Blunt’s health insurance plan widely criticized
State Rep. Doug Ervin, who sponsored last year’s major overhaul of state group health insurance laws, looked exasperated when talking about Gov. Matt Blunt’s pending plan for improving health care access in Missouri.
Ervin, a Republican from Kearney, had just spent hours in hearings on Blunt’s Insure Missouri plan. Twenty-two days of more testimony about the plan, spread over six legislative weeks, awaited Ervin.
“This is all about November,” Ervin told the CBT, referring to Blunt’s reelection bid. Days later, however, Blunt announced he will not run again.
Republicans and Democrats in the General Assembly are attacking the motivation and the mechanics of the Insure Missouri plan, and while the third phase of the plan is designed to help small businesses with group health insurance costs, the assessment from business associations is unenthusiastic.
“It’s fair to say that [Insure Missouri] has got opposition to it on both sides,” said Rep. Judy Baker, a Columbia Democrat who likely will run for Congress. “To me, it’s like government is trying to start a large program without legislative review or oversight. Their own members are right on that.”
The night after Ervin voiced criticism of the plan, Blunt outlined its virtues during his annual State of the State message.
He characterized Insure Missouri as an attempt to make “health insurance more affordable for working Missourians. Unlike proposals that want to go back in time, Insure Missouri comes without a tax hike.”
Blunt has said the first phase of the plan, scheduled to begin in March, would cost $20 million in state funds and cover 54,000 working parents, while the second and third phases, which require the Legislature’s approval, would cost less than $50 million annually in state funds.
The new program would provide access to health care for about one-fourth of uninsured Missourians.
The Blunt administration projects that 28,000 workers at small companies would gain health coverage under Insure Missouri at a time when fewer firms are offering health benefits.
Attorney General Jay Nixon, who delivered the Democratic response to Blunt’s address, reminded the public that Blunt and fellow Republicans have eliminated Medicaid coverage for 100,000 citizens and reduced services for 300,000 more since 2005: “We Democrats are putting forward a plan to restore these devastating health care cuts to every single Missourian who had their health coverage or benefits slashed. This is our top priority.”
Nixon said Insure Missouri would not reinstate care for sympathetic groups such as the elderly, the disabled and 127,000 children who lost coverage three years ago.
Republicans lead charge against Insure Missouri
But much of the noise in the Capitol halls is coming from fellow Republicans, and for reasons that differ from the Democrats’. Particularly on the House side, many GOP members thought Insure Missouri essentially repudiated what they voted to do in 2005—actions that they had defended in elections as having rid the rolls of Medicaid abusers. Others believed the project ran afoul of how they voted on overhauling Medicaid last year.
Rep. Ed Robb, the House Budget Committee vice chair from Columbia, added that major problems
lay in the Blunt administration’s presentation of the program. “I think it is the lack of confidence in the marketing of the program and how much it is going to cost,” he said.
Other, more conservative Republicans balk at establishing a program that shortly will consume $1 billion a year, although much of that comes from federal and other nonstate sources.
Republican Rep. Rob Schaaf, a St. Joseph doctor who chairs the Special Committee on Healthcare Transformation that Ervin joined this year, flatly said after the first week of hearings that the Blunt administration “lacks the legal authority” to proceed with the plan. Schaaf said Blunt never could have obtained House approval of his proposal last year, so it was dropped in favor of the smaller pilot programs.
By week’s end, House GOP leaders were attempting to arrange a caucus and regroup on the governor’s major initiative for 2008.
Democrats face political brambles, too
Like Republican House members, Democrats encounter a political thicket that finds their objectives conflicting with the campaigns that lie ahead.
As supporters of major public health programs, Democrats are usually allied with advocacy groups for the chronically and seriously ill, who largely are backing Blunt’s plan. If anything comes to a vote this spring, Blunt’s plan at least represents an expansion of care to almost 200,000 people, or more than the number who lost services in the 2005 cutbacks.
But such a vote would undermine Nixon’s campaign for governor.
Baker, who supports the party on adding coverage of children, the elderly and the disabled, said the dilemma on Insure Missouri dramatizes the need for a “less politicized process. I don’t care what party is in the governor’s office. We end up with election-year health care.”
She is sponsoring legislation that would create a Missouri Health Policy Authority, which would establish a group of health-care professionals to chart and recommend changes in government health programs.
Schaaf: legislature never intended to approve Insure Missouri
Schaaf said he was forced to review “legislative intent” on whether the Blunt program was authorized. When the Senate initially approved the Medicaid overhaul last year, it included language that allowed Missouri to begin a statewide “premium offset” plan that provided private health coverage to the low-income uninsured—similar to Insure Missouri.
Schaaf, who handled the legislation in the House, then objected that his House colleagues would defeat the bill—for many reasons, usually financial. He argued—and Senate handlers agreed—that the language should authorize only two pilot projects, one urban and one rural, that were contained in the final legislation.
