Not Convinced the State Will Say Anything to Reduce Medicaid Spending? Read This.

Florida has now submitted its request to the federal government seeking approval of the statewide Medicaid managed care experiment authorized by the Legislature last spring.

On one hand, the proposal simply describes how the State intends to implement the legislation and what federal rules would need to be waived for that to occur.  On the other hand, the proposal clearly demonstrates the State’s true objective, and it has nothing to do with protecting Medicaid. These documents provide the latest confirmation that leaders are willing to say (or not say) almost anything to advance their agenda. And they’re counting on the fact that the poorest and sickest won’t know until it’s too late.

In addition to the managed care experiment, the State’s request includes a half dozen additional measures so extreme and punitive they face certain rejection in their current form. Recognizing this reality, the State submitted those separately so they could be readily discarded without slowing down the review process. Yet that didn’t stop the State from defending these measures with more reckless abandon than a used-car salesman desperate to unload a quota of lemons.

Rewriting the Truth at Patients’ Expense: A Case Study

Let’s look more closely at just one of these measures: proposed changes to the Medically Needy program. The program covers individuals with catastrophic medical expenses but have incomes above the Medicaid eligibility limit. The Medically Needy include, for example, organ transplant patients, under-employed parents with health problems, and people with disabilities with incomes above the SSI payment level.

Currently, Medically Needy patients qualify for Medicaid only during months in which they meet what is called the “share of cost” requirement. Recipients meet share of cost when they owe medical bills that reduce their net income for that month to less than 20% of the poverty level. 

Under the State’s proposal, Medically Needy recipients would be placed in a form of managed care and required to pay monthly premiums in exchange for continuous coverage. Sounds reasonable. Even helpful, right? But read the State’s application very carefully:

The Agency seeks to simplify the enrollment and eligibility determination process and to implement an income-based premium not to exceed the recipient’s share of cost. The objective [is] to provide for more continuous coverage and improved access and coordination.

Continued eligibility and coverage of the Medically Needy population are important objectives…and [this] would provide access to a greater eligibility period for Medicaid.

In all cases, the proposal would apply no more restrictive eligibility policy; and in most cases criteria would be less restrictive, since the proposed premium will be no more than the share of cost.

The extent of the disingenuousness and disregard buried in these statements almost defies description. For starters, State officials know that they must claim that these changes would not restrict eligibility, because otherwise the changes immediately violate federal law. To pitch what the Legislature demanded then, they had to tell a flat-out lie.

Suppose, for example, that a patient has monthly income of $1,000. Under current rules, if she is appropriately billed $800 for eligible medical care, she meets her share of cost without forcing her family to subsist on a third-world income. By contrast, under this “no more restrictive” proposal, the patient must not only directly pay the entire $800 to be eligible, they must pay that amount every month. This will improve access and continuity?!?

Using One Misrepresentation to Justify Another

Of course, the only way the State could possibly justify this would be by portraying Medically Needy recipients as affluent freeloaders. In fact, Senator Joe Negron insisted on changing the name of the Medically Needy program to the “non-poverty medical subsidy.” 

And in her presentation to legislative committees, Florida’s Medicaid Director cited the example of a Medically Needy patient with family income of $5,000 per month. She further testified that average family income is $1,944 per month for disabled recipients and $3,027 for families with children.  

Documents submitted to Washington tell a different story, however. The average income reported for disabled recipients was $899, less than half the amount the Medicaid Director claimed. Fewer than 6% had income at or above the level she cited. Further, their average share of cost was $702. Under this proposal then, a typical Medically Needy recipient would be expected to pay $702 in monthly premiums and live on $187 per month!

For families with children, the State reported average income at $1,055 per month (not $3,027!), along with a $501 share of cost.  However, even that average is skewed by a few middle-income patients.  More than three out of four Medically Needy families live below the poverty level. Yes, the poorest fifth of these would have only a $22 average share of cost, but would have $91 left to live on! Fewer than ½ of one percent have incomes in line with the $5,000 example.

All told, 73% of the people receiving a “non-poverty medical subsidy” live in poverty!  Less than 3% are not considered low-income.

A political agenda is one thing. Grossly misrepresenting who is poor and sick and what you propose to do them in order to advance that agenda is something else. Something shameful.