which manages Medicaid for a decade... and now we are going to hire some folks to track it down? How progressive of you. The problems have already been identified, it is compliance that is the problem. There is no will in the current administration and majority to enforce current law. Vote for regime change in Olympia in November, it's a start.

Cameron

Posted Tue, Jul 31, 9:02 p.m. Inappropriate

Assuming AG McKenna is reading these comments, I would like to know what he thinks of someone's recent idea of trading the full responsibility for Medicaid with the fed for full responsibility for Public Education. Sorry, I have lost track of the proposer.

Pros
The Wa court has declared Public Education a prime purpose of this state. I assume most others are similar.
The trade would get rid of the need for any state Medicaid "solutions," let alone arguing about and then paying for what is decided to test again trial by fire. The feds have a long history of testing Medicare trial by fire, hopefully they have learned a thing or two?

51 big duplicative bureaucracies dispensed with.

Cons?

afreeman

Posted Wed, Aug 1, 5:23 a.m. Inappropriate

Crosscut Writer Judy Lightfoot writes,

"Rob McKenna, having failed in his Supreme Court challenge against ACA, is trying to help shift the battle to the states - yet another strategy in developing the cruel policies toward the poor that have lately been pursued by too many Republicans in power."

Defined failed Judy? Who is ill served by the Supreme Court being asked to review the Constitutionality of certain provisions of the ACA before they are imposed by the Federal Government? Did you really want an expansion of the Commerce Clause to allow the Government to mandate purchases and penalties outside their authority to move forward? Were you anticipating the Federal Government's withholding of Medicaid funding if, in the opinon of the Federal Government the State was not adequately complying with it's model for expansion of the program.

If AG McKenna and others did not ask the question, who would? Certainly not the authors of the Bill, their Party or the current administration. At what point, after Millions if not Billions have been spent on implementation and then litigation, would it be "alright" for the people to be allowed to ask the Constitutional question?

Perhaps the cruel policies toward the poor are actually those currently in place and administered by too many Democrats in power Judy. They seem to be very good at creating more poor, unemployed and encouraging more illegal aliens to reside in our communites.

Cameron

Posted Thu, Aug 2, 6:01 p.m. Inappropriate

It seems to me that DSHS is taking over the State budget in a way that is to similar to the combined juggernaut, Social Security and Medicare/Medicaid gradually engulfing the Federal budget. Thus afreeman's radical trade idea may make a lot of sense even though the likelihood of it being implemented is miniscule. Thank you Cameron for making an argument that needs to be heard; i.e.; that demand for medical services is unlimited; the only moral and progressive budget is infinity. Arguing for more funding eventually (rather soon probably) gets to the point where harm to the society exceeds the benefit.

kieth

Posted Sun, Aug 5, 11:15 a.m. Inappropriate

What "society" are you talking about, Kieth? My society isn't harmed by poor people being provided medical services. If yours is, perhaps you should examine the truly infinite budget in our country: military operations and technology. DSHS is Washington state's agency that must deal with growing need; there are 49 other states that must do so also. Those organizations don't produce the need; our skewed national priorities do.

sarah90

Posted Mon, Aug 6, 6:16 a.m. Inappropriate

Why is our "society" obligated to provide non-emergency medical services for people who are not legal members of our "society"? If anyone in the world who happens to make it to American soil has the right to subsidized, unlimited health care and services, why don't we simply pick up the entire medical bill for every country that is less fortunate than ourselves?

Cameron

Posted Sat, Aug 4, 12:21 a.m. Inappropriate

This article, combined with the article about McKenna's education plan, starkly expose the choice voters have this November.

McKenna understands the issues. He has put forth detailed proposals. Whenever you hear him interviewed, it comes through quite clearly that he knows exactly what is going on.

You may not agree with his proposals, but he HAS proposals. He knows the issues and has come up with a plan.

Meanwhile, Jay Inslee is conspicuous by his absence. Carpetbagger Jay - I mean Quitter Jay - I mean Silent Jay, has no clue what's going on in this state.

The Democrats have run this state for 30 years. Isn't it time for a change?

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