In Black America; Medicare: Opportunity or Dilemma

Thank you for watching the video, take care, Quran, Canon and Radiation oynat17 From the Longhorn Radio Network, the University of Texas at Austin, this is In Black America. It expanded Medicare benefits for the first time since Medicare was in an act in 1965, and it also dramatically changed the financing concept, placing the burden of the financing of the new benefits on the beneficiaries themselves.

It also accelerated the expansion of Medicaid in terms of liberalized coverage for mothers and children and a number of changes related to low-income Medicare beneficiaries. Dr. Roof Ham of George Washington University. This past October in Nashville, Tennessee, a Harry Medical College held its second national conference on health care for the poor and underserved. The conference provided an opportunity for scholars from across this nation from different disciplines to develop ideas and policy questions relating to health care for the poor and underserved. It addressed a variety of fundamental issues such as health care for the uninsured, recent changes in Medicare and Medicaid, the economic status of hospitals and their already accessibility to the poor, maternal and infant care, and such special problems as AIDS and aging. The conference participant confronted issues and developed strategies to eradicate the problems

of poor and underserved persons within the health care system in this nation in the 1990s. I'm John L. Hanson Jr. and welcome to another edition of In Black America. This week, Medicare, Opportunity or Dilemma in Black America. The Medicare Catastrophic Coverage Act of 1988 will probably go down in history as a classic case of a good idea going wrong and a misreading by the administration, the Congress, and the American Association of Retired People. The intent of the legislation initially was to cover catastrophic hospital and physician services. In the course of the legislative process, other benefits were added that included drug coverage, with a substantial deductible, expanded home health benefits, liberalized skilled nursing home benefits, respite care, and mammography.

In November of 1988, Mahari Medical College in cooperation with the Tennessee Department of Health and Environment, the Bureau of Health Services established a not-for-profit institute on health care for the poor and underserved. The institute is dedicated to addressing the many problems that affect the health of the poor and underserved. The conference took place providing excellent opportunity for scholars from different disciplines to develop ideas and policy questions relating to the health care of the poor and underserved. Dr. Ruth Hamp, from the Department of Health and Administration at George Washington University, presented a paper that focused on the current Medicare system, Dr. Ruth Hamp. While the elderly appear to approve of all the new benefits, the financing of the benefits was a major departure from Medicare's prior history, and from the way we have financed social programs in this country by spreading the risk across very large population groups.

The financing was based on that new premise that beneficiaries themselves should pay for the benefits by an increase in the Part B premium and assert tax on the income tax for the elderly, and the timing of that latter was probably not terribly good because we had just had tax reform where everybody believed their taxes would be in cuts, so we had a funny historic phenomena. I believe that two factors triggered the current backlash from the elderly, and it should be noted that this backlash has come mainly from the more affluent elderly and not the poor elderly, and it's the affluent elderly that will pay the maximum cert tax, that 15 percent cert tax. The first factor is that many of the more affluent elderly already have supplementary

health insurance coverage, and a large number of those people are federal and state employees. And many of them are retirees of the large corporations and have coverage through the employers' retirement plan in addition, there are all the Medigap policies that people have bought. The second factor was a new and organized interest group that seized on this issue really to develop as an interest group and seized on the financing issue to promote their cause. As you know from the newspapers and the TV coverage, the backlash has been severe, and Congress is now in the process of either repealing the provisions, just the Medicare provisions, or is no talk of repealing the Medicaid provisions, or substantially reducing the coverage.

Compounding the backlash was the recent re-estimates of two of the benefits, the drug benefit and skilled nursing home benefit, and apparently there's some talk states or good opportunity to shift some of their skilled nursing home costs from Medicare to Medicaid. And so the CBO estimates and other estimates have made the cost of this Medicare catastrophic plan much, much higher. There's been a major dispute over the actual cost of the drug benefit. There will be a vote in the House on two options as it stood on Saturday and it could have changed this morning. So please understand this. The first is a complete repeal of the Medicare provisions, total repeal, and the main proponent of that is Congressman Archer.

