[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
STRENGTHENING MEDICAID AND PRIORITIZING THE MOST VULNERABLE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTH
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 1, 2017
__________
Serial No. 115-2
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
_________
U.S. GOVERNMENT PUBLISHING OFFICE
24-766 WASHINGTON : 2018
COMMITTEE ON ENERGY AND COMMERCE
GREG WALDEN, Oregon
Chairman
JOE BARTON, Texas FRANK PALLONE, Jr., New Jersey
Vice Chairman Ranking Member
FRED UPTON, Michigan BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
TIM MURPHY, Pennsylvania ELIOT L. ENGEL, New York
MICHAEL C. BURGESS, Texas GENE GREEN, Texas
MARSHA BLACKBURN, Tennessee DIANA DeGETTE, Colorado
STEVE SCALISE, Louisiana MICHAEL F. DOYLE, Pennsylvania
ROBERT E. LATTA, Ohio JANICE D. SCHAKOWSKY, Illinois
CATHY McMORRIS RODGERS, Washington G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky JOHN P. SARBANES, Maryland
PETE OLSON, Texas JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia PETER WELCH, Vermont
ADAM KINZINGER, Illinois BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia PAUL TONKO, New York
GUS M. BILIRAKIS, Florida YVETTE D. CLARKE, New York
BILL JOHNSON, Ohio DAVID LOEBSACK, Iowa
BILLY LONG, Missouri KURT SCHRADER, Oregon
LARRY BUCSHON, Indiana JOSEPH P. KENNEDY, III,
BILL FLORES, Texas Massachusetts
SUSAN W. BROOKS, Indiana TONY CARDENAS, California
MARKWAYNE MULLIN, Oklahoma RAUL RUIZ, California
RICHARD HUDSON, North Carolina SCOTT H. PETERS, California
CHRIS COLLINS, New York DEBBIE DINGELL, Michigan
KEVIN CRAMER, North Dakota
TIM WALBERG, Michigan
MIMI WALTERS, California
RYAN A. COSTELLO, Pennsylvania
EARL L. ``BUDDY'' CARTER, Georgia
Subcommittee on Health
MICHAEL C. BURGESS, Texas
Chairman
BRETT GUTHRIE, Kentucky GENE GREEN, Texas
Vice Chairman Ranking Member
JOE BARTON, Texas ELIOT L. ENGEL, New York
FRED UPTON, Michigan JANICE D. SCHAKOWSKY, Illinois
JOHN SHIMKUS, Illinois G.K. BUTTERFIELD, North Carolina
TIM MURPHY, Pennsylvania DORIS O. MATSUI, California
MARSHA BLACKBURN, Tennessee KATHY CASTOR, Florida
CATHY McMORRIS RODGERS, Washington JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia KURT SCHRADER, Oregon
GUS M. BILIRAKIS, Florida JOSEPH P. KENNEDY, III,
BILLY LONG, Missouri Massachusetts
LARRY BUCSHON, Indiana TONY CARDENAS, California
SUSAN W. BROOKS, Indiana ANNA G. ESHOO, California
MARKWAYNE MULLIN, Oklahoma DIANA DeGETTE, Colorado
RICHARD HUDSON, North Carolina FRANK PALLONE, Jr., New Jersey (ex
CHRIS COLLINS, New York officio)
EARL L. ``BUDDY'' CARTER, Georgia
GREG WALDEN, Oregon (ex officio)
C O N T E N T S
----------
Page
Hon. Michael C. Burgess, a Representative in Congress from the
State of Texas, opening statement.............................. 1
Prepared statement........................................... 3
Hon. Gene Green, a Representative in Congress from the State of
Texas, opening statement....................................... 4
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, opening statement...................................... 6
Prepared statement........................................... 8
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 9
Witnesses
Avik S. A. Roy, President, Foundation for Research on Equal
Opportunity.................................................... 11
Prepared statement........................................... 14
Answers to submitted questions \1\........................... 125
John McCarthy, CEO of Upshur Street Consulting................... 27
Prepared statement........................................... 29
