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Congressional Action Threatens The Medicaid Program - Again

June 28, 1996

The Republican leadership has not given up on their plans to dismantle key entitlement programs like welfare and medicaid to finance deficit reduction and to use these vital programs as weapons in the 1996 election campaign against President Clinton and other Congressional democrats. They seem determined to send Clinton another welfare bill and many are equally determined to respond to the governors by block granting the Medicaid program. Time is very short in this legislative session but the Republican leadership will have one more opportunity to attack these programs when they come back from the 4th of July recess on July 8th. It is critical that we join other affected communities of senior citizens, women and children and people with disabilities to defeat legislation to destroy the Medicaid program.

Status Of Medicaid Legislation

Last month, the Republican leadership in the House and the Senate introduced the Medicaid Restructuring Act of 1996 (H.R. 3507, S. 1795). These bill would end the guarantee to health care under Medicaid which over half of all adults with HIV/AIDS and 90 percent of all children depend upon. (see attached Q and A for details.) This bill has moved through House and Senate committees and will reach the House and Senate floors in July -- either in legislation which combines Medicaid with welfare reform or as a single bill in its own right.

The Administration has announced its intention to veto the Medicaid bill. Their position on welfare reform is less certain. Despite the promised veto, we must weigh in strongly against this legislation as an AIDS community, both to ensure its defeat and to create a political climate which will allow us to preserve this program when Congress attempts to address it again when the next Congress convenes in January, 1997.

AIDS Action Activities

AIDS Action continues to work with a coalition of consumer, senior, disability and women/children organizations to analyze the impact of these measures and to convey our strong opposition to the Congress, the Administration and the press. We have developed comprehensive press packets on Medicaid which are being mailed this week to reporters and editorial boards in all 50 states.

AIDS Action:

Call your Senators and Representatives and urge them to reject the GOP Medicaid bill. Tell them it would:

  1. eliminate the guarantee to health care services to people living with HIV/AIDS
  2. allow states authority to define disability for eligibility purposes
  3. give states incentives to restrict eligibility and benefits by cutting $72 billion in federal Medicaid funding and more than $250 billion federal and state cuts over six years.

Call President Clinton and tell him to stand firm on his promise to protect the Medicaid guarantee. Tell him to veto Medicaid restructuring legislation that eliminates the guarantee.

Join other Medicaid advocates in doing press around this bill. If you would like additional press materials, call Kevin Mercuri at (202) 986-1300 ext. 3065 or Kurt Schade at (202) 986-1300 ext 3060.

[Paid for with contributions from AIDS Action Network Members]

HIV/AIDS And The Gop Medicaid Bill

Questions and Answers

Does the GOP Medicaid bill protect coverage for those who are currently eligible for Medicaid and for people who might become eligible in the future?

NO. The bill ends the individual guarantee to health care coverage currently provided by repealing Title XIX of the Social Security Act -- the federal Medicaid program. This bill eliminates the federal protections and regulations that currently constitute the Medicaid entitlement. Current beneficiaries, whether poor families with children, low-income seniors, or people with disabilities, would not be guaranteed health services because states would be allowed unprecedented authority to determine who is eligible for benefits, what benefits, and at what level. Under the bill, states would have the authority to define disability for the purpose of Medicaid eligibility. Further, states could also set additional income, asset, or residency requirements that would effectively deny or delay coverage to currently eligible individuals. People living with HIV/AIDS who meet current Medicaid eligibility standards could find themselves denied eligibility because of a restricted definition of disability, or changed income or residency requirements. Access to the "new" Medicaid program for people with AIDS could vary dramatically state by state.

Does the GOP bill mandate a comprehensive benefit package?

NO. The GOP bill gives states the discretion to limit or deny benefits solely on the basis of diagnosis or illness and could set arbitrary limits on physician visits, long term care, hospital stays, or prescription drugs, without regard to what is medically necessary or appropriate to treat the condition. States could offer different benefits to different categories of beneficiaries, based on cost and not on medical need; and could offer different benefit packages to Medicaid recipients living in different parts of the state. Individuals living with HIV/AIDS who are deemed eligible for a state's Medicaid program could see benefits restricted on the basis of an HIV diagnosis or be faced with benefits which are so limited that they are unable to get comprehensive health care.

Does the bill protect beneficiaries from being subjected to high out-of-pocket costs for health care services?

NO. States are offered complete discretion in charging premiums and copayments for covered services for mandatory and non-mandatory populations such as the "medically needy". Under current Medicaid law, all cost-sharing must be "nominal," with no cost-sharing for children, pregnant women, nursing home residents, and emergency services. The GOP bill eliminates this protection, allowing states to effectively deny coverage by pricing benefits and services out of reach. Under H.R. 3507 and S. 1785, states are allowed to impose premiums on pregnant women and children in families with incomes below 100% of the poverty level, and must limit their cost-sharing for preventive and primary services to nominal levels.