Now to give you a funny idea of how things work in Washington, ChipCon is writing specifications for both Mr. Archer's bill and Mr. Gratisons' bill, which does not seek full repeal, but is an agreement with Mr. Waxman for the retention of the drug benefit, respite care, mammography, and deletion of the skilled nursing home, expansion, the hospital, and the physician-catastrophic provisions. Now I must tell you that the positions change almost hourly on that, and anything I tell you now may be totally different by the end of the week, or even by tomorrow morning. The financing in the second group would be through the Part B Premium Removing the Surtex. The Senate appears to be an equal disarray as the House, and I am not quite sure what's going to happen in the Senate, and if the Senate and the House bills will be anything

like each other, and what will happen in conference. I still think there is a possibility that it will be totally repealed, which you should understand has a major impact on the federal deficit, a negative impact on the federal deficit, because in the first few years of the program it was to show a surplus, and that surplus is used to balance the general deficit, as in the surplus in the Social Security Trust Funds, and everybody should understand that if you took out the numbers from the Social Security Trust Funds, the deficit would be much, much higher. And those Social Security Trust Funds' monies are a promise to the future when most of you in this room will begin retiring after I retire, but when most of you in this room will begin retiring, so you should be terribly concerned that the Social Security Trust Fund

monies are being used to disguise the real magnitude of the budget deficit. Now I think most important is the reaction of Congress to the rejection of this major piece of legislation by a very large constituency after passage of the legislation, not during passage of the legislation, and after the association for the elderly, the AARP, and I hope Dr. Roder is in the audience to contradict me later on. The largest single interest group had supported the legislation. It is unlikely that the Congress will seriously consider any further liberalization of Medicare for a very long time, and this also places the Pepper Commission in a very awkward situation. However, there will be changes in other parts of Medicare, and you heard a little of that

this morning from Lou Sullivan. There is going to be a major change in the way physicians are paid. Under Medicare, a shift in the usual and customary fees that have favored the procedure oriented, this is going to come. This is going to be a terrific fight. If it doesn't pass this year, it is going to pass in the next two, three years. So you are going to see changes in reimbursement, but I doubt you're going to see liberalization of benefits for a very long time. There is also a serious effort as you heard this morning to begin to assess health outcomes. And there was an organization once upon a time called the National Center for Healthcare Technologies, whose function was to do that. That was killed in 1981 by the Reagan administration. And we are now seeing the rebirth of that through some new legislation.

Now the governors, because of a series of expansions that I will go through, have recently called on Congress for a moratorium on any further liberalizations of Medicaid, because of the fiscal impact on the states, and the fiscal impact on the states vary widely. I live in a state with the 10th highest per capita income in the nation, the Commonwealth of Virginia, which has one of the, shall we say, least liberal Medicaid programs in the country. With each of these liberalizations, it has upset our legislators and our governor very seriously, because the state funds have been prioritized and education and transportation were the number one priorities within our state.

And yet every time we turn around, there are many billions of dollars that we have to add to Medicaid. Now I will tell you that I am the member of the board that has pushed for expansion and eligibility, and so my sympathies are with Congress continuing to take these actions because I know my state can well afford to be somewhat more generous than it has been. The governor, well I talked about the governors. The governors are really very upset because the federal government has shifted off many prior federal responsibilities to the states over the last eight to ten years. Education, health care, the whole block grant, which ended up with reduced dollars into the states, all of this has resulted in the states receiving in real dollars less money than they did here to for, and now Medicaid is being mandated for expansion, and states

pay 50 to about 23 percent of the cost of Medicaid. It's in inverse relation to the per capita income of the state. My state is a 50-50 state. Mississippi gets about 70 percent in federal dollars and has to put out much less of its own dollars. I'd like to spend a few minutes describing the changes that have occurred since 1984, and to talk about some of the most recent proposals. Many of the provisions have come through the budget reconciliation process. More included in the Medicare Catastrophic Act and several major changes are now pending. The most notable changes have been the steady increase in the services for mothers and children. In 1984, states were required to cover all pregnant women meeting the state's income

and resource requirements, whether or not they were receiving cash assistance benefits. They were also required to phase in coverage of all children under 7, born after September 1983, who met the income and resource requirements. Beginning in 1987, states could cover all pregnant women, infants and children under the poverty line, including children under the age of 5, born after September 1983, beginning in 1988, the phase in could be to age 8. And states had the option beginning in 1988 to cover pregnant women and infants up to 185 percent of poverty. The Medicare Catastrophic Act required states to cover women and infants below 75 percent

of poverty effective July 189 and below 100 percent of poverty effective July 190. The 1990 budget resolution includes 200 million in new budget authority to begin additional Medicaid initiatives for mothers and children. But the 200 million reflects one quarter of 1990 anticipated federal expenditures. The estimates of the impact when fully implemented are $13 billion in federal funds. The largest expansions that are being proposed are the following. A phased in mandatory coverage of pregnant women and infants up to 185 percent of poverty by July 1, 1993.

