Stephen's secret attack on Medicaid

Health and Human Services Commissioner wants to discuss his ideas in Washington, but not in N.H.

November 19, 2004

By Jonathan Baird
Member, New Hampshire Child Advocacy Network steering committee

If something seems too good to be true, it probably is. Such is the case with Health and Human Services Commissioner John Stephen's Medicaid modernization plan, now known as Granite Care. The plan promises much more than it can deliver while it obscures significant flaws.

According to Stephen, his plan will save New Hampshire taxpayers $280 million over five years. At the same time, he says his plan will result in no cuts in Medicaid eligibility or funding.

To buy what Stephen is selling, you have to believe in Santa Claus and the Easter Bunny. It does not stand to reason that you can save millions of dollars without big cuts in eligibility or funding.

Stephen's plan is a massive undertaking. When he appeared before the Joint Legislative Fiscal Committee on Nov. 10, he unveiled a document of 70-plus pages. Even members of the committee had never seen the plan before.

Stephen now asks the committee to allow the state to begin negotiating with federal officials about the details of the plan. The committee has scheduled a vote next Wednesday to determine whether Stephen's plan will move forward with the federal government.

We do not need to be in such a hurry. The fiscal committee should not allow the plan to go forward now. Before the plan goes to Washington, D.C., it should come to New Hampshire. Given the importance of Medicaid to so many, the plan should be subject to a public process like any other bill introduced in the Legislature.

We deserve at least one statewide public hearing where anyone can respond to the plan's details. These comments should be considered by legislators.

Ordinarily, an ambitious bill, like this plan, would require a fiscal impact statement. To date, the commissioner has produced no fiscal impact statement explaining costs and consequences. Surely the committee should demand this. Such a mega-plan as Granite Care should explain its fiscal impact. The public should have an opportunity to respond to that as well.

Without even a minimum opportunity for a public hearing, it would be a clear mistake to start negotiating with federal officials. Probably the most offensive part of the Medicaid modernization process has been its secrecy. Before the plan proceeds, the public must have an opportunity to read, digest and respond to it.

Medicaid is an extraordinarily complex program. At least one federal judge has described it as Byzantine. Different provisions of a complicated plan could easily provoke a multitude of responses. This is all the more reason to create a local public process.

Problems

Consider just a few major concerns.

Stephen's plan puts the long-range interests of our state at risk by capping federal payments. Currently, the federal government shares all Medicaid costs. Stephen proposes a waiver and says it is not a block grant. He's playing a linguistic game. All such waivers impose a cap on federal payments, and a cap shifts the risk of higher costs from the federal government to the state general fund.

In a paper prepared for the Endowment for Health, Professor Cindy Mann of Georgetown University describes this concern in depth. By agreeing to a federal cap, costs would likely be shifted to state, county and local taxpayers. Contrary to Stephen's argument, after a state agrees to a federal cap, it has little leverage in renegotiating the terms of the waiver.

Stephen also proposes to scrap the highly successful Healthy Kids program in favor of untested health savings accounts. He says he will reduce nursing home beds 30 percent when demographics show a large increase in elderly age 85 or older. He implies he will make adult children responsible for the cost of their parents' nursing home care.

The larger picture is not reassuring for Medicaid recipients. Hidden behind buzzwords like competition, personal responsibility and consumer empowerment is the reality that Stephen's effort has been driven by cost-cutting.
He has consistently promoted the misleading impression that Medicaid must be reformed due to the loss of $100 million in federal payments over the upcoming biennium. What he has failed to explain is that the $100 million that will be lost would not have been used to pay for Medicaid services.

Whatever good ideas exist in Granite Care, they have been packaged in the context of a waiver which would be bad for the state. We do need discussion about Medicaid reform, but Stephen's plan should come to New Hampshire before it goes to Washington.

If the plan is as good as he says, he should have nothing to fear from letting people here engage it.

Jonathan Baird lives in Wilmot and works for New Hampshire Legal Assistance.