LTC
Bullet: Medicaid's Raw Deal Wednesday, August 22, 2007 Seattle-- LTC Comment: Elder
law attorneys don't have a monopoly on exploiting Medicaid for profit.
Rich states also rip off revenues intended for the needy in
poorer states. Details
after the ***news.*** *** FREE WEBINAR:
On August 29, 2007, Steve Moses will describe the "LTC
Graduate Seminar" in a free, 30-minute Webinar.
Sign up today at: https://www.gotomeeting.com/register/669770207
. Then, we trust
you'll want to enroll in the "LTC Grad Seminar" itself. We've conducted the program face-to-face in dozens of cities
all around the country to rave reviews.
Read all about it at http://www.centerltc.com/LTC_Grad_Seminar/online.htm,
including many pages of testimonials.
Now, you'll be able to take this course in easy, hour-long,
online doses over eight weeks. But
first, find out all about it at our introductory Webinar on August 29.
Register now at https://www.gotomeeting.com/register/669770207
. *** *** SPECIAL THANKS to James and Catherine Dove of
"LTC Connection" (www.ltcconnection.com)
for donating the "Go to Webinar" software that allows us to
bring you the educational resources of the Center for Long-Term Care
Reform and Steve Moses online. Check
out our hour-long Webinar introduction to the Center's content-rich
website at https://www.gotomeeting.com/register/549197239
. Register for
Steve's 30-minute August 29 Webinar about the "Long-Term Care
Graduate Seminar" at https://www.gotomeeting.com/register/669770207.
*** ***
NURSING HOME STATISTICAL YEARBOOK 2006 is now available on CD ROM from
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. Address questions to Mick Cowles at (202) 903-2403 voice; (509)
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or go to http://www.LongTermCareInfo.com
. *** LTC BULLET: MEDICAID'S
RAW DEAL LTC Comment: Our
thanks to Robert B. Helms of the American Enterprise Institute for the
idea and analysis which led to the following Policy Brief published by
the Flint Hills Center for Public Policy of Wichita, Kansas. Here's the "Executive Summary" followed
by the full Brief: "Too often public policy crafted with good
intentions yields unexpected—and unfortunate—outcomes. The Federal
Medical Assistance Percentage serves as an excellent example of this
phenomenon. Designed with the hope of assisting impoverished states in
the provision of Medicaid services, the program actually serves to line
the pockets of expansive budgets in wealthier states. As this policy
brief explains, Kansas is a donor state. Given the financial hurdles the
state’s Medicaid budget will face in the coming years, this situation
should not be allowed to continue." -------------- Flint Hills Center for Public Policy, Policy Brief,
Volume 4, Issue 3, August 2, 2007, www.flinthills.org/component/option,com_docman/task,doc_download/gid,671/. MEDICAID’S RAW DEAL:
HOW KANSANS SUBSIDIZE WEALTHIER STATES THROUGH THE FEDERAL
MEDICAL ASSISTANCE PERCENTAGE BY
STEPHEN A. MOSES Executive Summary Too often public policy crafted with good
intentions yields unexpected—and unfortunate— outcomes. The Federal
Medical Assistance Percentage serves as an excellent example of this
phenomenon. Designed with the hope of assisting impoverished states in
the provision of Medicaid services, the program actually serves to line
the pockets of expansive budgets in wealthier states. As this policy
brief explains, Kansas is a donor state. Given the financial hurdles the
state’s Medicaid budget will face in the coming years, this situation
should not be allowed to continue. Introduction In pursuing our mission to recommend sound public
policy for Kansas, the Flint Hills Center for Public Policy has done a
good deal of work on long-term care financing policy. The Flint Hills
Center presented state legislative testimony on several occasions,
addressed community forums around the state and published a report
titled "Plain(s) Talk on Medicaid Long Term Care in Kansas: A Case
Study of Medicaid and LTC Financing in Kansas" authored by Stephen
Moses of the Center for Long-Term Care Reform. Indeed, The Flint Hills Center has conducted many
studies and published numerous reports on all aspects of the Medicaid
program in Kansas. Examples include its "Medicaid Handbook,"
numerous policy papers, editorials, and testimonies, all viewable at www.flinthills.org. This policy brief is a continuation of this effort.
Simply put, the purpose is to highlight an inequity in federal Medicaid
policy that forces Kansas to subsidize health care spending in other
states. The Federal Medical Assistance Percentage One very interesting factor about Medicaid is that
the program is funded partly with state money and partly with federal
funds. States pay what they are able and choose to pay for Medicaid. The
federal government matches that amount based on the state's FMAP or
Federal Medical Assistance Percentage. FMAPs vary inversely with the
economic prosperity of each state. The original idea was to help poorer
states afford comparable programs to wealthier states by giving them an
advantage in their access to federal funding. Thus, FMAPs range widely
from a minimum of 50 percent in New York and several other very
prosperous states to more than 75 percent in Mississippi. Basically, a rich state like New York gets one
dollar from the federal government for every dollar it commits to fund
Medicaid. A poor state like Mississippi gets approximately three dollars
for every dollar it puts into Medicaid. To bring the discussion back to
Kansas, the state's FMAP is roughly 60 percent. This means that Kansas
receives about $1.50 from the federal government for every dollar it
spends on Medicaid. One would expect, therefore, that relatively poor
states would receive proportionately more money from the federal coffers
for their Medicaid programs than relatively wealthy states. But that is
not the case. Some fascinating research by the American Enterprise
Institute's Robert B. Helms shows that exactly the opposite holds true.
