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Malloy’s Proposal To ‘Gut’ Medicaid For Low Income Adults Will Face Opposition

by Christine Stuart | Feb 9, 2012 6:30am
(6) Comments | Commenting has expired
Posted to: Health Care, State Budget

Health care advocates and lawmakers alike are panning Gov. Dannel P. Malloy’s proposal to reduce spending on a Medicaid program for low income adults. Critics say it’s a maneuver to limit health coverage for poor people that they may have expected from a Republican administration, but not from a Democrat.

The Malloy administration argues that the Medicaid expansion the state started in 2010 under former Gov. M. Jodi Rell resulted in significantly higher costs than initially envisioned. Officials say that since federal approval of the program, the caseload has increased 60 percent from 46,156 to 74,073, “in large part due to the elimination of the asset test.”

The budget document released Wednesday suggests the state ask the federal government for a waiver to impose a $25,000 asset test on individuals who apply to the program. The asset test would exclude their primary residence and single vehicle. The administration also proposed allowing the state to apply the $25,000 asset test to the parents or guardians of anyone under the age of 26.

The Department of Social Services hinted it was moving in this direction when it submitted a concept paper to the Centers for Medicaid and Medicare Services in October.

Advocates say that’s the first time anyone has asked to apply an asset test to someone who isn’t actually receiving the services. They also accused the administration of having no idea how many individuals in the program would be impacted by the proposed changes.

But the Malloy administration says that within the first six months of the fiscal year, expenditures for those under the age of 21 in the program have grown 4.3 percent.

“The governor believes that families who can cover dependent children through private insurance should do so,” the budget states.

“It’s an effort to gut the program,” Sheldon Toubman, an attorney with New Haven Legal Aid, said. “Counting income and assets of an individual who isn’t applying to the program is a horrible idea and not acceptable under the current program.”

He said that’s why the state needs a waiver from the federal government because it would never be able to implement these measures on its own. Requiring the counting of family income against adults for whom their families have no financial responsibility is inconsistent with established Medicaid eligibility rules, he said.

The idea that it will save the state $22.5 million also doesn’t make sense to Toubman, because by 2014 the federal government will be covering 100 percent of the costs of the individuals in this program.  At the moment the state is covering 50 percent and the federal government is contributing the other 50 percent.

“I’m surprised to see the governor make a proposal that turns the clock backwards,” Toubman said. “It’s really troubling.”

He said it would create a “huge hole in the safety net.”

Rep. Peter Tercyak, who co-chairs the Human Services Committee, said he shares Toubman’s concerns.

“That’s why we have a committee process and public hearings,” Tercyak said. “We just don’t go vote the governor’s proposals up or down.”

His colleagues on two other legislative committees seem to agree.

In a Jan. 11 letter to Department of Social Services Commissioner Roderick Bremby the chairs of the Public Health, Appropriations, and Human Services Committee told him to abandon the plan to impose asset tests or any other measure that would limit access to the program.

They argue that the need to impose such limits on the program has disappeared.

Lawmakers said that since the legislature’s Office of Fiscal Analysis is not projecting a deficiency and the governor’s Office of Policy and Management is no longer projecting a deficiency, there’s no longer any need to apply for a waiver.

“Additionally we all recognize that from 2014-16 the federal government will be financing the new LIA participants at 100 percent, with a gradual reduction to 90 percent after 2016. These factors mitigate strongly against making any changes to the program now,” they wrote.

In closing lawmakers stated that “we trust, given all these factors and especially in light of OPM‘s revised DSS budget projection, that you will no longer be seeking any changes to the LIA program.”

But not only is the Malloy administration seeking changes to the low income adult program, officials also are looking to limit coverage for certain services such as nursing homes, home health, independent therapy, medical equipment, and physician services.

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(6) Comments

posted by: GoatBoyPHD | February 9, 2012  7:54am

GoatBoyPHD

Wasn’t this part of the pension reform package to help pay for those unfunded cadillac policies for retirees?

The true face of SustiNet?

Or an obvious political ploy: cut deep enough and the legislature will pass the other parts of the budget and then restore the cuts made here too. God knows, Chris Donovan knows no fiscal restraint.

My 2c. Malloy gets his education and pension contribution increases and these cuts get restored. Should the stock market falter between now and November and prohected tax revenues fall things could get ugly—on paper.

posted by: PaulG | February 9, 2012  11:21am

There’s a bigger issue here.  As of today (before most of ACA implementation), federal, state, and local governments already pay 71% of our nation’s $2.5 trillion health care bill.  We pay 12% out of pocket, and private employer-based and other private insurance pays only 17%. 
So if the state were to make this cut, who does it think is going to pick up the cost?
As the state legislators quoted in the article point out, the state ought to be embracing an opportunity for the federal government to finance 90-100% of the cost.  That’s because the alternative is that the state - or all individuals through insurance premiums, co-pays, and deductibles - will have to pay more.  That’s because the people covered by the program are already ill, and not one of them is going to get healthier by denying them access to care.

posted by: AntonK | February 9, 2012  11:33am

“Critics say it’s a maneuver to limit health coverage for poor people that they may have expected from a Republican administration, but not from a Democrat.”

I wonder who these “critics” are, why they’re not named, and in any case why a reporter would report such empty, meaningless political upchuck?

Oddly, the report states that Medicaid expanded under Rell.

posted by: Christine Stuart | February 9, 2012  4:50pm

Christine Stuart

AntonK,
The critics are named in the story, one is Sheldon Toubman the other is Peter Tercyak and the rest of the chairs of the three legislative committees who wrote the letter to Bremby which is highlighted in the article. And yes under Rell Medicaid did expand. CT was the first to take advantage of a provision of the Patient Affordable Care Act which allowed it to receive 50 percent reimbursement for these adults on Medicaid.
Thanks
Christine

posted by: NOW What? | February 9, 2012  5:32pm

To require the application of an asset test of the disabled or indigent Medicaid applicant is not in and of itself totally unreasonable - especially if a house and car are not counted. But to attempt to count the assets of a legally adult applicant’s parents or legal guardian is not only insane, it’s probably unconstitutional and an incredibly bizarre “proposal” that ABSOLUTELY must not pass - at least not without a complete court challenge. This aspect of the proposal is genuinely un-American and not worthy of ANY U.S. politician, Republican *or* Democrat.

And no, this issue has absolutely nothing to do with pensions or the long-dead “SustiNet.” It’s absolutely amazing how some people truly seem to believe that the whole world and all of its issues revolve around them or their own particular obsessions.

posted by: GoatBoyPHD | February 9, 2012  6:23pm

GoatBoyPHD

Ah yes. The Rell Savings.

Remember when Kevin Lembo ran on a platform of Medicaid savings and SustiNet and Democrats swooned when fed that lie? 

Then Malloy backed Lembo down the minute he got in office and told him stop spinning that crap: the savings were already captured by Rell not by SustiNet.

Sometimes I really like Dan Malloy.