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Passes Bill Containing Punitive New Medicaid Transfer RulesLast
By a vote of
216-214, the U.S. House of Representatives has passed budget legislation
that will impose punitive new restrictions on the ability of the elderly
to transfer assets before qualifying for Medicaid coverage of nursing
home care. The Deficit Reduction Act of 2005 now goes to President Bush
for his promised signature.
Several Republican moderates who
had supported the bill when it was voted on in December changed their
votes after learning details of the legislation and under intense
pressure from groups like AARP, but in the end the vote switches were
not enough to defeat a bill that the Congressional Budget Office says
will reduce or bar benefits for millions of Medicaid recipients. The
measure is estimated to save $39 billion over five years.
Rep. Frank LoBiondo (R-NJ) cast the deciding vote, breaking a 214-214
tie. All House Democrats and 13 Republicans voted against the bill.
Republicans who voted yes in December but no in the final vote included
Reps. Jim Gerlach (PA), Jim Ramstad (MN), Rob Simmons (CT) and John
Sweeney (NY). (Click
here to see the full vote.)
Democrats attacked the
measure as an assault on Medicaid patients and other vulnerable groups,
and said it was a prime example of the powerful influence of lobbyists
for corporate interests like drug manufacturers and health insurers, who
got much of what they wanted in closed-door negotiations with Republican
"This is a product of special interest lobbying
and the stench of special interests hangs over the chamber," said Rep.
John Dingell (D-MI).
The Impact on the Elderly
legislation will extend Medicaid's "lookback" period for all asset
transfers from three to five years and change the start of the penalty
period for transferred assets from the date of transfer to the date when
the individual transferring the assets enters a nursing home and would
otherwise be eligible for Medicaid coverage. In other words, the penalty
period does not begin until the nursing home resident is out of funds,
meaning she cannot afford to pay the nursing home.
the change in the penalty period start date will likely leave nursing
homes on the hook for the care of residents waiting out extended penalty
periods, ElderLawAnswers has dubbed the bill The Nursing Home Bankruptcy
Act of 2005. Nursing homes will likely be flooded with residents who
need care but have no way to pay for it. In states that have so-called
"filial responsibility laws," the nursing homes may seek reimbursement
from the residents? children.
The bill also will make any
individual with home equity above $500,000 ineligible for Medicaid
nursing home care, although states may raise this threshold as high as
The legislation also:
Establishes new rules
for the treatment of annuities, including a requirement that the state
be named as the remainder beneficiary.
Allows Continuing Care
Retirement Communities (CCRCs) to require residents to spend down their
declared resources before applying for medical assistance.
Sets forth rules under which an individual's CCRC entrance fee is
considered an available resource.
Requires all states to
apply the so-called income-first rule to community spouses who appeal
for an increased resource allowance based on their need for more funds
invested to meet their minimum income requirements.
Extends long-term care partnership programs to any state.In addition,
the legislation incorporates provisions in the original budget bill
passed by the Senate closing certain asset transfer "loopholes," among
The purchase of a life estate will be included in the
definition of "assets" unless the purchaser resides in the home for at
least one year after the date of purchase.
Funds to purchase
a promissory note, loan or mortgage will be included among assets unless
the repayment terms are actuarially sound, provide for equal payments
and prohibit the cancellation of the balance upon the death of the
States will be barred from "rounding down" fractional
periods of ineligibility when determining ineligibility periods
resulting from asset transfers.
States will be permitted to
treat multiple transfers of assets as a single transfer and begin any
penalty period on the earliest date that would apply to such transfers.
While the federal law applies to all transfers made on or after February
1, it also gives the states time to come into compliance. This gives
many people in most states a little time to plan. The deadline for
states to enact their own laws varies from state to state, but generally
is the first day of the first calendar quarter beginning after the end
of the next full legislative session.
The bottom line is if you
have been hesitating about seeing an attorney about long-term care
planning, hesitate no longer. If you have considered protecting some
assets for your loved ones in case you later require long-term care, you
should contact a qualified elder law attorney now.
