Medicaid: Problem after problem

JACKSON – Mississippi’s more than 600,000 Medicaid recipients were carried to the brink Tuesday by the Legislature and Gov. Haley Barbour.
About 90 minutes before Medicaid stood repealed and unfunded, the final piece of legislation was passed to continue the program that provides health care to the disabled, elderly, poor pregnant women and impoverished children.
While Tuesday night in many ways was the most dramatic example of the continuing problems in the health care program, it was far from an anomaly. In recent years, Medicaid recipients have been caught in the middle of numerous political disagreements that threatened the agency and, more importantly, health care for the beneficiaries.
During budget negotiations that went on almost until the new fiscal year began on Wednesday, Barbour called Medicaid “the elephant in the room.”
House Public Health Committee Chair Steve Holland, D-Plantersvile said, “it is an issue every year because No. 1 it is where all the money is – a $5.2-billion budget in state and federal funds. Medicaid has the largest contract in the state – $120 million” for the company that oversees much of the agency’s payments to health care providers.

History of problems
In seems every year there is a new controversy with the agency.
- In the early 1990s, then-Gov. Ray Mabus led the charge to close the state’s three “charity hospitals,” saying the money going to fund them could be used to draw down additional federal Medicaid funds to improve health care across the state. Mabus prevailed in closing the hospitals, but many say it cost him re-election a couple of years later.
- In 2002, then-Gov. Ronnie Musgrove was sharply criticized by legislative leadership and then-Attorney General Mike Moore for not making cuts in the program to offset what was at the time a record $137.8-million deficit. After the criticism, the Democratic governor threatened to shut down many “optional services” in the program, such as nursing home care, if the Legislature continued with a plan to underfund the program the following year.
A compromise was crafted during an evening meeting at the Governor’s Mansion involving Musgrove, legislative leaders and Moore.
- In 2004, Barbour convinced legislators to remove about 60,000 elderly and disabled from the program, resulting in protests, including a storming of Barbour’s office, which was at the time in the Woolfolk Bulding.
Health advocacy groups, joined by Attorney General Jim Hood, went to court to successfully stop Barbour from removing the people from the program. U.S. District Judge Henry Wingate ruled that the Division of Medicaid did not follow federal guidelines in removing the people from Medicaid.
- In the 2005 session, the Legislature had to deal with a $268 million deficit in the program. During the 2003 campaign, Barbour criticized Musgrove for not making cuts in Medicaid to offset a deficit. But in 2005, Barbour left it to the Legislature to deal with the record deficit. He said the deficit was too big for him to cut.
- In a 2008 special session, Barbour tried unsuccessfully to impose a $90 million tax increase on hospitals. After being blocked, Barbour began the process of making cuts to the program to deal with then-deficit. He was again sued, by those saying he was cutting in areas where the law did not allow. The Republican governor stopped the cuts after discovering an accounting error, resulting in the federal government owing the state $90 million.
And then there was this year when the fight centered on a hospital tax increase to help fund the program.

Influx of money
Medicaid, which was started in Mississippi in the early 1970s, is a federal-state program. Under normal circumstances, Mississippi puts up about 24 cents of every Medicaid dollar spent with the federal government providing the rest. Because Mississippi is the poorest state in the nation, it has the best match rate.
And thanks to the federal stimulus package passed by Congress and signed into law by President Barack Obama earlier this year, Mississippi’s match rate until at least January 2011 will be even better. Mississippi will put up 16 cents of each $1 spent on Medicaid.
That improved match rate is providing Mississippi an extra $256.1 million in federal Medicaid funds for the fiscal year that began Wednesday. Even with those additional funds, the Legislature and the governor literally went until the final hours before agreeing on a Medicaid budget, which Barbour and the Senate leadership insisted had to include a hospital tax increase of $60 million.
And those perennial problems have occurred despite an additional $315 million in Medicaid funds provided by the federal government to Mississippi over a two-year period after Hurricane Katrina pummeled the state in August 2005. And it should not be forgotten that the multibillion-dollar lawsuit settlement Attorney General Moore garnered from tobacco companies in the 1990s continues to provide money to the Medicaid coffers.
It should be noted that starting in 2005, the state lost $90 million annually that about 30 public hospitals put up to pull down federal Medicaid funds. The federal government ruled the process of the hospitals putting up the funds and then getting them back a short time later when the federal money was drawn down was improper.
“I think any business dealing with health insurance is most likely experiencing some of the problems we are having as a state,” said Senate Appropriations Committee Chair Alan Nunnelee, R-Tupelo. “The cost of health insurance is continuing to escalate.
“Most business leaders tell me that is one of the biggest problems they deal with each year. And we face the same issues as a state.”
Nunnelee said they are even magnified for a state. First of all, the exact cost of Medicaid is difficult to predict from year to year because it depends on the number of eligible people who apply for the program.
Medicaid provides coverage for more than 90 percent of the elderly in the state in nursing homes. Plus, people who are disabled and covered by Medicaid often have health problems that are more costly.
Another issue, Nunnelee said, is that Medicaid recipients are not required to equate care to costs. For instance, Nunnelee said the parent whose child is covered by private health insurance must decide if the child is running a fever at 3 a.m. whether to purchase over-the-counter medicine, go the emergency room where the private insurance parent will be left with a larger bill or wait until the following morning to visit the pediatrician where the cost for the parent with private insurance will be less.
Nunnelee said the cost for the Medicaid parent will be the same at the emergency room or at the pediatrician.
“And the most expensive option of all (for the Medicaid parent) is buying an over-the-counter drug,” Nunnelee said, adding it is likely the parent might not be able to afford the $10 medication.
He said those situations need to be addressed.
Holland also recognizes problems in the program, but said, “it is the finest economic generator in this state. It supports every hospital, every nursing home, most every doctor’s office, drug stores. About one-quarter of the population is on the program.”
Holland has said Barbour has put programs in place designed to hamper access to Medicaid. He said that hurts health care and the state’s economy. Barbour has countered he has only tried to hold down costs “to protect the taxpayers.”
Because of the importance of the program, “you endure the problems,” Holland said. “I don’t sense this getting any easier. Health care is costing more and more. The issue of accurately estimating the cost of health care and avoiding deficits is always going to be difficult in the poorest state in the nation.”

Bobby Harrison/NEMS Daily Journal