Failure of health care plan isn’t an end to scrutiny over Medicaid

March 26--House Republicans' health care plan may have been pulled Friday after failing to generate enough support, but scrutiny over health care and Medicaid spending is almost sure to persist.

Under the House GOP's defeated health care plan, the Medicaid expansion included in Obamacare would be phased out by 2020. The bill would also set a per-capita spending cap in federal Medicaid funding for states, and allow states to receive the funding in block grants.

Whether these proposals are a part of future GOP attempts at a health care overhaul remains to be seen.

Supporters say these moves would reign in out-of-control Medicaid spending, while opponents blast the changes they say will deprive millions of low-income Americans of health insurance.

Meanwhile, in New York, much attention was focused on the fight between Gov. Andrew Cuomo and Rep. Chris Collins, who introduced a proposal to bar federal reimbursements of Medicaid funds raised from upstate counties.

The amendment immediately drew praise from Republican House representatives, state lawmakers and county and municipal officials who have long railed against unfunded mandates they say have pushed local property tax rates to among the highest in the nation.

But critics say the amendment, which would cost the state $2.3 billion in Medicaid funding, would shutter hospitals and other healthcare providers, gut care for the elderly, poor and people with disabilities and possibly lead to higher costs in the long run.

Cuomo threatened Thursday to sue over the "unconstitutional" amendment.

PROPERTY TAXES

If enacted, Collins' amendment may result in significant tax breaks for Niagara County homeowners -- assuming, of course, New York state does not raise other taxes, such as sales or income tax, to cover the shortfall.

According to a Niagara County Legislature budget presentation, Medicaid spending accounted for $43.73 million of the county's $77.59 million tax levy, or about 56 percent.

A home assessed at $150,000 that pays $1,090 in county property taxes would see annual savings of about $610. Homeowners' remaining property taxes, which are collected by school districts and municipalities, would likely not be affected.

"If the Medicaid obligation is removed from the counties, what will be the impact be? In the absence of any new unfunded mandates, county taxpayers can expect a significant reduction in their county property tax bill," County Manager Rick Updegrove said.

Updegrove added that New York is the only state to place such a high Medicaid burden on its counties, which have driven upstate property taxes to among the highest in the nation.

That is why, as the Legislature's majority leader, Updegrove sponsored resolutions asking the state to allow counties to decide which Medicaid services to provide.

Currently, New York state provides all of the non-mandated Medicaid services, which includes prescription drugs, various therapeutic and preventative services, in-home care and more. The extensiveness of the state's Medicaid coverage has driven its costs to second-highest in the nation, after California.

According to figures from Collins' office, New York spends 44 percent more per Medicaid beneficiary than the national average: $10,426 vs. $7,236. All told, New York is second only to Massachusetts in Medicaid spending per beneficiary.

Legislator Richard Andres, R-North Tonawanda, echoed Updegrove's sentiments, saying the state should make some "hard decisions" about its Medicaid programs rather than pass the cost along to its counties.

"There's a laundry list of things that (the state) could offer, and states pick and choose and kind of balance their budgets based on what they can afford," Andres, chairman of the community service committee, said. "Our state chose essentially all the options and passed the cost to us."

But Cuomo and his allies point out the state has already taken measures to reduce counties' Medicaid burden. In 2011, after hearing complaints from counties about rising Medicaid costs, New York agreed to absorb all Medicaid cost increases. That has led to the counties' share of Medicaid costs dropping from 25 to about 13 percent, said Lt. Gov. Kathy Hochul.

Hochul also said that the state and counties had shared Medicaid equally -- 25 percent each; with the federal government picking up the remaining half -- since 1965. That same year, the state allowed counties to collect sales tax -- a benefit many counties throughout the nation don't enjoy. Cuomo said upstate counties receive a higher percent of sales tax than any others in the nation.

"The state is not asking the counties to do anything more than we have done ourselves. In fact, the state has done far more," Hochul said.

The amendment would exacerbate the cuts facing the state's Medicaid program under the GOP's healthcare bill, critics contend. Cuomo said the proposed bill would cost the state $4.6 billion over the next four years, and $2.4 billion per year after fiscal year 2020. "It is impossible for the state to pay and close that gap," he said.

Though proponents of Collins' amendment complain about the state's expensive Medicaid program, many have not specified which non-mandated services should be cut. Neither have many proponents specified which recipients -- able-bodied, working-age adults above the poverty line, for example -- should no longer be covered.