Vote on Budget Set for Feb. 1; Group Seek to
Sway GOP Moderates
Budget Set for Feb. 1; Groups Seek to Sway GOP Moderates
House Speaker Dennis
Hastert (R-Ill.) has tentatively scheduled a re-vote on the 2006 budget
reconciliation bill (S 1932) for February 1, the day after the House
reconvenes following its winter recess. Moderate Republicans are feeling
mounting pressure from groups like AARP to change their votes.
Among other provisions in a bill that cuts back federal entitlement
programs for the first time in a decade, the legislation would impose
punitive new restrictions on the ability of the elderly to transfer
assets before qualifying for Medicaid coverage of nursing home care. (Click
here to read these provisions.)
The Senate passed the
bill before Christmas, with Vice President Dick Cheney casting the
tie-breaking vote. However, procedural moves by Senate Democrats require
the House to vote on the bill a second time after having passed it by a
212-206 margin at the end of an all-night session.
House Republicans "expect to narrowly approve the bill again, boosted by
President Bush's State of the Union speech the night before," according
CongressDaily, groups opposed to the bill's cuts are working hard to
convince moderate Republicans to vote against it. Brian Riedl, a budget
analyst for the
Heritage Foundation, says, "[N]othing is guaranteed over a six-week
Leading the fight against the bill is
AARP, which strongly opposes the transfer restrictions and has vowed
to make lawmakers who vote for them pay a political price. "This budget
represents bad policy and AARP will now work to explain the full impact
of this vote to its more than 36 million members," said AARP's CEO
William D. Novelli.
Joining AARP is a temporary umbrella
Emergency Campaign for America's Priorities (ECAP). Spokesperson
Brad Woodhouse said, "If they win, and we're not convinced they will, we
want to spill blood in the process so that they are gun-shy about
turning around and doing this again in the next budget." ECAP has
targeted some moderate Republicans at local vigils and is organizing
phone blitzes in advance of the vote.
Republicans in the House were reluctant to vote in favor of these
drastic changes to Medicaid," reports the
National Senior Citizens Law Center (NSCLC). According to NSCLC,
several Republicans who did not vote against the bill the first time
around delivered a letter in December to the congressional leadership
expressing objections to the scope of the Medicaid cuts.
Meanwhile, in his weekly radio address Saturday, January 7, President
Bush said Congress should "finish its work" and pass the budget bill.
Bush said that passage would show that the "people's representatives can
be good stewards of the people's money." Bush also urged Congress to
make all his tax cuts permanent. In an opinion piece in the
San Jose Mercury, Sen. Barbara Boxer (D-CA) said that House
Republicans should "scrap this poor excuse for a budget" and "instead
cancel some of the tax cuts for millionaires," which "would accomplish
the same thing -- deficit reduction -- but without harming our kids, our
elderly and the middle class."
Split on Medicaid Changes
Last Updated: 12/12/2005
The National Governors Association, whose membership includes both
Republican and Democratic governors, sent a letter to Congress on Monday
mostly endorsing the House's budget reconciliation package that contains
changes to Medicaid transfer rules. The endorsement of the House bill by
Democratic governors is a split with Democratic members of Congress.
Every Democratic member of Congress voted against the bill when it
passed by a slim 217 to 215 vote in November.
things, the House bill includes a measure that would extend Medicaid's
"lookback" period for all asset transfers from three to five years and
change the start of the penalty period for transferred assets from the
date of transfer to the date of Medicaid application. In addition, the
House version allows states to increase co-payment increases on Medicaid
beneficiaries with incomes above the federal poverty level. The House
version differs from the Senate budget bill, which makes only modest
changes in the asset transfer rules and doesn't include an increase in
co-payments. The two bills now have to be hashed out in a joint
House-Senate conference committee.
The NGA's letter
specifically approved of the changes to transfer penalties in the House
bill, saying the final bill should "include critical House provisions
that would increase the look-back period and begin the penalty period at
the time of application for services." The letter also endorsed the
co-payments provision and a provision in the house bill making any
individual with home equity above $750,000 ineligible for Medicaid
nursing home care.
