Medicaid is Back in the News, What Does it all Mean???

There seems to be another burst of information about Medicaid in the news cycle, and unless you have been dealing with health care finance for numerous years, it seems pretty arcane and complicated. Kudos to Markian Hawryluk who did an outstanding job of taking this difficult subject and putting it into a reasonably condensed story: $4 billion health care for poor Texans at risk. The sad thing to me is that we don’t really hear much of a policy debate or even a funding debate or discussion going on in Austin; it is simply being rejected due to political bluster.

I will try to explain the steps that have led to the recent outburst of media attention, and like most things in health care, it is never simple. Let’s start with the fact that Texas has barely held together “systems” of caring for low-income Texans by reimbursing health care providers (mostly hospitals who care for people in the ERs) for uncompensated care through a convoluted mixture of local and state dollars matched by federal dollars. We have relied on these matching federal dollars to keep the safety-net health care providers operating since the 1980’s, as the state and local governments in Texas have not had the ability and/or will to meet the needs in the communities.

Interestingly enough, the last time the federal dollars were restricted (in the late 1990’s); we faced a crisis in emergency care that impacted everybody, not just the indigent. It took several years to build back the capacity to meet the increasing demands of a rapidly growing state population. One could argue that we barely have enough capacity to care for what we have on hand right now, let alone future growth. Please understand that these dollars are payments to providers for services to low-income Texans, but if the funds don’t continue in one form or another, all people living in Texas will be facing limited access to care.

Back to our Medicaid funding challenge: in 2010, Texas negotiated with the federal government to move one mechanism of supplemental funding (formerly known as UPL) to a program called an 1115 Waiver. When it was negotiated, the intent of both state and federal governments was for it to fund programs that would be sustainable after the five year timeline because the uninsured would be covered by components of the Affordable Care Act (ACA). This waiver will expire in the end of 2016, and renegotiating this waiver is what has caused all the recent uproar.

It should not be news to you that Texas has rejected any sort of engagement with the federal government on the pieces of the ACA, including covering low income people with a Medicaid expansion or some alternative coverage mechanism. So when the funding from the 1115 waiver ends in 2016 (due to the Supreme Court ruling that this was a state option and not a mandate), the sustainability of the safety-net will again be seriously challenged. Prior to last week, there seemed to be a level of confidence amongst leadership of the Texas Medicaid program in Austin that the federal government would renew or extend the existing waiver with enough funding to help the safety-net providers. Last week, the federal team that negotiates these waivers made it clear (first to Florida, and then Texas), that they would not provide funding for uncompensated care that is provided to patients who should be covered by Medicaid or an alternative coverage mechanism.

So, how did Texas leadership respond? Governor Abbott immediately supported Florida’s lawsuit against the federal government and released a statement that Texas would not expand Medicaid coverage in any way. Lt. Governor Patrick already explained his position by demanding flexibility. From what we can tell, there are no discussions about what really happens to the safety net health care providers or access to health care for Texans across this state, only political statements.

What can we, those of us not in elected leadership positions, do about this? First, we need to push our state leadership to find reasonable and rational pathways forward. While there isn’t any specific legislation to write in to support, you can still demand that they work toward a reasonable solution and stop the political pandering. We cannot accept political bluster; it is only the health care in Texas that is really at stake.

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At the Halfway Point of the 84th Texas Legislature

With 10 weeks in the books and 10 weeks left to go, this week marks the halfway point for the Texas Legislature in 2015.  The cold weather of the winter is fading fast as bluebonnets bloom along the highways of our fine state, and inside the Capitol the pace of activities has definitely moved into high gear. So, how are things going for the priorities of the Harris County Healthcare Alliance? Let’s take a quick look at each point relating to our goal of improving access to healthcare through innovative funding and coverage initiatives:

  • Supporting efforts to provide health coverage to the over one million uninsured Harris County residents who could be eligible for coverage under federal law. It is seriously hard to believe that we have made so little progress on the issue of coverage expansion, especially considering that so many support this effort – our own Harris County Judge and several other urban and rural counties have endorsed the effort; the hospitals, physicians and health plans support it; the consumer groups, several religious organizations and all the disease groups are vocally supportive of it; and numerous business groups including the Texas Association of Business and the Greater Houston Partnership are on board. Unfortunately, the leadership in this state seems to be convinced (mostly by the TPPF, a conservative think tank) that any sort of expansion of coverage will give the appearance of handing President Obama a political victory, so they won’t even allow a legitimate public discussion of the issue. I wish I could be more positive, but it would seem that unless and until these leaders see the healthcare safety net collapsing, they just don’t seem interested.
  • Defend federal and state spending on Medicaid/CHIP for currently covered populations (including extending CHIP Reauthorization at the federal level). We actually have what appears to be good news on this front as the budget writers in both the Texas House and Senate are not looking to make any sort of cuts. It helps that the State of Texas has more cash on hand than at any time in my memory, but given the talk about tax cuts, we remain vigilant to ensure that existing programs are defended. Furthermore, there seems to be optimism in Congress that they can actually agree on extending the life of the CHIP program for another 2-4 years. How they work that extension into some sort of legislation is still anyone’s guess, but leadership from both parties and both chambers seem committed to helping kids and families who rely on CHIP coverage.
  • Encourage continuation of the Texas Medicaid 1115 Transformation and Quality Improvement Waiver. This issue is less about political courage and leadership at this point as it is about Texas bureaucrats negotiating with federal bureaucrats. The good news is that there seems to be bipartisan support for all the good work that has taken place across this state in the projects and programs that were initiated under the existing 1115 waiver. We are optimistic that we will be able to maintain at least some of that momentum going forward at the project and clinical levels. Unfortunately, the supportive funding that was included for uncompensated care in the original waiver will be difficult to renew at its current levels because the federal government had intended for the people below 100% of the federal poverty level to be covered by Medicaid. It would appear, based on the negotiations in other states, that they do not seem interested in continuing to subsidize hospital care for people who should have comprehensive (and already funded) Medicaid coverage.