(fn. 2) Following are
excerpts from Helms' paper (footnotes omitted). The paper includes
sources and references for the underlying data. o "Poorer
states today are falling behind as wealthier states are collecting a
disproportionate share of federal Medicaid dollars." (p. 1) o "[D]ata
for all states reveal that there is a negative relationship between the
per-capita amount of federal funds flowing to the states and the amount
of poverty in the states-that is, as a general tendency, the poorer the
state, the less federal money that state receives." (p. 2) o "Not
only can the wealthier states afford to spend more on Medicaid, the
open-ended process of obligating the federal government to match what
the state chooses to spend creates an incentive for states to increase
Medicaid spending relative to all other priorities." (p. 3) o "Clearly,
the FMAP procedure is not successfully achieving the original objective
of Medicaid: targeting federal assistance toward the states with the
greatest share of poverty. Poorer states today are falling behind as
wealthier states are collecting a disproportionate share of federal
Medicaid dollars." (p. 4) o "Numerous
analysts have pointed out that we have created a situation in which each
governor and state Congressional delegation has a strong incentive to
increase federal funding under the FMAP procedures rather than consider
reforms that would be in the best interest of those Medicaid is intended
to serve." (p. 4) o "Meanwhile,
Congress tries to control costs by passing new controls on payment rates
to providers and suppliers. This dissonance between state incentives to
expand eligibility and federal attempts to control expenditures can only
be expected to intensify in future years as the population ages and the
cost of caring for the disabled puts more pressure on federal and state
budgets. As in any system that relies primarily on price controls and
government rationing, Medicaid beneficiaries will have access to fewer
providers and will experience decreases in the quality of care."
(p. 5) o "With
limited resources, how does the government target resources to the
neediest? The present Medicaid program seems designed to do just the
opposite, shifting resources toward citizens who live in wealthier
states." (p. 5) How the Federal Medical Assistance Program Hurts
Kansas In discussing how FMAP affects Kansas Dr. Helms
explains that "NY gets over twice as much per poor person . . . as
does the state of Kansas. . . . This is the result even though Kansas
has a higher FMAP (61% in 2005) than does NY (50%)." He goes on to
explain: "This illustrates once again that it is not the FMAP that
is pumping more and more of the federal Medicaid dollars toward the
Northeast, but the open-ended payment policy that allows the wealthier
states to keep expanding their programs relative to what the poorer
states can do." (fn. 3) Federal taxpayers in Kansas have no choice but to
subsidize New York state's extremely generous Medicaid program, but poor
Kansans get less than half the return per capita from federal Medicaid
funds than do their counterparts in the Empire State. States that have relatively easy Medicaid LTC
eligibility rules, generous "spousal refusal" policy, truly
munificent benefits including home and community-based care without
asset transfer penalties, and ineffective estate recovery efforts, are
subsidized by Kansans. This perverse incentive encourages rich states to
throw more and more money toward Medicaid at the expense of poorer
states which lack the economic wherewithal to compete. Conclusion As long as the FMAP system works the way it does
now, more money will continue to flow away from poor people in
economically challenged states to more affluent people in economically
prosperous states. At a time when Kansas is struggling with the expense
of its own Medicaid program, the state cannot afford these subsidies.
Kansas policymakers must strive to rectify this imbalance and prevent
the continued siphoning off of the state’s limited resources. About the Author Stephen A. Moses is an Adjunct Scholar for the
Flint Hills Center for Public Policy in Wichita, Kansas and the
President of the Center for LTC Reform in Seattle, Washington. Mr. Moses
writes, speaks and consults throughout the United States on LTC policy.
He is the author of the study "Aging America's Achilles' Heel:
Medicaid LTC," published by The Cato Institute (www.cato.org).
Learn more about the Flint Hills Center for Public Policy at
www.flinthills.org and the Center for LTC Reform at www.centerltc.com. Stephen Moses can be reached at smoses@centerltc.com. Notes: 1. Available
at: http://www.centerltc.com/pubs/plains_talk_on_medicaid_ltc_in_kansas.pdf. 2. Robert
B. Helms, "The Medicaid Commission Report: A Dissent,"
American Enterprise Institute for Public Policy Research, Washington,
D.C., No. 2, January 2007, http://www.aei.org/publications/filter.all,pubID.25434/pub_detail.asp. 3. Personal
email communication May 17, 2007. During the research for our New York
LTC Compact project, we asked Dr. Helms to compare how the FMAP system
affects Kansas and New York. These comments arise from that discussion. Flint Hills Center for Public Policy The Flint Hills Center for Public Policy is a Kansas think tank created as an independent voice to help political decision makers make informed choices. The Flint Hills Center for Public Policy is a non-profit, nonpartisan policy think tank. While not involved in the implementation or administration of government policy, our goal is to inform and raise public awareness of policy issues. For more information, visit our website at www.flinthills.org. |