For the full letter,
click here. An article in the Dec. 12, 2005, New York Times reports
that "Medicaid is a flash point" as House and Senate conferees sit down
to reconcile the two budget bills. The article focuses on provisions in
the House bill that would allow states, for the first time, to deny care
or services because of a person's inability to pay premiums or
Leaders Fail to Muster Majority for Bill Containing Medicaid Transfer
Last Updated: 1/11/2006
Facing a revolt among Republican moderates, House GOP leaders pulled
their budget-cutting bill containing $9.5 billion in Medicaid cuts off
the House floor on Thursday rather than put it to a vote.
bill, the House version of fiscal year 2006 budget reconciliation
legislation, would impose harsh new restrictions on the ability of the
elderly to transfer assets before qualifying for Medicaid coverage of
nursing home care. The asset-transfer changes are reportedly among the
provisions that may be adjusted as the House leadership scrambles to
forge a compromise that could win the support of both moderate and
conservative party members.
The bill's withdrawal signals
that GOP leaders could not muster the 218 votes needed to pass the
budget measure. Republicans said they would try again after the Veterans
Day weekend to find a bare majority for more than $50 billion in
spending cuts and policy changes.
On Nov. 3, the House Energy
and Commerce Committee approved the
budget reconciliation package that includes restrictions on asset
transfer rules. It would extend the "lookback" period for all transfers
from three to five years and change the start of the penalty period for
transferred assets from the date of transfer to the date of Medicaid
application. It also would make anyone with more than $500,000 in home
equity ineligible for Medicaid-funded long-term care. The
Senate's version of the budget bill does not include these
In an effort to win passage of the bill on the
House floor, Republicans dropped a controversial provision that would
allow oil drilling in the Arctic National Wildlife Refuge, but even this
failed to win enough votes for the bill's approval.
Sherwood Boehlert (R-N.Y.), Michael Castle (R-Del.) and Vernon Ehlers
(R-Mich.) said they want some of the Medicaid cuts to be removed from
the bill. According to CongressDaily, the House leadership was
discussing Medicaid with Republican moderates, focusing on provisions
that would tighten restrictions on asset transfers and increase
copayments for Medicaid recipients.
Stunning Reversal The
vote cancellation was a stunning reversal for a Republican majority that
heretofore has maintained iron discipline among its members. But that
was before President Bush's plummeting poll numbers, last Tuesday's
election results, and the electorate's growing discomfort with
Republican budget priorities.
"The fractures were always
there. The difference was the White House was always able to hold them
in line because of perceived power," Tony Fabrizio, a Republican
pollster, told the
Washington Post. "After Tuesday's election, it's 'Why are we
following these guys? They're taking us off the cliff.' "
Opponents of the Medicaid asset transfer changes have a formidable ally
in AARP. In a statement,
AARP said it could not support the House bill because of the asset
transfer provisions. These provisions, the senior advocacy group said,
would penalize people who have simply helped family members or given to
"We agree that steps should be taken to close real
loopholes that allow people to improperly qualify for Medicaid," AARP
said. "However, the extended look-back period and the change in the
penalty date would deny coverage to those eligible for Medicaid at
precisely the time they need assistance and have no remaining assets,
leaving them no other way to pay for needed long-term care."
AARP also said that the provision denying Medicaid nursing home coverage
to those with substantial home equity will force the elderly "to either
take an expensive reverse mortgage or sell the home in order to get long
term care coverage."
Congressional Budget Office estimates that the provisions in the
House bill changing the treatment of asset transfers and home equity
would reduce Medicaid outlays by about $2.5 billion over the next five
years. In its report on the bill's budgetary impact, the CBO notes that
under the current law, "very few of the applicants for Medicaid incur
penalties for prohibited asset transfers."
Even if House
Republicans are able to pass the budget cuts, the bill could be doomed
by the determination of some House and Senate Republicans to add
drilling for oil in the Arctic to any final bill. Some GOP moderates
have said they will oppose any bill that permits Arctic drilling.