But Blunt set aside the notion of the pilot programs in favor of statewide access when he announced Insure Missouri in mid-September.
Deborah Scott, director of the Missouri Department of Social Services, said the staff there decided to use wording in the state appropriations bill last year—rather than the regular Medicaid law—to authorize Insure Missouri because it had broader terms. That bill, however, expires in June, and anything that Blunt has proposed must be approved again this spring.
Although longstanding precedents disallow the use of funding bills to authorize ongoing programs— not to mention entitlement programs— Scott said that approach was preferable because the technocrats could fine-tune Insure Missouri before the legislature actually enacted it. Schaaf, among others, objected strongly because legislators are supposed to authorize programs.
“I sat through 54 hours of hearings” on the Medicaid overhaul last year, and “I hadn’t heard anything” about Insure Missouri, let alone voted to authorize it, said Mike Talboy, a Kansas City Democrat whose father is a Jackson County doctor.
Colleagues of Schaaf, who also sits on the budget committee, said he is committed to blocking authority for Insure Missouri in future funding bills, which begin in the House. But Schaff stopped short of such a defiant approach. “You can’t say I will kill Insure Missouri. I wouldn’t say it was doomed in the House. I cannot speak for all members of the committee,” Schaaf said. “As committee chair, I lead but I will not dictate.
“You could tell there’s a lot of tension on our committee. A lot of members thought the legislature has been left out of the process.”
Schaaf held out the possibility that his healthcare committee could redesign the Insure Missouri program from scratch over the next six weeks.
He pondered aloud whether a group or individual would take on a court challenge to the program and its legality.
Peering into the future of Insure Missouri becomes difficult because no authorizing legislation has been filed. Despite the broad ranging review that Schaaf’s committee will give to health insurance, the uninsured and possible insurance-crisis solutions, it has no vehicle yet if it wants to slightly revise or completely reshape Insure Missouri.
Federal authorities approve Insure Missouri
Despite serious doubts about its legality, Insure Missouri progressed on several fronts this month. The state received notice Jan. 14 that the federal Centers for Medicaid and Medicare Services had approved changes in the state Medicaid plan to begin the program.
On Jan. 16, the state received bids from insurance companies on offering the plans and is expected to approve at least two in each of seven regions of Missouri. The department also filed rules that begin the formal comment phase.
The program offers hospital care, doctor visits, other health professionals’ services, drugs, emergency care, home health care, mental health services and durable medical equipment. Not included is non-emergency medical transportation that could pose difficulties in rural areas, although working adults likely would have transportation.
The program is designed to exclude most high-risk, high-cost groups, such as the disabled and the elderly, concentrating on working parents.
The Blunt administration has divided Insure Missouri into three phases:
• Phase 1 offers health care for working parents and caregivers who make up to the federal poverty level, or $20,650 for a family of four. The state plans to begin accepting applications next month and offering services for the first phase of Insure Missouri on March 14. This phase is expected to cover more than 54,000 working parents, or slightly more than half those who lost coverage in 2005.
• Phase 2 will cover working parents, caretakers and childless adults with incomes up to 185 percent of the federal poverty level by 2012. The department expects eligibility up to 120 percent in fiscal 2009 with the incomes then rising to 185 percent or 108,000 persons by 2012. The program allows the state to cap and set waiting lists for enrollees if the demand exceeds available funds. Blunt’s budget says he plans to spend $347 million on this phase next year.
• Phase 3, of the most interest to businesses and their workers, would help small companies with the cost of group health insurance. One route for assistance could come in a reinsurance mechanism under which the state would pay for catastrophic claims—or those above $20,000, for example—in companies with 25 or fewer workers and lower the cost of such coverage. Democrat John Kerry proposed such a plan in the 2004 presidential election.
The Blunt administration expects more than 28,000 employees to get coverage under this part of the plan, which needs legislative authorization. It, too, is subject to caps, and Scott said the administration has included little funding for the coming year.
The interest among business groups? “Not much enthusiasm,” said Brad Jones, director of the National Federation of Business-Missouri. That also sums up the conclusion of Ervin, who noted that a similar private insurance effort for small employers in Kansas City has managed to attract only five clients. “The small businesses were not interested in that,” Ervin said.
Lobbyists for business groups noted that their interests often dwell on the effect that caring for the uninsured has on insurance costs for their own employees, known as “cost-shifting.” Hospitals generally inflate costs to compensate for care they provide for the uninsured. The Missouri Hospital Association figured prominently in Blunt’s design for Insure Missouri.
The pricetag for the entire program? Almost $1 billion by 2012—including funds from state general revenue, federal Medicaid dollars, the hospital tax that is used to provide state matching funds for Medicaid and premiums from businesses and employees, which would rise to almost $100 million each within four years