States and Medicaid Costs

Posted on February 4, 2011 by townsend

• Crushed by Medicaid costs, states expand managed care, By Christine Vestal, February 4, 2011, Stateline.org: “Last week, Illinois Governor Pat Quinn signed a health care reform bill that will dramatically change the way many Medicaid patients receive care. The bill aims to push half of Illinois’ Medicaid caseload into the hands of managed care organizations by 2015. Illinois has a long way to go to reach that goal: Only 8 percent of Medicaid patients in the state receive care this way now. When he signed the bill, Quinn promised the reforms would reduce the state’s Medicaid costs by as much as $774 million over the next five years. The savings is supposed to come from shifting from a system in which the Illinois Medicaid program generally pays doctors for each service they provide, to one where the state pays insurers a set rate per year for each patient. Quinn also said Medicaid patients will see their health care services improve because insurers would be responsible for more carefully coordinating patient care to reduce avoidable hospitalizations and worsening of chronic conditions. Illinois is late to the managed care phenomenon – on average, states already have moved 46 percent of their Medicaid caseloads into managed care. But in a year of tight budgets and rising health care costs, Illinois is only one of many states turning to the managed care model to squeeze savings out of Medicaid, which now consumes 22 percent of state budgets. This year, at least a dozen states are expanding managed care for Medicaid, the state-run health insurance program for low income children, pregnant women, the disabled and frail elders…”
• Governors get advice for saving on Medicaid, By Robert Pear, February 3, 2011, New York Times: “Fearing wholesale cuts in Medicaid by states with severe budget problems, the Obama administration told governors on Thursday how they could save money by selectively and judiciously reducing benefits, curbing overuse of costly prescription drugs and attacking fraud. However, the administration refused to say whether it would allow states to adopt stricter eligibility standards that would, in effect, throw low-income people off the Medicaid rolls and eliminate their insurance coverage. Kathleen Sebelius, the secretary of health and human services, said she was still studying that question. Governors said the ideas, though constructive, were not nearly enough. They said they wanted waivers of some federal requirements and relief from Congress, and they noted that the new health care law would greatly increase Medicaid rolls in 2014…”