For an article in the Chicago Tribune on the politics of the House
Finds That Few Nursing Home Residents Transferred Assets
Agreeing with earlier results, a study by
the Kaiser Commission on Medicaid and the Uninsured finds that asset
transfers by individuals entering nursing homes are relatively small.
The study found that 9.2 percent of Medicaid recipients entering a
nursing home had transferred assets within two years of admission. The
mean amount transferred was $5,380 and the median was $1,400.
Researchers also discovered that 18.7 percent of Medicaid nursing home
patients had transferred assets more than two years before they entered
a facility. The mean amount transferred by this group was $8,202 and the
median was $3,000.
The study also found that Medicaid nursing
home residents had minimal assets before entering the nursing home. For
example, half of unmarried residents had less than $4,000 of non-housing
assets before entering nursing homes as Medicaid patients.
The study confirmed the findings of earlier studies on the impact of
asset transfers. The
Government Accountability Office (GAO) released a study in October
that reported the level of assets being transferred by the elderly were
The Georgetown University Long-Term Care Financing Project reached a
similar conclusion in May.
These studies indicate that
changes to asset transfer rules proposed by the
Medicaid Commission may not save much money. The commission, which
was established to advise Congress on how to cut $10 billion from
Medicaid, proposed rules that would extend the "lookback" period for all
transfers from three to five years and change the start of the penalty
period for transferred assets from the date of transfer to the date of
Medicaid application. These changes in the law have been incorporated
the House version of the 2006 budget bill.
study on asset transfers is part of a group of studies on Medicaid
released by the Kaiser Commission. Other studies look at the
distribution of assets in the elderly population and strategies for
keeping individuals out of nursing homes, among other topics. For a full
list of all the reports,
Administration Reportedly Endorses House Transfer Changes
Last Updated: 12/24/2005
administration has given its blessing to provisions in the
House budget reconciliation bill (H.R. 4241) that would make it far
more difficult for the middle-class elderly to gain Medicaid coverage of
nursing home care, according to
McKnight's Long-Term Care News. Such support, says McKnight's,
"increases the likelihood these provisions will remain in the final
McNight's source is a Nov. 23 Bureau of National
Affairs article stating that "The Bush administration has announced
support for most of the key Medicaid elements in the House fiscal year
2006 reconciliation bill (H.R. 4241), particularly the provisions to
tighten rules regarding asset transfers and to give states greater
flexibility to administer Medicaid programs."
measure would extend Medicaid's "lookback" period for all asset
transfers from three to five years and change the start of the penalty
period for transferred assets from the date of transfer to the date of
Medicaid application. The bill also would make any individual with home
equity above $750,000 ineligible for Medicaid nursing home care.
Speaking to the National Association of State Medicaid Directors on Nov.
8, Centers for Medicaid & Medicare Services Administrator Mark McClellan
said that as the bill goes to conference committee with a Senate budget
bill (S. 1932) that makes only modest changes in the asset transfer
rules, the administration will continue to work closely with
legislators. Congress is expected to begin work on resolving the starkly
different proposals in early December.
Washington Post is reporting that while Democratic lawmakers in
Washington are united in their opposition to the Medicaid cutbacks in
the House bill, "Democratic governors are quietly supporting the
provisions and questioning the party's reflexive denunciations." The
Congressional Research Service (CRS), the public policy research arm of
Congress, has produced a 192-page side-by-side comparison of the
Medicaid and Medicare provisions of S. 1932 and H.R. 4241. Although the
CRS does not distribute its reports to the public, the National Senior
Citizens Law Center says the report is or will be available on its Web
site. Go to
Approves Bill Substantially Changing Asset Transfer Rules
Last Updated: 11/21/2005
narrowest of margins, the House has voted to approve a budget plan that
cuts about $12 billion from Medicaid, including imposing harsh new
restrictions on the ability of the elderly to transfer assets before
qualifying for Medicaid coverage of nursing home care.
