NACo Response to Senate on Health Coverage



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May 22, 2009

The Honorable Max Baucus The Honorable Chuck Grassley

Chairman, Committee on Finance Ranking Member, Committee on Finance

United States Senate United States Senate

Washington, DC 20510 Washington, DC 20510

Sent Via Email

Chairman Baucus and Senator Grassley:

The National Association of Counties (NACo) is pleased to submit the following comments in response to the Senate Finance Committee’s May 11th policy options paper entitled “Expanding Health Care Coverage: Proposals to Provide Affordable Coverage to All Americans.”

NACo is the only national organization that represents county governments in the United States. Founded in 1935, NACo provides essential services to the nation’s 3,068 counties. NACo advances issues with a unified voice before the federal government, improves the public's understanding of county government, assists counties in finding and sharing innovative solutions through education and research, and provides value-added services to save counties and taxpayers money.

As you know, America’s county governments deliver physical and behavioral health care directly through public hospitals, clinics, nursing homes and other settings, as well as protect the public’s health through local health departments. Counties also contribute to the non-federal share for certain Medicaid services. In short, not only are county revenues and the services they support a critical component in the states’ health systems for our most at-risk residents, county agencies are at the front lines to protect all Americans from injuries and disease, including responding to the recent H1N1 swine flu outbreak.

NACo applauds you, the Committee and your dedicated staff for working together through such an open process to develop policy options for providing quality, affordable health care coverage to all Americans. NACo and county officials across the country look forward to continuing to work together to further refine and improve the proposals in the days and weeks ahead.

Public Health Insurance Option (p. 13): While our members have not yet taken a position on the details of a public plan, we support the concept, based in large measure, on the experience of some counties with county-based Medicaid managed care organizations. Given the high rates of individuals without any public or private health insurance and the inability of the private market to adjust and expand insurance coverage, we have seen the capacity of a public plan option to provide another mechanism to reduce the numbers of uninsured who are ultimately served and paid for by counties. With a well designed public plan, in concert with other options proposed,

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counties may well see a decrease in the numbers of the medically indigent and an increase in positive health outcomes in our low income populations.

Role of Public Programs: Medicaid (p.14): Maintaining and building upon the existing Medicaid program makes sense when addressing a portion of the uninsured population. NACo supports raising the income eligibility thresholds and eliminating the categorical eligibility restrictions. Those provisions are not only important methods for increasing coverage, but they are even more critical if the Committee adopts the proposed option to eliminate a state’s flexibility in crafting income disregards.

This approach, however, must consider the financial ability of states and counties to administer it. We are pleased to see the Committee option to extend full federal financial participation through federal fiscal year 2015 for benefits provided to the new Medicaid participants who are part of the expanded coverage group. Under this option, the enhanced federal financial participation (FFP) would decease 20 percent a year thereafter, until it reaches the normal FMAP rate.

Since this would be a new unfunded mandate for new populations, we propose that all states be reimbursed during the FFP phase-down at the same FMAP percentage rate. We would also propose that a “pass through” provision like the one included in the American Recovery and Reinvestment Act (ARRA) be included, such that if states require counties to contribute to the non-federal share of Medicaid, that they be required to pass a commensurate percentage of the enhanced FFP through to those counties.

The financing proposal, however, does not address the increased administrative costs counties and states will incur in making eligibility determinations for the new populations under the expansion. The increased costs of operating an expanded Medicaid program will result in a direct cost shift to counties if there is no federal increase in administrative funding similar to the option described for benefits.

Options for Medicaid Coverage (p. 16): The paper provides a number of options for Medicaid-eligible individuals. NACo believes that the Medicaid program should be strengthened and expanded as the foundation for providing coverage for all. We have not taken a position at this stage on any of the options or the variations within each. We do, however, urge that any option considered ensure that the most at-risk populations, including persons with mental or physical disabilities, dual eligibles, seniors and other special needs populations continue to have access to Medicaid benefits such as EPSDT, transportation and other wrap-around services. Without those services and some out-of-pocket cost sharing protections, counties will do their best to serve these vulnerable populations using a patchwork of underfunded programs.