Additionally, HCHA is working hard to promote and foster the development of sound healthcare policy; specifically, supporting the development of a comprehensive, coordinated system in Houston/Harris County that meets the healthcare needs of its residents. Here is a brief update on what the outlook is on those areas.

  • Supporting efforts to protect and improve the physical and behavioral health of adults, families and youth, including individuals and populations with special and/or chronic health-related needs. This Legislature has before it significant legislation relating to the entire enterprise of the Health and Human Services Commission that was developed by the Texas Sunset Commission over the last two years. The legislation was initially designed to complete the streamlining of the agencies started in 2003, but the contracting abnormalities discovered at the beginning of the year starting in the Office of the Inspector General seems to have dampened the aggressive timeline that Senator Nelson and Representative Price were targeting. Just last week, it was announced that the timelines for reorganization were being moved back a few years to ensure that the contract management pieces are cleaned up. While several consumer advocates still believe that this reorganization will put too much power into the hands of too few whom answer only to the Governor, there seems to be growing momentum for the streamlining effort. We will remain vigilant in this process to ensure that the actual needs of the people served by these programs are prioritized over bureaucratic wrangling.
  • Encouraging prevention programs and disease awareness through early screening, immunizations, clinic-based treatment and public health efforts. Thanks in part to the Ebola crisis last fall, there are several bills that look to help ensure our state is prepared for potential disease outbreaks, and even more bills have public health efforts. Stay tuned for next week’s blog where I will break down several efforts that HCHA is working to support.
  • Building awareness of the healthcare system sustainability and its impact on community health. We regularly reference the HCHA State of Health Report in our advocacy efforts and have talked with numerous legislators about the findings in this report. While this report is chocked full of useful data and trend information, it also includes policy recommendations to address the challenges with our region. We will continue to build awareness whenever we can relating to the excellent work that went into this report.

Medicaid Talks, Tax Cut Challenges, and Looming Lawsuits

Last week started with a very difficult press conference for health advocates. On Monday, March 2, Lt. Governor Dan Patrick and Sen. Charles Schwertner brought together the GOP caucus in the Senate to declare necessary reforms to the existing Medicaid system that must happen before progress on Medicaid expansion could ever be considered. While this may have sounded positive, the stipulations they set out included several “poison pills” that they knew the federal government would not likely approve. The only positive thing that several of us in the health care advocacy community noticed is that neither the Governor nor the Speaker was in attendance. Sometimes we have to look for small victories.

Budget discussions progressed last week with no decisions being made, but the Senate held two days of hearings on several tax cut proposals. These hearings culminated with the Senate leadership laying out a suggestion that tax cuts and debt reduction should not count against the spending cap. The House leadership did not seem to agree with the Senate on this issue immediately either, but it did lay out an interesting opportunity for legislators to consider ways that they could meet several obligations at once with the extra revenue they have this year without having to vote to break the spending cap.

Finally, much attention was on the US Supreme Court which heard the beginning arguments of the King vs. Burwell case. In summary, this critically important case could either reaffirm or discontinue the health insurance subsidies that have helped over a million Texans purchase health insurance this year under the ACA. Most importantly, it shined a light on the opportunities the Texas Legislature has to control its own destiny or be at the mercy of the court. A special thank you to State Representative Chris Turner  who has developed HBs 817 and 818 which would facilitate a state-based exchange and thereby protect the coverage subsidies that so many Texans need to maintain their coverage. We are not optimistic that either of these bills will make it to the Governor’s desk for signature, but it is good to know that there are members of the Legislature that see the challenge and are responding to it.

Now that the introductory committee hearings have all been completed and they are all comfortably staffed and operational, we are expecting substantive bills and decisions to come into focus. Considering we are eight weeks into a twenty week session, things will start to happen quickly.