A phased in mandatory coverage of children, born after September 1983, up to 100 percent of poverty by July 1, 1990. And option at coverage immediately of children under 18, whose incomes are under 100 percent of poverty. Medicaid coverage has also been liberalized for the elderly disabled and disabled poor. Beginning in 1987, states were permitted to provide Medicaid coverage to the aged and disabled with incomes above the cash assistance standard but below the poverty line or they could cover the Medicare cost sharing. The catastrophic law requires states to phase in coverage of Medicare cost sharing for all elderly and disabled who are below the poverty line and it's a four-year phase in.

And this is one of the provisions that may hold in attempts to repeal or change. Welfare reform legislation also extended Medicaid for people previously covered by AFDC who had returned to the workforce. One of the greatest incentives to going back to work, particularly at minimum wage jobs, is you lose your Medicaid coverage, which is a very valuable bit benefit. Now the states are required to continue that coverage for a specified period of time. There have been major provisions affecting nursing homes, which have eliminated the differences between skilled and intermediate care facilities, which have added provisions to prevent spousal impoverishment.

And there have been additional changes. The key point I want to make is that a number of the states have been very liberal on their own in the expansion of Medicaid. A number of states have dragged their heels. The Congress has now turned to the option of rather than making provisions optional of requiring states to do certain things. Some see it as a cop-out on the part of the federal government for not putting money behind their mandates. Because by and large, the states have to pick up a large part of the costs and with costs shifted to the states from other social programs as sympathetic as I am with these expansions, and I'm for every last one of these expansions, including the removal in my state of the 209B restrictions.

It is a terrific burden on states and on the revenues of states who are trying desperately to cope with expanded education programs, drug abuse problems, crack babies, and AIDS. Dr. Ruth Hamp, with the Department of Health and Administration at George Washington University in Washington, D.C. Also presenting a paper with Susan Baird, Director of Policy and Planning Bureau of Medicaid in Nashville, Tennessee. Susan Baird. I think it's important to note first of all that both Medicare and Medicaid are limited in terms of individuals who can be served. Medicare has traditionally been limited to persons who are elderly or disabled. Not everyone 65 or older qualifies for Medicare, no matter what his or her income level is. But Medicaid, on the other hand, has traditionally been categorically linked to AFTC, SSI, to certain specialized groups, and in all but 15 states, to persons to find is medically

needy. I think there's a perception on the part of the general public that Medicaid is a health insurance program for the poor, but historically this has not been true. Medicaid has operated as a medical assistance program for people who are participating in certain other public programs, such as AFTC or SSI, but not as a health insurance program for the poor in general. Both Medicare and Medicaid, most of the expenditures in both programs, it's not surprising to note, go to pay for healthcare for sick beneficiaries. In 1987, about 93 percent of Medicare spending was targeted to hospital care and physician services, while 72 percent of Medicaid spending went for hospitals and nursing home care. Efforts, the types of preventive health care that might make some of this costly institutional care lists necessary, are typically not available through Medicare or Medicaid.

Most of the direct Medicaid toward preventive health care have occurred primarily through the EPSD&T program for children under age 21, which is a fairly small program in most states. In Tennessee, EPSD&T expenditures make up less than 4 percent of our overall Medicaid budget. In looking at opportunities and dilemmas presented by the Medicare and Medicaid programs for providing health care to persons who are poor and underserved, one special Medicaid opportunity comes to mind, and that's the one that Dr. Hampt discussed in some detail, and that's options to cover pregnant women and children. As she mentioned, several changes enacted by Congress in recent years have begun to unlink Medicaid from its traditional categorical associations and to open the program up to certain groups on the basis of income alone, and this is a major change. The focus of this effort, as she said, has been pregnant women and children, and I think