Enrollment and Retention Simplification (p.23): We strongly support the proposal to eliminate the state option to conduct face-to-face interviews when determining Medicaid eligibility. We also support the additional options to implement 12-month continuous eligibility, establishment of a Medicaid enrollment site and allowing states to expanding the types of venues used to enroll and re-determine eligibility. Without these streamlining provisions, some individuals will receive delayed care or none at all. Under this proposal, we also support the option for states to waive the five year ban on coverage of non-pregnant, documented immigrants.

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Automatic Countercyclical Stabilizer (p. 31): We support the concept of providing an automatic increase in the Medicaid FMAP during economic downturns. The recent infusion of funds under ARRA is helping to stabilize our programs.

Given past economic trends, however, we question the rationale for requiring 23 states to exceed a certain threshold of economic distress. Past downturns have affected regions of the country or individual states. Consequently, we commend the California State Association of Counties proposal that an increased FMAP take effect in a quarter when a state’s unemployment rate exceeds a certain level and/or its unemployment rate is a certain percentage higher than the national average and its normal FMAP is less than the median FMAP for all states. This measure or something similar would be more responsive than having a countercyclical stabilizer which only becomes effective when nearly half the states are in economic distress.

Medicaid Disproportionate Share Hospital (DSH) Payments (p. 32): County hospitals and health care safety net systems depend upon DSH as a key source of financing services to Medicaid and uninsured populations. These payments are especially critical to the hospitals in counties with high percentages of immigrant residents, both documented and undocumented.

DSH must be protected until universal health access and coverage is achieved.

Prevention and Wellness in Medicaid (p. 46): Given the importance of preventing illness and maintaining wellness, we support the federal incentive of a one percentage point increase in its FMAP for states that opt to provide all screening and preventive services approved by the United States Preventive Services Task Force and immunizations recommended by the Advisory Committee on Immunization practices.

“RightChoices” Grants (p. 47): Until insurance options are available through the Health Insurance Exchange, we also support the option to provide annual capped grants to states to provide access to certain evidence-based primary preventive services, including but not limited to: tobacco sue screening; flu shots; and hypertension screening. We would urge, however, that counties willing to provide such services be eligible to apply directly for those grants.

Medicaid Home and Community-Based Services (HCBS) Waivers (p. 49): Under Section 1915© of the Social Security Act, states have the option to seek waivers from HHS to provide services in the community to individuals who would otherwise only receive them through institutional settings. Persons with chronic mental illness, persons with developmental disabilities persons 65 years of age or older or those with HIV/AIDS are among the populations eligible for HCBS-type services.

In the 2005 Deficit Reduction Act, additional options were provided under Section 1915 (i) to states through a state plan amendment. We support the Committee’s proposal to provide states with additional flexibility to seek approval from HHS to offer additional services under Section 1915 (i) that are not otherwise enumerated under Section 1915 ©. As noted in the Committee’s paper, Section 1915 (i) does not have the cost-neutrality provision required in 1915 ©. The option proposed will also enable individuals to benefit and enroll in more than one Medicaid waiver.

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Elimination of Five-Year Waiting Period for Non-Pregnant Adults (p. 60): NACo strongly supports the Committee option to permit states to add non-pregnant adults who have been lawfully present in the United States for less than five years. The option is consistent with the provision in the recent reauthorization of the State Children’s Health insurance Program permitting states to lift the five-year ban for Medicaid or SCHIP coverage to pregnant women and children lawfully residing in the United States.

Thank you for this opportunity to provide the views of America’s counties. If you have questions about our positions, please contact Paul Beddoe, Associate Legislative Director for Health Policy at (202) 942-4234 or pbeddoe@.

Sincerely,

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Larry E. Naake

Executive Director

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