2005 Statement of Values On Medicaid

Increased Commitment of Resources with More Attention to Strengthening Home and Community Based Services and Medicaid Buy-In Provisions Necessary to Continue Progress

OVERVIEW

NCIL values Medicaid as the only source of health and long-term services for nearly nine million children and adults with disabilities, as well as for millions of senior citizens. It pays for early intervention services for infants and toddlers with disabilities so that they can enter school ready to learn and achieve. It provides essential supports for working age adults with disabilities so that they can lead independent lives. Medicaid also provides long-term care for senior citizens.

ACUTE CARE COST-EFFECTIVE AND NEEDS TO BE PRESERVED & STRENGTHENED

NCIL recognizes that Medicaid has been more cost-effective than the private market at holding down soaring health care costs and is a cost-effective policy response to increasing uninsurance in America. In fact, Holohan and Ghosh, 2005 and Kaiser/HRET surveys found that while the average annual percentage change in per person costs increased by 12.6% from 2000 to 2003 in private insurance, the average annual percentage change in the Medicaid program only increased by 6.9%. Furthermore Hadley and Holohan, Inquiry, 2004 found that Medicaid costs 30% less for adults and 10% less for children than private sector health insurance. One of the reasons for this is that Medicaid spends significantly less on administrative costs than private insurance. Accordingly, we believe that Medicaid’s acute care system is an essential safety net for all individuals and should be preserved and strengthened.

Contrary to assertions that the Medicaid program is spiraling out of control, experts such as Holohan and Ghosh have found that growing enrollment in Medicaid, caused in large part by economic adversity, is the primary factor driving increased costs. According to the Kaiser Commission’s Medicaid enrollment data, from June of 2000 to June 2003, enrollment in Medicaid increased by 8.4 million people, from 32.2 million to 40.6 million. (Holohan and Ghosh, “Understanding the Recent Growth In Medicaid Spending, 2000-2003,” Health Affairs, January 26, 2005). Since Medicaid, in its role as insurer of last resort, helped to provide a safety net for many who would otherwise have become uninsured, the program should be lauded for cushioning the impact of the recession upon the health and well being of millions of Americans.

NEED FOR LONG-TERM CARE REFORM

However, NCIL agrees with policymakers who believe that long-term care reform is essential to maximizing Medicaid as a force for good and as the key to children and adults with disabilities living with dignity and maximizing their independence. Clearly, there are aspects of Medicaid that can be improved upon such as the bias in funding towards institutional rather than home and community based long-term care.

Medicaid’s long-term care system requires major reform, but that reform can only take place with an infusion of additional resources to remedy systemic underfunding.

We support bipartisan proposals to undertake a comprehensive study of how long term care can best be delivered.

NCIL stands ready to work with policymakers to strengthen the program by providing additional resources and extending the availability of home and community based services and supports to everyone who wants them and can benefit from them.

COVERAGE OF OPTIONAL SERVICES AND POPULATIONS ARE ESSENTIAL TO INDEPENDENCE OF PERSONS WITH DISABILITIES

Reducing or capping funding for so-called “optional” services and populations and offering governors more latitude to cut people’s services and supports is not the answer. Just because services are classified as “optional” under Medicaid statute does not make them any less essential for promoting independence, self-sufficiency and quality of life of persons with disabilities.

STATE MEDICAID PROGRAMS HAVE DONE A SUPERIOR JOB CONTAINING SPIRALLING PRESCRIPTION DRUG PRICES AND SHOULD BE REWARDED FOR THEIR COST-EFFECTIVE DELIVERY

As evidenced by the rapidly increasing estimates of the costs of the Part D prescription drug benefit created by the Medicare Modernization Act, the federal government has struggled to contain the spiraling costs of prescription medication. However, states have demonstrated a far superior capacity for effectively containing prescription drug price inflation through the use of tools such as multi-state purchasing pools, generic prescription drugs and impact litigation. States that succeed in these efforts should be rewarded with incentives – not punished with arbitrary funding reductions.

POLICIES TO PROMOTE SELF-SUFFICIENCY THROUGH OFFERING AFFORDABLE HEALTH CARE AS A WORK INCENTIVE THROUGH THE MEDICAID BUY-IN MUST BE EXPANDED

Since the private insurance market is inordinately costly and discriminates against persons with pre-existing conditions and disabilities in the services that policies offer, Medicaid buy-in programs and related work incentives, as authorized by the Ticket-to-Work/ WIIA legislation of 1998, are essential components of a policy that promotes self-sufficiency for persons with disabilities. A crucial way to address the disproportionately high unemployment rate of persons with disabilities is to utilize this legislation to remove barriers created by the private health insurance market to ease an individual’s transition into the workforce.

NCIL Health Care Subcommittee