Joint Labor Health committee passes Medicaid expansion bills
– January 14, 2014
By Ron Feemster
The fortunes of Medicaid expansion in Wyoming improved Friday morning after the Joint Labor, Health & Social Services interim committee voted to change its rules. It may seem a small procedural matter, but when the committee voted to advance bills to the legislature with a simple majority vote, it breathed new life into Medicaid bills that looked certain to die in committee.
Under the old rules, Labor Health required both a majority of senators and a majority of representatives on the committee to approve a bill. Had they stuck with this procedure, both the Medicaid Fit bill and the Medicaid Expansion – Insurance Pool bill (a version of the so-called Arkansas plan), would have failed. Two of the four senators present at the meeting voted against each bill. Longtime advocates of Medicaid expansion believed defeat was inevitable when the first day of debate ended on Thursday.
“We just don’t have the votes,” said Dan Perdue, president of the Wyoming Hospital Association Thursday evening.
Perdue’s members, and their Wyoming customers, pay about $200 million in uncompensated care each year, including charity care and bad debt. Hospital administrators believe those costs would go down if Medicaid were expanded to cover low-income adults ineligible for subsidized health insurance under the Affordable Care Act.
“There’s no way the bill has enough Senate votes,” Perdue said. “I make it three to one. Two to two at best.” Sen. Leslie Nutting (R-Cheyenne) was excused from the meeting to deal with a family emergency.
But the next morning the committee changed the rules by a voice vote and kept the bills alive. Even those who expected to vote against the bills in committee said “Aye” in a unanimous voice vote on the rules change.
“I think there is a tremendous amount of interest in this bill – in this whole topic,” Rep. Elaine Harvey (R-Lovell) told her colleagues in the committee room at the Capital on Friday morning. “I think there are two options that could potentially move forward. And I think that it is the responsibility of this committee to move it forward for a full legislative discussion. I would hate to think that 12 people would decide for the whole state to not do Medicaid expansion.”
Medicaid Fit passed 7-5 and the Insurance Pool option advanced on an 8-4 vote. In each case, two senators voted against the bill: Ray Peterson (R-Cowley), and Charles Scott (R-Casper). Bernadine Craft (D-Rock Springs) and James Anderson (R-Casper) voted in favor of both bills.
Voting for both bills were representatives Eric Barlow (R-Gillette), Lee Finer (D-Cheyenne), Matthias Greene (R-Laramie), Mary Throne (D-Cheyenne) and Sue Wilson (R-Cheyenne). Kathy Coleman (R-Sheridan) was not present.
Representatives Norine Kasperik (R-Gillette) and Lloyd Larsen (R-Lander) voted against both bills. Harvey voted against Medicaid Fit but in favor of the Insurance Pool option.
“It’s a big victory,” Perdue said after the votes on Friday morning. “It’s a huge hurdle to get over. But I’m not going to go out and tell everyone we are going to have Medicaid expansion.”
Medicaid Fit, written and championed by Throne, is a modification of traditional Medicaid expansion, which was included in the Affordable Care Act as originally passed by Congress. Until the Supreme Court ruled against it in 2012, all low-income persons not already qualified for Medicaid were to be added to the traditional Medicaid rolls with the federal government picking up nearly all of the cost.
But the court found the penalty for states that did not expand Medicaid too severe. It ruled that that Medicaid enrollment should be optional for each state. The Wyoming State Senate defeated a traditional Medicaid expansion bill by a vote of 22-8 last March.
“The same 22 senators who voted against that bill are still there this year,” said Scott, who moved the bill out of his senate committee with a rare “do not pass” recommendation last session. “I don’t think we could pass traditional Medicaid expansion if we wanted to.”
About half the states in the country have chosen to expand Medicaid. A handful of states, including Arkansas, Iowa and Wisconsin, have tried to expand in a non-traditional way. Both of the bills passed by the committee on Friday are attempts to create a “Wyoming solution” to the expansion issue.
Under Medicaid Fit, the state would offer Medicaid coverage to people with incomes lower than 138 percent of poverty who do not now qualify for Medicaid. (Current rules reserve coverage for children, pregnant or recent mothers, and the blind and disabled.) But unlike current Medicaid recipients, the newly eligible would be obligated to share the cost of their treatment.
Medicaid patients under 100 percent of the Federal Poverty Level could pay a maximum of $4 for outpatient and $75 for inpatient services. Recipients earning between 101 and 138 percent of poverty could pay up to 10 percent of the amount that the government pays for a particular inpatient or outpatient treatment, according to Tom Forslund, director of the state Department of Health, who answered questions posed by committee lawmakers.
Forslund emphasized that Centers for Medicare and Medicaid do not allow a 10 percent payment of the hospital’s charge for the service. Instead, CMS allows the state to charge a recipient 10 percent of what CMS actually pays. In general, Medicaid pays less for a medical procedure than private insurance. Anderson expressed misgivings about requiring a 10 percent coinsurance payment from people who are living just above the poverty line.
Scott, who believes that Medicaid coverage leads to over-utilization of hospital and especially emergency room facilities, refers to Medicaid Fit as “Medicaid Lite.” He authored the Insurance Pool option bill to add incentives to the system to encourage more responsible use of health care options.
Scott’s bill grew out of legislation passed in Arkansas and approved by CMS. It incorporates the basic structure of a bill authored earlier by Harvey, which allowed the state to use the federal Medicaid funds to buy private insurance coverage for the poor.
In Scott’s version, the bill adds small copays, which the insured person could pay out of a health insurance savings account. Most of the money in the account would come from the government, but some would come from small premiums paid by the policy owner.