Spotlight at the Capitol Squarely on the Budget

The main focus at the State Capitol right now is the state budget.  Recently the US Secretary of the Treasury, Jacob Lew astutely described the budget process in saying, “The budget is not just a collection of numbers, but an expression of our values and aspirations.” Every two years in Texas, our elected Legislature holds public hearings in Austin to listen to all of the agencies and interest groups that have some role in showing where Texas expresses its values and aspirations through its budget. If you have several days to study it, click here to see the basic budget documents and related presentations from the Legislative Budget Board: LBB.

It is a huge budget by most people’s standards, authorizing state spending for the next two years with a revenue estimate set by the Texas Comptroller of Public Accounts at $113 Billion in general funds. With additional federal funds and dedicated funds, the total is somewhere in the range of $205-210 Billion. Of course, while this number is big, remember that this budget will impact approximately 27 million people who call Texas home. When the Senate Finance Committee and House Appropriations Committee finish their hearings over the next couple of weeks, they will have listened to presentations about almost every dollar in that budget.

To complicate matters, most of the future revenue and expenditures are very difficult to predict over the course of the coming two years. If the economy continues to be strong, there could be less demand on Medicaid and there will be more sales tax revenue. If the economy goes south, it could be a double whammy by increasing demand for support services while reducing funding. Additionally, the state has an obligation to pay for part of education based on attendance, and estimating the number of children in public schools across this state has traditionally been difficult to correctly hit. These uncertainties explain why every two years the Legislature either is looking at a fairly substantive deficit or surplus. Fortunately this year, they are sitting on a nice sizeable surplus. Which brings us to the big question: when you have a budget surplus in Texas, what is the best way to budget?

In an effort to express Texas’ values and aspirations, there have been numerous recommendations on what to do this year. The discussions have included increasing funding for border security, provide for tax cuts, restoring funding to education from cuts made in 2011, appropriately funding health and human services in Texas, increasing funding for higher education, fixing several budget gimmicks used in previous sessions, and numerous others. At this point, it is tough to see how these competing interests will find common ground as there has only been listening and discussing things in general rather than in specifics. We will know more as the committees start making decisions on the different sections of the budget, and as that happens we will keep you informed. The Alliance is actively communicating with the members of these committees about the importance of health and human services funding, and we talk daily about the impact that these funds have in our region. We collaborate with the efforts of our statewide organizations as well as other Houston groups like One Voice and many other HCHA Members. Most importantly, this is not about just numbers as much as it is an expression of our values and aspirations: improving the health of our citizens and the systems that deliver health care to the sick and injured in our region.

Focusing on the Fundamental Challenge: Texans Lacking Health Insurance

For months in Austin and across Texas, several different advocacy groups and a few legislators have been calling for Medicaid Expansion utilizing the Affordable Care Act (ACA); additional voices support the effort but call for an alternative that achieves coverage expansion in a Texas specific manner. On the other side, conservative think tanks have been posting up stories and articles opposing any form of Medicaid or coverage expansion that embraces the ACA (short of some sort of undetermined block grant). The arguments move from policy to financial to philosophical to political and everything in between.

In the coming weeks and months, it is expected that the debate will include the challenges of renewing the 1115 waiver in Texas that has increased mental health services as well as improving numerous other points of needed access to health services. Unfortunately, it would seem that at the moment, the leaders of Texas would prefer discussing anything other than the fundamental components of this challenge.

What has been lost in this debate is the actual problem that has been a challenge to the healthcare systems in Texas (as well as the country) for decades: people who lack health coverage still get sick and hurt, and as a society we support delivering care to those in need regardless of the ability to pay. In fact, President Ronald Reagan signed the law that mandates care back in 1986 (via emergency facilities in hospitals), and the federal government has been holding hospitals accountable to that mandate ever since.

A direct payment for the cost of delivering this care was not included in that act or subsequent acts of Congress, so hospitals (and communities) have created cost-shifting mechanisms to cover this uncompensated care, including pursuing special funds from the federal government to help offset the costs. With the passage of the ACA in 2010, Congress and President Obama called for a change in this uncompensated system by significantly reducing the number of uninsured, but the implementation of that law has been a challenge from the start.

We are not going to begin defending or critiquing the ACA, but with this change in law, the challenge of paying for the care of people who lack health coverage is shifting. The tools and mechanisms that have held health care delivery systems together, including those in Houston, can’t address the current situation. As the Harris County Healthcare Alliance, we are working to encourage an open and collaborative conversation about the best way to move forward, but we must first gain consensus from the leaders that indeed this challenge is the one we are working to solve: finding the most effective and efficient way to provide healthcare to Texans who are sick or hurt and have no health insurance coverage. If we can encourage leaders to agree on the problem, we are at least 80% of the way to finding a solution that is palatable to all Texans.

The Alliance will be working to build a consensus to make the case that this needs to be the focus of the discussions as the Legislature continues its work. We will keep you posted on how you can help. Stay tuned!