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Demand for medical services on the rise
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BY ROBERT SWIFT
HARRISBURG BUREAU CHIEF
HARRISBURG – It’s called a budget-buster.
This is the $14 billion Medical Assistance or Medicaid program that provides comprehensive health services to nearly 2 million Pennsylvanians — low-income families, the elderly, disabled and chronically ill.
Demand for medical assistance services continues to climb even as successive governors look for ways to control program spending.
In the decade since welfare reform at the state and federal level led to a dramatic decline in the number of welfare recipients, medical assistance has emerged as the main government benefit program for low-income individuals, according to a recent study by the labor-backed Pennsylvania Budget and Policy Center.
Medical assistance is a joint federal-state program with Washington picking up 50 percent of the tab. State taxpayers pay $5.3 billion of the costs, while a $300 million transfer of state Lottery revenues and an $850 million assessment on managed care organizations, nursing homes and certain hospitals in Philadelphia also support the program.
Pennsylvania’s mounting fiscal problems — a budget deficit estimated at $1.6 billion and rising – will undoubtedly lead to more scrutiny of MA spending in the months ahead. At a budget briefing with legislative leaders earlier this month, Gov. Ed Rendell said an additional 34,400 Pennsylvanians are due to receive medical assistance during this fiscal year. Caseloads are up as more people lose jobs and health insurance and the state’s population ages.
To offset this, the administration is implementing cost-containment measures this year to save $41 million. “We are looking at everything we can do to control costs in the period going forward,” said Michael Nardone, deputy secretary of the state Department of Public Welfare, which administers the program.
One of the more effective strategies used in Northeast Pennsylvania is the Access Plus program, he said.
This involves making sure MA recipients are treated and get prescription drugs for chronic conditions like diabetes and asthma so they don’t wind up in hospital emergency rooms.
“We make sure people get medicines and avoid hospital stays,” said Nardone.
The difficulty in tackling MA costs is illustrated by the scope of needs addressed by the program.
Medical assistance seeks to help low-wage workers who don’t have health insurance through their jobs or can’t afford monthly premiums and individuals with disabilities and chronic needs who can’t find private insurers. It helps the elderly who need long-term care in nursing homes, their own home or through a community program.
More than half, or 1.1 million, of MA recipients are members of low-income families, 21 percent are disabled, 14 percent are elderly and 5 percent are chronically ill low-income adults with no children.
Yet, program costs break down differently.
While the elderly and disabled represent one-third of MA recipients, they account for more than two-thirds of spending, according to a House Appropriations Committee analysis. Low-income families make up 60 percent of recipients, yet account for less than one-fourth of spending.
This is a key factor in the annual battle over MA reimbursements to nursing homes for care of the elderly and disabled.
The current budget provides a $16.4 million or 1 percent increase in reimbursement rates to nursing homes and funding to expand community alternatives to nursing home care for 2,100 seniors.
This resulted after a contentious debate last spring between Rendell and a coalition of nursing care providers over funding priorities.
Rendell initially proposed a flat reimbursement rate for the nursing homes saying the time had come to provide more state funding for home-based health care nurses.
The governor has defended his record of increasing the reimbursement rate by 22 percent since he took office in 2003, but nursing home operators say the aid doesn’t cover the cost of providing intensive care to the elderly.
The reimbursement doesn’t reflect the cost to nursing homes of food, medicine, energy, and even linens, said Stuart Shapiro, president of the Pennsylvania Health Care Association.
Shapiro and others involved with the medical assistance issue hope Washington comes to the rescue, like it did in 2003.
Experts hope that the national economic stimulus package called for by President-elect Barack Obama will provide a temporary increase in federal aid to states to cover medical assistance costs as a way to keep the safety net from breaking.
“This will be a big piece of closing the (state) budget gap,” said Beth Balaban, an analyst for House Appropriations Chairman Dwight Evans, D-203.
This is the $14 billion Medical Assistance or Medicaid program that provides comprehensive health services to nearly 2 million Pennsylvanians — low-income families, the elderly, disabled and chronically ill.
Demand for medical assistance services continues to climb even as successive governors look for ways to control program spending.
In the decade since welfare reform at the state and federal level led to a dramatic decline in the number of welfare recipients, medical assistance has emerged as the main government benefit program for low-income individuals, according to a recent study by the labor-backed Pennsylvania Budget and Policy Center.
Medical assistance is a joint federal-state program with Washington picking up 50 percent of the tab. State taxpayers pay $5.3 billion of the costs, while a $300 million transfer of state Lottery revenues and an $850 million assessment on managed care organizations, nursing homes and certain hospitals in Philadelphia also support the program.
Pennsylvania’s mounting fiscal problems — a budget deficit estimated at $1.6 billion and rising – will undoubtedly lead to more scrutiny of MA spending in the months ahead. At a budget briefing with legislative leaders earlier this month, Gov. Ed Rendell said an additional 34,400 Pennsylvanians are due to receive medical assistance during this fiscal year. Caseloads are up as more people lose jobs and health insurance and the state’s population ages.
To offset this, the administration is implementing cost-containment measures this year to save $41 million. “We are looking at everything we can do to control costs in the period going forward,” said Michael Nardone, deputy secretary of the state Department of Public Welfare, which administers the program.
One of the more effective strategies used in Northeast Pennsylvania is the Access Plus program, he said.
This involves making sure MA recipients are treated and get prescription drugs for chronic conditions like diabetes and asthma so they don’t wind up in hospital emergency rooms.
“We make sure people get medicines and avoid hospital stays,” said Nardone.
The difficulty in tackling MA costs is illustrated by the scope of needs addressed by the program.
Medical assistance seeks to help low-wage workers who don’t have health insurance through their jobs or can’t afford monthly premiums and individuals with disabilities and chronic needs who can’t find private insurers. It helps the elderly who need long-term care in nursing homes, their own home or through a community program.
More than half, or 1.1 million, of MA recipients are members of low-income families, 21 percent are disabled, 14 percent are elderly and 5 percent are chronically ill low-income adults with no children.
Yet, program costs break down differently.
While the elderly and disabled represent one-third of MA recipients, they account for more than two-thirds of spending, according to a House Appropriations Committee analysis. Low-income families make up 60 percent of recipients, yet account for less than one-fourth of spending.
This is a key factor in the annual battle over MA reimbursements to nursing homes for care of the elderly and disabled.
The current budget provides a $16.4 million or 1 percent increase in reimbursement rates to nursing homes and funding to expand community alternatives to nursing home care for 2,100 seniors.
This resulted after a contentious debate last spring between Rendell and a coalition of nursing care providers over funding priorities.
Rendell initially proposed a flat reimbursement rate for the nursing homes saying the time had come to provide more state funding for home-based health care nurses.
The governor has defended his record of increasing the reimbursement rate by 22 percent since he took office in 2003, but nursing home operators say the aid doesn’t cover the cost of providing intensive care to the elderly.
The reimbursement doesn’t reflect the cost to nursing homes of food, medicine, energy, and even linens, said Stuart Shapiro, president of the Pennsylvania Health Care Association.
Shapiro and others involved with the medical assistance issue hope Washington comes to the rescue, like it did in 2003.
Experts hope that the national economic stimulus package called for by President-elect Barack Obama will provide a temporary increase in federal aid to states to cover medical assistance costs as a way to keep the safety net from breaking.
“This will be a big piece of closing the (state) budget gap,” said Beth Balaban, an analyst for House Appropriations Chairman Dwight Evans, D-203.
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