Although he is the author of the bill, Scott voted against it on Friday. In fact, he argued against his own bill, its precursor by Harvey, and Medicaid Fit.
“One of the bills [Medicaid Fit] is just bad,” Scott told the committee. “The other two are premature at this point.”
Scott says he is reluctant to commit state resources to negotiating an agreement, known as an “1115 Waiver,” with CMS. After attending a meeting with other states, including Missouri and Iowa, sponsored by the Milbank Foundation this fall, Scott concluded that the negotiation might put too great a burden on the Health Department and the governor’s office.
“The only way to do it is with a major expenditure of money and executive branch effort,” Scott told the committee as he urged them to table all the expansion bills. “I think the governor and the Health Department director have to be unified on that. I don’t see that we have that level of support. My instinct is to take all three bills and just lay them on the table.”
Tom Forslund, director of the Wyoming Department of Health, reiterated his willingness to work with lawmakers and the governor, no matter what decision is made in the legislative branch. “We can work with any bill,” he said.
Scott noted that Arkansas and Iowa required the engagement of their governors in negotiations with CMS. Gov. Matt Mead has said that of the five options identified in a Health Department study, he prefers the Medicaid Fit option. But on Friday, Mead said he is still opposed to expanding Medicaid in the state.
“The issue of optional Medicaid expansion is not black and white,” Mead said in a statement. “It is appropriate for the Legislature to move these bills forward to continue to debate what approach is best for Wyoming. I continue to believe that an optional expansion is not in the best interest of Wyoming. The ACA is poor in design and implementation. I point out the problems as the federal government struggles with implementation and it delays certain provisions of the law.”
Progress on healthcare.gov
Predictions of the ACA’s failure may be premature, however. The Department of Health and Human Services reported a dramatic turnaround in the performance of the healthcare.gov marketplace during December.
Only about 137,000 people in the United States purchased health insurance on the exchange in October and November, according to HHS figures released on Monday. Yet, in December, an additional 1.059 million people bought plans through the exchange.
In Wyoming, 3,450 people received coverage by the end of December, or about 4.5 percent of the state’s 85,000 uninsured residents, according to the HHS figures. In Kentucky, the state most often cited as having a successful state exchange, HHS said 33,000 people were covered in the same period. That comes to about 5 percent of the 640,000 residents the state says are uninsured. No state-by-state figures were available on the percentage of previously uninsured people covered under the new law.
Tom Hirsig, Director of the state Department of Insurance, told the Labor Health committee on Thursday that in his view the exchange was functioning well. Hirsig’s most recent figures showed that about 5,000 Wyoming residents had signed up for insurance on the exchange.
Wyoming Life Resource Center
Harvey has tried during recent legislative sessions to reduce high spending on intellectually disabled residents at the Life Resource Center in Lander and increase funding for community-based programs for disabled persons throughout the state.
At the Labor Health meeting in Lander, she presented a bill that would allow the state to sell the extensive campus of the Life Resource Center to a developer, acquire land in the Lander area, and build a smaller facility that would keep jobs in the area, offer quality care, and reduce costs.
Her fellow committee members were having none of it. “Why would we sell a piece of good property?” asked Larsen, who represents Lander. He suggested that other parcels available in Lander might have hidden construction costs due to soil and water issues in Lander valley.
Scott wondered aloud if Harvey’s bill were not a backhanded plan to close the center. Harvey assured him it was not. In the end, the bill did not come to a vote.
“The point of my bill is that it is time to do something,” said Harvey on a break during the debate.
The health department study published in November suggests that while the campus is made up of old buildings in need of expensive maintenance, few alternatives exist besides expensive residential care for WLRC patients. Harvey said it was clear during the meeting that she did not have the votes to pass the bill, but that she wanted the issue in front of the committee and the public.
Money for changes?
The Wyoming Life Resource Center is not the only facility in the state with an aging and expensive campus. In its report on the state’s aging residential health facilities, the health department noted that the State Hospital in Evanston sits atop a seismic zone. Some of its century-old plaster buildings could collapse in an earthquake, according to Thomas P. Whetstone of HDR Architecture in Denver, which carried out much of the study.
Forslund pointed out to the committee that the five-volume study contains numerous details about what can or must be done to improve the State Hospital and other facilities. What needs to happen, he suggests, is for the legislature to authorize funding now so that work can begin when a final plan is in place.
“The governor wants to set aside money so we are ready to act when the time comes,” Forslund said. In his budget address, the governor asked the legislature to set aside $60 million for “long overdue” work at the WLRC and the State School.
The interim committee will not meet again before the legislative session begins Feb. 10. But there is more drama in store for Medicaid expansion in Wyoming.
The bills passed last week will be included in a block of sponsored committee bills, and must receive a two thirds vote of in either the House or Senate to be introduced and assigned to a committee. Medicaid Fit will begin in the House, where it would be assigned to the House Health Labor & Social Services Committee. The committee is chaired by Harvey, who voted against the bill. The Insurance Pool bill will begin in the corresponding senate committee, chaired by Scott, who both authored the bill and voted against it.
— Ron Feemster covers the Wind River Indian Reservation for WyoFile in addition to his duties as a general reporter. Feemster was a Visiting Professor of Journalism at the Indian Institute of Journalism & New Media in Bangalore, India, and previously taught journalism at Northwest College in Powell. He has reported for The New York Times, Associated Press, Newsday, NPR and others. Contact Ron at firstname.lastname@example.org or follow him on Twitter@feemsternews.
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