Medicaid reform goes public

BOISE – Idaho Gov. Dirk Kempthorne wants public input on his sweeping Medicaid reform initiative.

“It needs time for people to be able to hear about it, discuss it, talk about it,” a clearly enthusiastic Kempthorne said Tuesday as he released a “concept paper” about his reform plan titled “Modernize Medicaid: Prevention, Wellness, Responsibility.”

Added Kempthorne’s policy adviser, David Lehman, “If there are some things that we’ve missed, we want to know about it. If there are things that would cause harm to individuals, we want to know about it.”

Kempthorne said the reform plan will be a key part of his State of the State message to the Legislature in January, but he wanted to get the plan out to the public now so people have a chance to help him fine-tune it. The plan would vastly simplify Medicaid in Idaho by dividing the joint state-federal health care program for the poor and disabled into three separate programs with different goals, each serving a different population: Healthy children and adults, the disabled, and the elderly. Each patient would have an initial health assessment to determine medical needs.

The hope is to better serve each group, while slowing the runaway growth in costs that has marked Medicaid in all states in recent years. The current Medicaid program, Kempthorne said, is “one size fits all, whether you are 7 years of age or 70.”

The new plan would focus on wellness and prevention for healthy children and working-age adults; on empowering patients to manage their own care and removing obstacles to work for the disabled; and on increasing non-public financing options for long-term care for the elderly and promoting policies to keep them out of nursing homes as long as possible.

Changes the plan would bring about include ending a requirement that parents drop all health care coverage for their children for a period of time before they can be eligible for help from Medicaid, and eliminating a requirement that seniors reach a point of deterioration where they need nursing home care before Medicaid can help at all. Both, the governor said, lead to poorer care and higher costs.

“We can slow the growth of Medicaid expenditures and improve the outcomes for individuals who are on the program,” Kempthorne said.

The plan relies on federal authorities’ agreeing to issue Idaho an unprecedented blanket waiver from a slew of federal rules. The governor met last month with U.S. Health and Human Services Secretary Michael Leavitt, and he’s been receptive, Kempthorne said.

Talks continue between state and federal authorities, but the governor said he’s hoping the waiver can be granted by spring and the new Medicaid program can start July 1.

Though the program isn’t projected to cost any less in its first year, the hope is that by providing better care, prevention and incentives, it will slow the growth in costs over the long term.

Idaho is spending about $330 million on Medicaid this year, about 15 percent of its general fund budget. But if costs continue to escalate as they have for the past decade, Medicaid would cost Idaho $1.9 billion by the year 2021 and surpass education spending, which long has been the state’s top expenditure. The state spends nearly half its general fund budget on public schools – nearly $1 billion.

The current growth in Medicaid is unsustainable, Kempthorne said – and federal authorities know it. That’s why he’s confident Idaho will get the federal waiver.

“This is not going to break rules,” he said. “This is going to fulfill what the intent of the rules is, but it’s going to use innovation. … Why would they do this? Because absent something like this, the system will fail – it will fail.”

David Rogers, Idaho’s Medicaid director, said, “They’ve been very encouraging. I think they’re looking for solutions, and I think they realize like we do that they are going to have to come from the states.”

The numerous federal regulations contained within the current Medicaid program, Rogers said, “sometimes … just don’t make a lot of sense or help us manage the program.”

Lehman said just last week, the federal director of Medicaid cited Idaho in a Washington, D.C., speech as one of the states with progressive ideas on solving its Medicaid problems.

Kempthorne, who begins his final year in office in January, said the program ties into the “Generation of the Child” theme he’s touted since he first was elected in 1998. With the changes in Medicaid, he said, “I believe we’re going to have a much healthier generation of children,” who then will grow up to be healthier adults and then healthier senior citizens.