Under the version of the bill passed by the House Commerce Committee on June 13, state are allowed to impose "nominal" cost-sharing on all populations and for all services. For mandatory populations, "nominal" cost-sharing is defined as not exceeding 6% of the cost of the services; for non-mandatory populations, it's the average cost-sharing for those services charged by HMOs in the state.

In addition, non-mandatory populations can be charged premiums, equal to 2% of the individual's or family's gross income. Even "nominal" cost-sharing could be challenging to individuals with multiple health care needs or low incomes.

The bill further allows states to impose unlimited cost sharing to "discourage the inappropriate use of emergency medical services" and to "encourage the use of primary and preventative care and discourage unnecessary or less economical care". Cost sharing can be an insurmountable barrier to adequate health care for individuals with complex and multiple health needs like individuals and families living with HIV disease.

Does the bill protect the ability of Medicaid beneficiaries to choose their providers with specialized expertise in the treatment of HIV/AIDS?

NO. The GOP bill would allow states to force Medicaid beneficiaries into managed care arrangements with no minimum quality protections and without requiring managed care plans to demonstrate their ability to provide services for chronically ill populations, including people living with HIV/AIDS. The bill would eliminate the current federal Medicaid waiver process that allows states to impose mandatory managed care on Medicaid populations with federal oversight and approval Ä a process which is responsive to the concerns of consumer advocacy groups aimed at assuring quality care to all Medicaid beneficiaries, including individuals with high cost and complex health care needs. A state may also require cost sharing in managed care plans for a beneficiary to access specialized, "less economical care" -- creating a financial barrier to the specialized expertise required by people living with HIV/AIDS.

Does the GOP bill ensure the right of beneficiaries to challenge states in federal court if the state fails to deliver high quality medically necessary services to all Medicaid beneficiaries?

NO. The GOP bill eliminates current mechanisms that allow individuals and health care providers to utilize the federal justice system to hold states accountable for complying with Medicaid law. Health care providers would have no recourse under the courts and individuals would only be allowed to seek a claim against a state for the denial of benefits. Individuals would first be required to exhaust a state administrative appeals process followed by judicial review in state court. If these avenues fail, individuals could petition the U.S. Supreme Court or request the Secretary of Health and Human Services to bring action in federal court on their behalf. This bureaucratic process offers little promise of protecting the rights of health care consumers by holding states accountable.

In addition, since the GOP bill limits individual claims to the denial of benefits, individuals would not be able to challenge eligibility, the quality of health care, or other grievances. The federal right of action has been a critical tool for people living with HIV/AIDS and their advocates to ensure the availability of all medically necessary care, including access to life-prolonging AIDS drugs.

Does the GOP bill lay out a funding mechanism that would ensure that states can cover the costs associated with continuing growth in their Medicaid eligible populations including increases in the numbers of individuals and families living with HIV/AIDS?

NO. States would receive a fixed amount under the block grant. That fixed amount, plus any supplemental funding for undocumented and Native American populations constitute the base allocation. In addition, the formula the determines the base allocation is a set formula that does little to respond to actual state need. The funding formula would produce widely varied effects in different states. Furthermore, over a 6 year period, the funding formula would, on average, result in a 9 percent loss in federal funding to states.

However, the following states would face cuts of 20 percent or more: District of Columbia, Georgia, Louisiana, Maine, Minnesota, and West Virginia.

In addition to the base allocation which includes 96% of the federal funding available to the program to the states, the bill establishes an "umbrella" fund to defray, on a one-time basis only, the cost of certain unanticipated enrollment growth. The "umbrella" funds would only cover the first year costs of additional enrollment, not the continuing costs in years after that. States would be responsible for covering additional costs of increased caseload.

Since the umbrella fund would be inadequate to cover the actual need, states would have incentives to cut program costs by restricting eligibility categories and limiting benefits and services. Under what is ostensibly a block grant funding mechanism, even individuals with HIV/AIDS who meet state eligibility criteria could be denied access to Medicaid if the state has exhausted its annual Medicaid allocation.

Does the GOP bill require states to continue to maintain support for their current expenditures on care for beneficiaries?

NO. The GOP bill caps federal Medicaid funding and reduces state "matching" funding requirements. The combined effect of federal and state funding reductions could decrease Medicaid funding nationally by over $250 billion over six years. The federal cap would be set below current federal Medicaid expenditures under current law. Therefore, the amount of "matching" funds that states would need to contribute in order to receive the maximum federal funding allotment would be less than they now do. States would be able to reduce their state portion of Medicaid support without affecting the level of federal funds they receive. Without an adequate funding base, the health care of 37 million Americans including over 50 percent of adults and 90 percent of children living with HIV/AIDS will be jeopardized.

For more information, contact:
Tracy Mickens-Hundley, ext. 3053
AIDS Action Council
1875 Connecticut Avenue NW #700
Washington DC 20009
202-986-1345 (fax)
202-332-9614 (tty)

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This article was provided by AIDS Action Council.
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