Medicaid politics comes to Harrisburg via Pennsylvania's state budget debate

Why should Congress have all the fun?

Because just as debate over federal health care policy is about to reach its mid-summer boiling point, Republican lawmakers here are asking the Wolf Administration to move on Medicaid reforms in the state budget package.

It looks like another potential flashpoint in the effort to finish the state's $32 billion general fund spending plan for the fiscal year that started July 1.

Medicaid, the primary public medical assistance program for the poor, blind and disabled, is one of the biggest cost-drivers in state government because of the runaway train nature of health care costs.

A little background:

In Pennsylvania, state taxpayers pay about half the cost of Medicaid treatments, and in the 2015-16 budget year, the program accounted for 29 percent of all state general fund spending.

From 2004 through 2014, before federal Affordable Care Act changes took effect here, general fund dollars spent on medical assistance lines jumped from $3.9 billion to $6.0 billion, or nearly 54 percent.

In other words, for many fiscally conservative Republicans, it is the major spigot to turn.

Which brings us to the current state budget debate.

As part of their consideration of a final mix of $700-to-$800 million in new taxes and revenues needed to balance the $32 billion 2017-18 spending plan, majority Republicans in the legislature want more controls on future medical assistance spending.

The changes proposed are not that Draconian, supporters stress, in the sense that they don't cut services or force people out of the program. Mostly, they say, they do tighten rules for participation and, in some cases, stress efficiency.

House Majority Leader Dave Reed, R-Indiana County, last week called many of the proposals included in a House-passed bill "re-enactment of a lot of the welfare reforms that were actually put into place in the Clinton administration and the Ridge administration that fell by the wayside during the Rendell administration.

"With our entitlement spending being one of the major cost drivers in the state right now, until we're able to bring that under control, we're going to continue to have billion-dollar deficits year after year," Reed continued. "This is a movement to continue to try to address that issue in the long-term as well as the short-term."

It is unclear how much money, if any, the House-backed changes would save, though supporters believe at the least it would slow the rate of cost growth in future years.

Top ideas include:

* Instituting a work / work-search requirement for medical assistance recipients who are "physically and mentally able to do so."

Once pursued by former Gov. Tom Corbett, this provision got new life in GOP circles after the Trump Administration's Department of Health and Human Services wrote to governors in March encouraging reforms at the state level.

Former Gov. Tom Corbett once proposed a work requirement for medical assistance in Pennsylvania. Then he lost an election and the proposal was dropped.

Work / work-search requirements were mentioned prominently in the letter from Health and Human Services Secretary Tom Price.

While the legislation directs the Wolf Administration to seek the change, supporters say they envision a plan that would mirror requirements already in place for food stamp and cash assistance programs.

Those requirements, proponents note, typically exclude the elderly, disabled and pregnant women. For food stamps, able-bodied adults without dependents are asked, for example, to work, enroll in a job training program or school, or volunteer.

The state Department of Human Services notes that 58 percent of Pennsylvanians who qualified through Medicaid through the Affordable Care Act are currently employed. That means about 350,000 aren't working.

About another 140,000 pre-Obamacare medical assistance clients could face the new requirement, assuming it screens out the blind and disabled.

The goal is to provide at least some of those people with a carrot to get a job, in the hopes that, for many, that will become an important first step to self-sufficiency.

"It is incumbent upon this body to help those who can't help themselves and also we share a responsibility to help those who can help themselves realize they can do so," Rep. Eric Nelson, R-Westmoreland County, argued in last week's House floor debate.

"Requiring an individual to have to volunteer their time is not a big ask. Encouraging someone to work 20 hours a week is also not a big ask."

* Health Minders.

Another request is that the Wolf Administration test-drive a data-driven care management program in one region of the state, to see if it can eliminate treatment errors and otherwise wring costs out of the system.

Championed by Sen. Scott Martin, R-Lancaster County, this plan is patterned after a program in Alaska that, in part, provides direct health coaching to medical assistance patients.

The plan there leaves patients with a health needs assessment and a road map to dealing with their most pressing needs. The idea is to to encourage more routine check-ups with a regular physician and fewer sick-call stops at the nearest emergency room.

The firm involved in Alaska has claimed to have trimmed Medicaid costs by over 14 percent. It's unclear if the results wold be similar here, but the proposal is to pilot it in one of Pennsylvania's medical markets to see.

Premiums for high-income families.

Perhaps the most controversial of all, this proposal is to charge a monthly premium to high-income families who use medical assistance to cover services for profoundly disabled children - like overnight nursing care or a ventilation unit.

Under the scheme passed by House Republicans, the premiums would only kick in for families with household incomes at or above 10 times the federal poverty limit, or $246,000 for a family of four.

Affected families would have to certify there is no other health insurance that covers the services in question - that's the only reason medical assistance is supposed to be available for these high earners - and then, pay a premium capped at $240 a month.

* Cost savings searches.

This provision would require DHS to seek a cost waiver before seeking a supplemental appropriation in the state budget.

Noting state medical assistance appropriations have run over budget for many years running, this provision asks the administration to "push their own comfort zones and try to explore options if a supplemental is required," said Drew Crompton, chief of staff to Senate President Pro Tempore Joe Scarnati, R-Jefferson County. "We thought this was a reasonable balance."

Democrats, publicly at least, have been united against the changes thus far. All 76 members voting on House Bill 59 this week were opposed.

Some critics argued the changes will have little effect on the budget since care for the elderly and disabled account for nearly 80 percent of medical assistance program costs.

Others fumed at the idea of targeting the state's most vulnerable residents for savings when state government gives whole industries tax breaks.

"We can't grow with a status quo government that gives big companies the type of tax breaks that we give Marcellus Shale (drillers), but we continue to hurt families by cutting the services they need," argued Rep. Ed Gainey, of Pittsburgh.

The final version of the human services code is yet to be negotiated as part of the final budget package, and Gov. Tom Wolf's spokesman was also highly critical of the House-passed bill in a statement last week.

"Governor Wolf strongly opposes these backdoor changes that could have widespread and potentially life-changing effects on the health and well-being of millions of Pennsylvanians," said Wolf's press secretary, J.J. Abbott.

"Beyond the substance of these changes, the process flies in the face of good government... There was no input from stakeholders or families that would be affected and no formal fiscal analysis," he added.

But it was just as clear this week that Senate Republicans, too, want medical assistance reforms on the table in the final-stage budget talks.

"There's many components of the House reforms that will be well-received by members of the Senate," Senate Appropriations Committee Chairman Pat Browne, R-Lehigh County.

"We're hopeful to give them fair consideration, and we're also hopeful that the governor does too."

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