Article by Erik Smith/ Washington State Wire. Published on Tuesday, December 22, 2009 EST.
Buried Deep in Senate Health Bill, Provision Offers Medicaid Money for State Insurance Program – is Cantwell’s Doing
U.S. Sen. Maria Cantwell, D-Wash.
By Erik Smith
Staff writer/ Washington State Wire
OLYMPIA, Dec. 22.—Washington’s Basic Health Plan, the state’s popular-but-beleaguered insurance plan for the working poor, could get a reprieve from the U.S. Senate.
Buried deep in the details of the health reform legislation that will come before the full Senate this week is a provision that would make it easier for Washington to obtain Medicaid money for the program. It could come just in time to save the program, which is on the chopping block this year as lawmakers in Washington state struggle with a $2.6 billion shortfall.
The provision, the work of Sen. Maria Cantwell, D-Wash., is contained in the “manager’s amendment” to the Senate health reform bill that is expected to receive a vote of the full Senate by Christmas Eve.
The state’s Basic Health Plan has been proposed for termination next year by a reluctant Gov. Christine Gregoire. The plan currently covers about 65,000 people, offering subsidized health insurance for low-income adults who do not qualify for Medicaid programs. When it was launched in the late ’80s, lawmakers considered it among their proudest accomplishments, but because the plan is financed entirely with state funds, it has come under attack whenever state tax revenue runs short.
This year the program was cut nearly in half when the state faced a $9 billion shortfall. Two weeks ago Gregoire proposed a budget that would eliminate the rest of the program, saving approximately $160 million a year. The governor vowed to come up with a tax-increase proposal to save the program next year.
Far From a Done Deal
The Senate bill would provide more than enough federal money to save the Basic Health Plan, but state officials aren’t breathing a sigh of relief just yet. Even if the provision survives the vote in the U.S. Senate and the horse-trading that is sure to follow with the U.S. House, the measure merely makes it easier for Washington to apply for federal Medicaid funding. The ultimate decision would remain with the federal Center for Medicaid Services, said Johnathan Seib, health care policy adviser in the governor’s office.
“It doesn’t mean the check is in the mail, but it does open the door for us to cover this population, when the door has never been open before.”
State lawmakers have been hoping to find a way to obtain federal Medicaid funding ever since the program was launched. Under that funding scheme, which finances a myriad of health programs in Washington state and elsewhere, the state and federal governments share the expense. Currently the federal government pays about 65 percent.
Washington has never applied for federal funding for the Basic Health Plan, however. State officials have been waiting for a relaxation of strict Medicaid rules that almost certainly would have meant rejection.
Cantwell Leads Charge
If the provision works as planned, Washington would be able to obtain Medicaid money by April 2010, said John Diamond, spokesman for Cantwell’s office. “We think it could provide some needed relief for the state of Washington,” he said.
Cantwell was a member of the state House when the Basic Health Plan was passed and was one of its strongest supporters. This year she has made the program a focus of her efforts in the U.S. Senate during the lengthy wrangle over health care reform. Cantwell is a member of the Senate Finance Committee that wrote one of the first drafts of the bill, and this fall she won an amendment that would encourage other states to launch similar programs. Her plan would allow states to use federal money to help pay for subsidized health-insurance programs. But the money wouldn’t kick in until the bulk of the reforms are launched in 2014, and it wouldn’t help get the Washington program through its immediate budget crunch.
There is a strong case to be made for some sort of stopgap federal funding, Diamond said. The federal health reform legislation is based in large part on an eventual expansion of state Medicaid programs. The new proposal would free up Medicaid money in the meantime for states that already pay for their own health-related programs without federal help. Washington isn’t the only one – several states currently offer subsidized health insurance programs, and all face the same sort of budget trouble as this one.
Under the plan, Washington would be eligible for as much as $180 million during the first year. Why $180 million? Diamond noted that Washington currently offers two health-related programs that are not financed by Medicaid – Basic Health and General Assistance-Unemployable. The $180 million represents 65 percent of the cost of the two programs over a single year. The state also would be eligible for federal funding in future years until the health reform legislation is fully implemented.
Depends on Feds
Though the Senate plan could provide enough money to save the program, Seib noted that it depends on the cooperation of federal Medicaid regulators.
The Senate language will make it easier for Washington to show that it complies with budgeting rules, but the state still will probably face scrutiny in other areas, he said. For instance, the Washington program requires participants to pay for a portion of their insurance, but federal Medicaid officials have traditionally been opposed to programs that require copayments. They also have taken a dim view of programs that have waiting lists and enrollment limits, like Washington’s – Medicaid programs normally are seen as entitlement programs, open to all who qualify.Your support matters.
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