A proposal to reform Colorado’s Medicaid program sure looks good on paper. But the plan could reduce the state’s eligibility for future federal dollars and weaken a critical safety net for lower-income families.
A panel of state lawmakers is about to vote on the plan, but we urge them to take more time to study the consequences. Most states have opted not to jump into the program, fearing the effect on their budgets.
The goal of Medicaid reform is to deal with rising health care costs and increasing caseloads. Gov. Bill Owens and his Department of Health Care Policy and Financing applied to Washington for a waiver from basic Medicaid rules. That came after several years of budget pressures forced Colorado to cut critical Medicaid programs.
The administration is smart to look for savings. At $3 billion a year Medicaid is the second-biggest item in the state budget and growing. Since 1990, the number of recipients has grown from 203,238 to about 388,600.
On Wednesday, the Joint House and Senate Committee on Health and Human Services is scheduled to vote on the waiver program. If approved, Colorado will be required over the next five years to negotiate a cap on federal funds available for the state’s Medicaid and Children’s Health Plan Plus (CHP+), the insurance program for low-income children. Under Medicaid rules, the federal government matches every dollar spent by the state. Putting a cap on the federal contribution could stress the state budget if the federal negotiated rate were exceeded.
The waiver envisions many benefits, but there are costs, too.
On the plus side, more children would be enrolled in CHP+ and would be eligible for enhanced benefits – the reform plan combines the Medicaid and CHP+ programs and streamlines eligibility; and it would allow for 12-month enrollment in Medicaid instead of monthly eligibility. The Owens administration estimates a five-year savings of $50 million from using a new purchasing strategy and from children going to doctors for preventive care.
The savings assumptions cannot be guaranteed, however, and the plan proposes to be “budget neutral,” which will limit increases in federal funding. It leads us to question how more people can be served without increased spending or sacrificing services. Consumer advocates say that poor adults will lose access to services, though state officials say that’s not the case. It’s essential to sort that out before signing on the dotted line.
Community health clinics that serve uninsured poor families stand to have their reimbursements cut even while hospitals and doctors would get higher reimbursements.
During recent hearings on the plan, consumers, local health care officials, hospitals and doctors said they needed more time to study it. Some experts who’ve studied the proposal say 90 percent of what’s being proposed can be implemented without a waiver. Some lawmakers are planning to introduce bills to bring such efficiencies.
It would be invaluable to develop a more efficient Medicaid program, but a plan that could further restrict the way Colorado serves its poor is premature and needs further study by lawmakers, health officials and county administrators.