Deficit Reduction Act of 2005 (HR 4241) was approved by a 217 to 215
vote in the early hours of Friday, November 18. The bill maintains
provisions aimed at making it even more difficult for the middle-class
elderly to receive long-term care coverage. The measure would extend
Medicaid's "lookback" period for all asset transfers from three to five
years and change the start of the penalty period for transferred assets
from the date of transfer to the date of Medicaid application. The bill
also would make any individual with home equity above a certain limit
ineligible for Medicaid nursing home care, although in a concession to
Republican moderates that limit was raised from $500,000 to $750,000.
The final measure retains a provision imposing co-payment increases on
Medicaid beneficiaries with incomes above the federal poverty level.
The bill now must be reconciled in conference committee with a
Senate budget bill that makes only modest changes in the asset
transfer rules. (For an ElderLawAnswers article explaining the effects
on America's elderly of the two competing proposals,
Last week, Republican leaders were forced to
pull the bill from the floor because of a lack of support. In the final
vote, after some of the bill's cuts had been softened, 14 House
Republicans and all House Democrats opposed the bill. (For a tally of
votes on the bill,
click here.) The
Center on Budget and Policy Priorities estimates that the
eleventh-hour changes only eased the cuts aimed at the poor by 2 percent
from the original version.
The House bill would also:
Codify the income-first rule.
Establish new rules for the
treatment of annuities, including a requirement that the state be named
as the remainder beneficiary.
Require Medicaid applicants to
provide "full information . . . concerning any transaction involving the
transfer or disposal of assets during the previous period of 60 months,
if the transaction exceeded $100,000, without regard to whether the
transfer or disposal was for fair market value."
Continuing Care Retirement Communities (CCRCs) to require residents to
spend down their declared resources before applying for medical
assistance. Set forth rules under which an individual's CCRC entrance
fee is considered an available resource. Extend long-term care
partnership programs to any state.
Associated Press predicts that the upcoming conference committee
negotiations with the Senate will be "arduous." The negotiations, writes
Los Angeles Times, "are likely to test [President] Bush's ability to
work his will in Congress when his approval ratings are at an all-time
low." The conference committee has not yet been named and no timetable
for its deliberations has been set.
The final version of HR
4241 is still unavailable. For a version of the bill that does not
reflect last-minute changes (such as the shift from $500,000 to $750,000
in home equity),
click here. Scroll down to Title III, Chapter 2 for the asset
transfer rule changes. Meanwhile, a
survey for the National Academy of Social Insurance finds that 7 in
10 Americans age 40 and over think the federal government should do more
to help people meet the cost of long-term care.
Pressures Easing, But Medicaid Still Faces Long-Term Challenges, Surveys
[Oct 20, 2005]
state cost-containment actions and a stronger economy have improved the
outlook for Medicaid and SCHIP, but factors contributing to Medicaid's
cost growth continue to present long-term challenges, according to a new
state surveys released Wednesday by the
Kaiser Commission on Medicaid and the Uninsured. According to the
survey, state Medicaid officials say that rising health costs, declining
employer-based coverage, demographic trends and other factors raise
concerns about future Medicaid cost growth.
Budget In a
survey of state officials, KCMU and
Health Management Associates found that growth in Medicaid spending
slowed to an average of 7.5% in fiscal year 2005, the third year of
decreased growth. The survey indicates that a decline in enrollment
growth in fiscal year 2005 to 4% combined with spending reduction
measures taken at the state level contributed to the slowdown in
spending growth. Enrollment growth is expected to slow for the fourth
consecutive year to 3.1% in fiscal year 2006 (KCMU
release, 10/19). The gap between Medicaid spending increases and
state tax revenue growth fell to 2.6%, the lowest level since 1999.