Collins' statements frequently criticizes the state for its "out of control" Medicaid spending, yet he has also suggested the state should cover the $2.3 billion shortfall elsewhere. The state is preparing a 2018 budget of more than $150 billion.

"As I have said before, if this governor can't find 1.5 percent to save in his budget, I am more than willing to find it for him," Collins said.

NON-MANDATED SERVICES

Advocates of people with disabilities and other Medicaid recipients insist that many non-mandated services are, in fact, vital to individuals' health and well-being.

The laundry list of non-mandated services includes prescription and nonprescription drugs, diagnosis, screening, preventive and rehabilitative services; dental care, eye care, including eyeglasses; prosthetics and orthotics, clinical psychologist services, inpatient psychiatric care for those under 21 and over 65, transportation to covered services, personal care services, case management, hospice care and a few others.

Todd Vaarwerk, director of advocacy and public policy for WNY Independent Living, said many people with disabilities depend on these services, such as personal care and transportation to appointments.

"Congress should be looking at why these services are considered optional," he said.

Vaarwerk, like a majority of employees and directors at WNYIL, lives with a disability himself; he has cerebral palsy and uses a wheelchair.

Without the 17 hours of home health care he receives -- a roughly $15,000 annual expense -- he would not be able to work and would be totally reliant on Medicaid and Social Security. What's more, he said, he likely would suffer an injury eventually, leading to surgery and perhaps rehabilitation that might cost far more.

Meanwhile, of course, there would also be the incalculable cost to his diminished quality of life.

"We finally got folks in Medicaid to realize you spend less by keeping people at home than you would by putting them in a long-term care facility," Vaarwerk said.

Karla Thomas, outreach director at the Community Health Center of Buffalo's Lockport location, shared Vaarwerk's concerns. She said that before home care and transportation were covered under Medicaid, far more elderly and people with disabilities were left in long-term care facilities. And before services like podiatry (now a mandated service) were covered, poor recipients with diabetes were more likely to end up needing their foot amputated.

"We realized preventative care works. Rather than cut off a person's foot, you could give them podiatry care," Thomas said.

Vaarwerk doubts Medicaid funding could adequately cover these critical preventative and quality-of-life services under the House bill, much less with Collins' amendment.

"Tens of thousands across the state will lose healthcare. That's the bottom line," Thomas said.

However, critics of current Medicaid spending point out the program also covers millions of able-bodied, working-age adults, without letting states impose work requirements. The GOP healthcare bill would give states the option of imposing work requirements on non-disabled and non-elderly individuals.

"The work requirements are important. They're something that is restorative to people's self-worth ... sense of themselves, about working when they're able to," Department of Health and Human Services Secretary Tom Price said March 19 on ABC's 'This Week.' "We believe it's important for folks to have a job, that they contribute not just to society but they contribute to their own ... well-being."

To the perception that Medicaid recipients are often unwilling to work, Thomas said, "That is a terrible misunderstanding. It's a hand-up, not a hand-out."

Vaarwerk pointed out that often, these non-mandated services are essential to providing even able-bodied adults with work opportunities.

"If you are denying a child eyeglasses because it's optional, how are they going to get an education?" he said.

COST TO CARE PROVIDERS

Critics of the House health care bill say that if Medicaid funds are reduced, hospitals and nursing homes will go deeper into the red.

"The cut is so severe that the majority of hospitals, nursing homes and assisted living facilities located in Upstate New York and on Long Island would be devastated," Cuomo said.

Eight hospitals in Collins' 27th Congressional District would stand to lose $7.8 million annually, and more than 30 nursing homes would altogether lose more than $35 million per year, according to an estimate by the state Department of Health provided by Cuomo. The estimate states Mount St. Mary's Hospital in Lewiston alone would see revenue drop by $1.26 million per year.

In a conference call with reporters, Cuomo said hospitals have already tightened their belts as a result of his office's push to cap Medicaid spending at the consumer price index -- about 3 or 4 percent. As a result, the state's hospitals have the lowest operating margins in the country.

"They will tell you, 'We are already down to the bone,'" Cuomo said.

Because hospitals are often among the largest employers in a community, opponents are concerned the changes could cause major harm to the region's economies.

"If we undermine the healthcare industry, we undermine the economy," said Bea Grause, president of the Health Care Association of New York State.

Collins dismissed the estimates from Cuomo as an Albany scare-tactic. "Governor Cuomo and his sidekick are using doomsday predictions to scare everyday New Yorkers into allowing Albany to continue taxing them to death," Collins said.

Several local hospitals either declined to comment or did not return calls seeking comment.

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