GraniteCare will put NH families between a rock and a hard place

October 25, 2004

By Ellen Shemitz
President
Children's Alliance of NH

The Dept. of Health and Human Services' proposal to enroll poor families in "health services accounts" is bad news for children. The proposal is but the latest example of the shift-and-shaft philosophy of government -- shift the cost of essential services off of the state, and shaft the communities, service providers and families who will bear the cost.

It is also yet another attempt to pick apart one of New Hampshire's success stories, its Healthy Kids insurance program.

The "GraniteCare" plan to reduce New Hampshire's Medicaid spending was outlined in a confidential concept paper sent by Gov. Benson to officials in Washington last month and recently reported by the news media. It would establish health services accounts that limit health care payments for pregnant women and children whose families earn more than 133 percent of the federal poverty line.

While some pieces of the proposal may reduce health care costs -- parents will be encouraged to get preventive medical and dental care for their children, and to seek care from doctor's offices instead of emergency rooms -- much of it will not. Rather than reducing the cost of care, it shifts that cost and shafts not only low-income families, but also New Hampshire's taxpayers, employers and health care consumers. Here's why:

1. It targets families who don't have one dollar to spend on health care.

These are families who earn as little as $16,612 a year. They cannot afford food, clothing, child care and rent. They have zero money to spend on prescriptions and doctor's visits. A livable wage study three years ago found that New Hampshire families needed to earn nearly twice the poverty level just to pay for basic expenses -- excluding health care.

Recognizing that these families may otherwise not seek medical care until it becomes an emergency, the current NH Healthy Kids Gold insurance program provides them with full coverage at no cost.

2. GraniteCare will encourage some parents not to get routine medical treatment for their children.

Under the state plan would create individual health budgets for children in families at 133 percent of poverty and up. Minimal prevention would be covered (for a 2-year-old, one office visit, one lead screening test, eight vaccinations and one dentist visit). Otherwise, a parent will be told how much a child's medical care should cost for a year, and that's how much the parent will have to spend. At the end of the year, parents who have not spent all of the money in the account and who have met the prevention guidelines will get some of the unspent funds, presumably in cash.

This creates a tremendous incentive for poor parents not to get medical care for their children, beyond the paid-for preventive visits. Making them choose between visiting a doctor and getting a prescription to treat an ear infection, or receiving a check that might keep them from being evicted is unconscionable.

Parents who are well informed and well meaning will make good choices for their children. However, many parents are not informed about health care. Poor choices will be made, and children will suffer.

3. It's unclear whether children's “individual health budgets” will reflect their individual health needs or be based on an actuarial estimate.

Ignoring pre-existing health needs when determining a child's health budget would be ludicrous. With the exception of the occasional ear infection, childhood disease and the flu, most kids are pretty healthy. If a child's health budget is determined by insurance risk data instead of that child's unique health status and needs, parents of kids with chronic conditions such as asthma or diabetes, who have cancer, or who are unlucky enough to need surgery will always overspend their budgets.

4. GraniteCare would put a new layer of bureaucracy between patients and emergency care.

The proposal seeks to cut in half what the state pays for catastrophic care by creating a separate funding pool. Bureaucrats will decide whether doctors should be reimbursed for the emergency treatment they have already provided.

Doctors and hospitals must provide urgent and emergency treatment, whether or not the state wants to pay for it. Poor families aren't going to able to pay for it. The providers will be left holding the bag, but not for long! Which brings us back to ….

5. The shift and shaft: Health care consumers and employers -- you -- will pay.

Medicaid is a federal-state program to which all taxpayers contribute, so its cost is spread as wide and as thin as possible. GraniteCare would attempt to shift much of that cost onto medical providers and onto the families who can least afford it -- including the parents of approximately 12,000 children covered by Healthy Kids Gold.

The shift won't end there, however. Underinsured families take a wait-and-see approach to sickness, hoping to avoid or delay needed care. In the meantime, the illness or injury often becomes more extensive and expensive to treat.
With low government reimbursement rates already squeezing medical providers -- New Hampshire's Medicaid program pays providers about 45 percent of what they'd get from managed care insurance -- that higher-care cost becomes higher insurance premiums for employers and employees.

Spreading higher medical costs among a smaller pool of payers -- employers, working people and poor families -- is not wise public policy.

GraniteCare? The plan sounds more like Rock and a Hard Place.

Go to the Disabilities Rights Center's Web site to read the "GraniteCare" concept paper.