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Do some states want federal takeover of Medicaid program?
There are probably some states that wouldn't mind if their Medicaid program was taken over by the federal government, according to Leslie Hendrickson, PhD, principal of Hendrickson Development, an East Windsor, NJ-based consulting group which helps to develop and strengthen long-term care programs
"Medicaid is widely described as a state/federal partnership, but the feds own 51% of the partnership. If you don't believe it, look at the [maintenance of effort requirements] that came with the PPACA [Patient Protection and Affordable Care Act]," he says. "As long as the feds want to run the Medicaid program, then why not let them?"
Dr. Hendrickson points to Idaho and Utah as examples of states that could potentially benefit by giving a block grant to the federal government. "They could say, 'Here's how much state money we spent on Medicaid in the last year. We will give you that money and you can run our Medicaid program.' This puts the risk of Medicaid onto the federal government and not the state," he says.
There is a lot of discussion currently about the possibility of the federal government giving a block grant to the states, notes Dr. Hendrickson. "Why not reverse the process and let states give a block grant to the feds?" he asks.
Dr. Hendrickson notes that the PPACA gives the federal government the right to step in if states do not create their Health Insurance Exchanges. "I don't think the feds have evolved a strategy yet for dealing with states that don't comply," he says. "I think it's highly likely that the feds could end up running health exchanges for 10 or 15 states."
Problem of uninsured
Just because 26 states have joined the lawsuit challenging the constitutionality of some provision in the PPACA, he says, doesn't necessarily mean those states won't ultimately cooperate. "It doesn't mean that all or most of them aren't going to do anything," Dr. Hendrickson says. "The chances are that the majority of states will in fact be enacting some kind of insurance expansions."
One reason for this, says Dr. Hendrickson, is that publicly elected officials know it's not good to have hundreds of thousands of uninsured individuals in the state. "People with insurance get better health care. Having large numbers of uninsured drives the margins of your hospitals down to basically zero, pushing them into consolidation and bankruptcy," he says. "It puts constant pressure on your charity care allocations."
Dr. Hendrickson gives the example of Colorado as a state that has done excellent health planning in dealing with the problem of its uninsured, but nonetheless still joined the lawsuit against the PPACA. "Before the PPACA came along, Colorado had spent years working on its uninsured problems and was developing ways to expand health care coverage," he says. One idea Colorado came up with was using a hospital provider tax, says Dr. Hendrickson, and the state is substantially expanding health care coverage of uninsured individuals.
"That is a state that is pushing ahead and making practical accomplishments, even though in joining the lawsuit you might think they were opposed to the health care expansion principles in the PPACA," Dr. Hendrickson says.
Both providers and health plans would rather have an insured population that can pay for its health care, adds Dr. Hendrickson. "There is an enormous impetus for states to go along with at least the fundamental idea of the PPACA, which is to lower the number of uninsured," he says. "The sweeteners that the feds threw in will allay some of the cost fears about being in the program."
For example, states also have two years of the federal government paying to raise primary care rates up to Medicare levels, Dr. Hendrickson notes. "Granted, federal funds for the expansions phases out a little bit by 2020," he says. "But almost all the funds needed for the expansion, administrative expenses excepted, will be provided by the feds at 90% of better."