According to the survey, despite the improved fiscal outlook, states are
planning new cost-control measures, such as provider rate reductions or
Washington Post reports (Washington Post, 10/20).
addition, many states are expanding coverage (CQ
Drug Benefit In addition, KCMU and
Health Policy Institute surveyed state officials regarding the
outpatient prescription drug benefit, finding that all surveyed states
actively managed their benefits and imposed a variety of cost-control
mechanisms. More than two-thirds of responding states use preferred drug
lists. Sixteen of 37 states surveyed placed limits on prescription
refills, but only two states automatically denied refills that surpassed
Enrollment Procedures KCMU and the
Center on Budget and Policy Priorities conducted a survey that
focuses on state actions regarding Medicaid and SCHIP eligibility,
enrollment and renewal procedures, as well as cost-sharing requirements
for low-income families (KCMU release, 10/19). According to the survey,
Missouri and Tennessee have made large cuts in eligibility. The survey
also found that 20 states reported taking actions expand coverage by
simplifying procedures and requirements for beneficiaries, expanding
eligibility or reducing premiums for children's coverage (CQ HealthBeat,
10/19). However, 10 states either increased premiums or lowered the
level at which they begin charging premiums for children's coverage,
according to the survey.
Reaction Diane Rowland, executive
director of KCMU and executive vice president of the Kaiser Family
Foundation, said, "These studies affirm the basic countercyclical nature
of Medicaid. Its costs increase most rapidly when it is most in demand
-- in a sluggish economy," adding, "While the fiscal crisis has
subsided, state budget pressure remains because the nation relies on
Medicaid to forgive the failures of our larger health system." (KCMU
release, 10/19). Alan Weil, executive director of the
National Academy for State Health Policy, said, "We are at a turning
point in how much with think of (Medicaid) as a national program,"
adding, "There is tension between state and federal government, ... we
need to think about who the burden is going to fall upon" (CQ
Nursing Home Problems ? Can You Help?
Topic: Nursing Home Issues
the National Senior
Citizens Law Center (NSCLC) will publish a new guide to nursing home
laws, entitled 20 Common Nursing Home Problems, and How to Resolve Them.
The guide is an adaptation and expansion of NSCLC attorney Eric
Carlson?s Fifteen Falsehoods presentation.
In order to
publicize the guide, NSCLC would like to be able to quote nursing home
residents, family members, or advocates who have encountered any one (or
more) of the Twenty Problems. If you or your client has heard any one of
the nursing home falsehoods listed below, please contact Eric at (213)
639-0930, ext. 313, or firstname.lastname@example.org. NSCLC will not mention you or
your client without express permission.
1. ?Medicaid does not
pay for the service that you want.?
2. ?The nursing staff will
determine the care that you receive.?
3. ?We don?t have enough
staff to accommodate individual schedules. You will be woken up every
morning at six a.m.?
4. ?We don?t have enough staff. You should
hire your own private-duty aide.?
5. ?If we don?t tie your father
into his chair he may fall or wander away from the nursing home. There?s
just no way we can always be watching him.?
6. ?Your mother needs
medication in order to make her more manageable.?
7. ?We must
insert a feeding tube into your father because he is taking too long to
8. ?Your children can visit you only during visiting hours.?
9. ?We can?t admit your mother unless you sign the admission agreement
as a ?Responsible Party.??
10. ?Please sign this arbitration
agreement. It?s no big deal. Arbitration allows disputes to be resolved
11. ?Medicare can?t pay for your nursing home care
because we have determined that you need custodial care only.?
?We must discontinue therapy services because you aren?t making
13. ?We can?t give you therapy services because your
Medicare reimbursement has expired, and Medicaid doesn?t pay for
14. ?Because you are no longer eligible for Medicare
reimbursement, you must leave this Medicare-certified bed.?
?Even though you?re now financially eligible for Medicaid payment, we
don?t have an available Medicaid bed for you.?
16. ?We don?t have
to readmit you from the hospital because your bed-hold period has
17. ?You must pay any amount set by the nursing home for
18. ?We have no available space in which residents
or family members could meet.?
19. ?You must leave the nursing home
because you are a difficult resident.?
20. ?You must leave the
nursing home because you are refusing medical treatment.?
Florida a Sweeping Right to Curb Medicaid
Bottom of Form
Published: October 20, 2005
Oct. 19 - The Bush administration approved a sweeping Medicaid plan for
Florida on Wednesday that limits spending for many of the 2.2
million beneficiaries there and gives private health plans new freedom
to limit benefits.
The Florida program, likely to be a model
for many other states, shifts from the traditional Medicaid "defined
benefit" plan to a "defined contribution" plan, under which the state
sets a ceiling on spending for each recipient.
the age of 21 and pregnant women will be exempt from the limits.
