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Two states begin Medicaid overhaul

By ASSOCIATED PRESS
Published May 24, 2006

WASHINGTON - West Virginia's Medicaid families could face a reduction in benefits if they refuse to sign contracts promising to show up for doctors' appointments and use the emergency room only for emergencies. Kentucky, meanwhile, is putting new limits on prescriptions and visits to therapists.

They're the first two states to take advantage of a new law that makes it easier to mix and match which residents get which benefits under Medicaid, the state-federal program that provides health insurance coverage to about 55-million low-income people.

In years past, when states provided a health benefit for their Medicaid beneficiaries, they had to do so for all of participants in their state. The concept, called comparability, guaranteed comprehensive health insurance coverage for the poorest of the poor.

If one person got prescription drug coverage, for example, all participants were entitled to it.

Now, comparability is out. Flexibility is in.

Comparability guaranteed that states didn't discriminate against a segment of needy people based on their health conditions, or where they live, said Judith Solomon, a senior fellow at the Center on Budget and Policy Priorities, a liberal think tank.

"At the end of the day, I see this leading to people not getting things they need," Solomon said.

But governors saw the comparability requirements as a straight jacket, forcing them to drop people off the Medicaid rolls completely when trying to slow the program's explosive costs. The governors view the changes approved by Congress as a way to scale back coverage for some rather than dropping people into the ranks of the uninsured.

Other states are looking to join West Virginia and Kentucky in installing changes based on the new flexibility. Christina Pearson, a Health and Human Services spokeswoman, said a third state's plan would be approved later this week. She would not identify the state.

"We have several states that we're already having discussions with," said Dennis Smith, an official at the Centers for Medicare and Medicaid Services. "And you can believe the phone lines have been lit up to Kentucky and West Virginia in the past week."

At the root of the state plans is a quest to slow the growth of a program that has ballooned to about $275-billion. The states pick up, on average, about 43 percent of the overall costs.

"We made the decision early on that our goal would be to provide reasonable health benefits for the current population of eligibles rather than unlimited benefits for a smaller population,' said Shannon Turner, Kentucky's Medicaid commissioner.

Kentucky will move its Medicaid population into four types of insurance coverage - one serving the general Medicaid population, one that serves children, one for the elderly and another for the developmentally disabled.

The state also imposed limits on prescriptions and physical therapy and speech therapy - 15 visits per person per year. The changes will save more than $100-million in each of the first two years, Turner said.

"These are practices that are standard in the commercial market," she said, adding that residents could get more prescriptions or therapy visits covered by Medicaid if they can show medical necessity.

[Last modified May 24, 2006, 05:35:27]