the different coverage groups that she mentioned are important to restate just briefly, that first was the option of covering pregnant women in infants with incomes up to 100 percent of poverty, then came the raise in that threshold to 185 percent, and last year there was a catastrophic requirement that she mentioned that mandates that states cover pregnant women in infants up to 75 percent of poverty this year, and 100 percent next year. I think it's interesting to note how states have responded to these changes. According to the National Governance Association, only five states were called by the catastrophic requirement that women in infants up to 75 percent of poverty be covered. That means all the rest of them had some provision for that already by July 1 of 1989. Twenty states have adopted income thresholds for the pregnant woman and infant group as high as 185 percent of poverty, and 24 others allowed 100 percent of poverty income threshold.

One state, Wisconsin, covers pregnant women in infants below 120 percent of poverty through a state-funded program. Along with these changes in income requirements as some other important changes that need to be noted, states have been offered opportunities to relax, Medicaid eligibility requirements for pregnant women in ways not allowed for any other group of eligible states can drop the traditional resource requirements and allow eligibility based on income alone. Forty-two states have done this. These can guarantee continuous eligibility throughout the pregnancy and for two months postpartum, even if the woman's income changes after she has declared eligible for Medicaid. Forty-one states have done this. States can even grant presumptive eligibility status to pregnant women on the day they apply for Medicaid, not requiring them to wait until their formal applications have

been processed to receive their Medicaid cards, 23 states have done this. And as far as the young child provision that she mentioned of going up to age 8, there are 38 states now that presently are phasing in coverage of young children at least up to age 5 and half of that group is going up to age 8. So I think the options that Medicaid now has for covering pregnant women and children represent major opportunities for states to extend health care to the poor and underserved. And I think it's particularly interesting how many states have taken advantage of these options. These options have been created by federal legislation, but as Dr. Hampt said, some of the same federal legislation has presented states with real dilemmas in attempting to serve the poor and underserved, all of the legislation that she mentioned described new forces on states with nursing home reform, extended eligibility for various Medicaid recipients, coverage

of Q&Bs, qualified Medicare beneficiaries, requiring Medicaid programs to buy into the Medicare programs, certain groups of eligible. In Tennessee, we estimate that implementation of the Catastrophic Act alone will cost the Medicaid program $31 million in state funds this year. For states like Tennessee to come up with this kind of revenue, there are obviously going to have to be some belt tightening somewhere. As she mentioned, it may be in other programs, other than health care programs, but it may occur in the Medicaid program with optional services or optional service limits for required services being changed. I think the one thing to mention too, as far as buying in new groups of the elderly to Medicare, that Medicaid is now buying the premium's co-insurance and deductible, is that those people who are bought in who are not eligible for Medicaid are also not eligible for

Medicaid services, and the area of greatest concern here is nursing home care, which may be generally available to qualified Medicaid beneficiaries, but is available in only certain limited circumstances to Medicare beneficiaries since intermediate care is not covered by Medicare. In conclusion, I believe it is accurate to say that recent changes in the Medicare and Medicaid program present significant opportunities and dilemmas for the provision of health care to the poor and underserved. The challenge to states has become one of making the most of the new opportunities that are available and minimizing the dilemmas that have come along with them. The challenge to those of you who care about health care for the poor and underserved is to look for ways to help government and private industry or the private sector to work together on this problem, and I look forward to the recommendations that will be coming forth

from this conference. Susan Bairt, Director of Policy and Planning Bureau of Medicaid, Nashville, Tennessee. If you have a question or comment about this program, write us. Remember views and opinions expressed on this program are not necessarily those of this station or the University of Texas at Austin. For in Black America's technical producer David Alvarez, I'm John L. Hansen Jr., please join us again next week. Cassette copies of this program are available and may be purchased by writing in Black America cassettes, Longhorn Radio Network, Communication Building V, UT Austin, Austin, Texas 78712. From the Center for Telecommunication Services, the University of Texas at Austin, this is The Longhorn Radio Network. I'm John L. Hansen Jr., join me this week on in Black America.

It also accelerated the expansion of Medicaid in terms of liberalized coverage for mothers and children and a number of changes related to low income Medicare beneficiaries. Medicaid Medicare Opportunity or Dilemma this week on in Black America.