The Florida plan says, "The state will set aside a specific amount of
money for each person enrolled in Medicaid," based on the person's
medical condition and historic use of health care.
Leavitt, secretary of health and human services, approved the proposal
16 days after it was formally submitted to him, with strong support from
After meeting here on Wednesday afternoon with
Governor Bush, Mr. Leavitt said: "Today will be remembered as a day of
transformation for the Florida Medicaid program. Florida's framework
will be helpful to other states."
Joan C. Alker, a senior
researcher at the Health Policy Institute of Georgetown University,
said: "Florida's proposal is one of the most far-reaching and radical
proposals we've seen to restructure Medicaid. The federal government and
the states now decide which benefits people get. Under the Florida plan,
many of those decisions will be made by private health plans, out of
Vernon K. Smith, a former Medicaid director in
Michigan who is now a consultant to many states, said: "Florida's
program is groundbreaking. Every other state will be watching Florida's
South Carolina has developed a similar proposal.
Kentucky are waiting in the wings." In his state of the state speech
to the Florida Legislature in March, Mr. Bush called for transforming
Medicaid, saying it was unsustainable in its current form. "Over the
last six years," he said, "Medicaid costs have increased an average of
more than 13 percent annually. State revenues grew an average of 6
percent a year." The plan, to be put into effect over five years, will
significantly increase the use of managed care. Questions and answers
prepared by federal officials say that a principal aim of the Florida
program is "to bring predictability to Medicaid spending and to reduce
Medicaid's rate of growth." President Bush has proposed similar changes
at the federal level for several years, but Congress has not accepted
those ideas. In Congress, Democrats and some moderate Republicans
resisted the president's proposals on the ground that they would have
allowed states to reduce coverage for very poor and very sick people. On
Wednesday, Mr. Leavitt waived many provisions of federal law, letting
Florida make the changes in a demonstration project.
the waiver, Florida will establish "a maximum per year benefit limit"
for each recipient and fundamentally change its role. The state will
largely be a buyer rather than a manager of health care.
an interview, Alan M. Levine, secretary of the Florida Agency for Health
Care Administration, estimated that no more than 5 percent of Medicaid
recipients would hit their annual limits. At that point, Mr. Levine
said, "the health plan will still be responsible for providing services
to the consumer, but the state's reimbursement would be limited to that
amount." Asked whether the beneficiary would be responsible for paying
costs beyond the limit, he said: "That can happen today. There are
arbitrary limits and caps embedded in the state Medicaid program, limits
on home health services, doctors' visits, prescription drugs."
For each beneficiary, Florida will pay a monthly premium to a private
plan. Insurance plans will be allowed to limit "the amount, duration and
scope" of services in ways that current law does not permit.
The Florida Medicaid director, Thomas W. Arnold, said he believed that
insurers would tailor benefits for different groups like people with
AIDS and children with chronic illnesses. About half of Medicaid
recipients in Florida are children, but they account for less than 20
percent of the costs.
The Florida program includes these
features, approved Wednesday by the federal government:
recipient does not choose a private plan, the person will be
automatically enrolled in one that the state selects.
Medicaid recipients can "opt out" of Medicaid altogether and receive
subsidies to help pay the employee's share of the premium for
employer-sponsored health insurance. Those beneficiaries will have to
pay co-payments and deductibles like other employees in the same plan,
even if the charges exceed normal Medicaid limits.
will deposit money into individual accounts for recipients who enroll in
programs to help lose weight, stop smoking and lead healthier lives.
Florida and the federal government will establish a pool of money
providing up to $1 billion a year to help hospitals and other health
care providers who treat large numbers of uninsured people.
spokeswoman for Mr. Leavitt, Christina Pearson, said the decision on the
Florida plan was not influenced by the fact that Governor Bush is the
president's brother. Federal officials are prepared to approve similar
innovative solutions from other states, Ms. Pearson said.
provides health insurance to more than 50 million low-income people. The
states and federal government jointly finance it.