Answers to submitted questions \2\........................... 127
Judith Solomon, Vice President, Center on Budget and Policy
Priorities..................................................... 38
Prepared statement........................................... 40
Answers to submitted questions............................... 130
Submitted Material
Study entitled, ``The Impact of Medicaid Expansions on
Mortality,'' Harvard School of Public Health, December 22,
2014, \3\ submitted by Mr. Green............................... 55
Congressional Research Service memorandum, January 30, 2017, \4\
submitted by Mr. Guthrie....................................... 59
Statement of the National Coalition on Health Care, submitted by
Ms. Castor..................................................... 93
Statement of the Asian & Pacific Islander American Health Forum,
submitted by Ms. Castor........................................ 95
Statement of AARP, submitted by Ms. Castor....................... 101
Statement of the Save Medicaid in the Schools Coalition,
submitted by Ms. Castor........................................ 105
Statement of the Association of American Medical Colleges,
submitted by Ms. Castor........................................ 109
Statement of Governor Charles D. Baker, Commonwealth of
Massachusetts, submitted by Mr. Kennedy........................ 112
Statement of 3M, submitted by Mr. Shimkus........................ 121
----------
\1\ Mr. Roy did not submit a response to questions for the
record.
\2\ Mr. McCarthy did not submit a response to questions for the
record.
\3\ The information can be found at: https://docs.house.gov/
meetings/IF/IF14/20170201/105498/HHRG-115-IF14-20170201-
SD006.pdf.
\24\ The information can be found at: https://docs.house.gov/
meetings/IF/IF14/20170201/105498/HHRG-115-IF14-20170201-
SD003.pdf.
STRENGTHENING MEDICAID AND PRIORITIZING THE MOST VULNERABLE
----------
WEDNESDAY, FEBRUARY 1, 2017
House of Representatives,
Subcommittee on Health,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:00 a.m., in
room 2123 Rayburn House Office Building, Hon. Michael Burgess
(chairman of the subcommittee) presiding.
Present: Representatives Burgess, Guthrie, Barton, Upton,
Shimkus, Murphy, Blackburn, McMorris Rodgers, Lance, Griffith,
Bilirakis, Long, Bucshon, Brooks, Mullin, Hudson, Collins,
Carter, Walden (ex officio), Green, Engel, Schakowsky,
Butterfield, Matsui, Castor, Sarbanes, Lujan, Schrader,
Kennedy, Cardenas, Eshoo, DeGette, and Pallone (ex officio).
Also present: Representatives Flores and Ruiz.
Staff present: Ray Baum, Staff Director; Mike Bloomquist,
Deputy Staff Director; Elena Brennan, Legislative Clerk,
Oversight and Investigation; Karen Christian, General Counsel;
Jordan Davis, Director of Policy and External Affairs; Paige
Decker, Executive Assistant and Committee Clerk; Paul Edattel,
Chief Counsel, Health; Blair Ellis, Digital Coordinator/Press
Secretary; Caleb Graff, Policy Advisor; Jay Gulshen,
Legislative Clerk, Health; Zach Hunter, Director of
Communications; Peter Kielty, Deputy General Counsel; Katie
McKeough, Press Assistant; James Paluskiewicz, Professional
Staff, Health; Mark Ratner, Policy Coordinator; Jennifer
Sherman, Press Secretary; Josh Trent, Deputy Chief Health
Counsel, Health; Luke Wallwork, Staff Assistant; Jeff Carroll,
Minority Staff Director; Tiffany Guarascio, Minority Deputy
Staff Director and Chief Health Advisor; Olivia Pham, Minority
Health Fellow; Rachel Pryor, Minority Health Policy Advisor;
Samantha Satchell, Minority Policy Analyst; Andrew Souvall,
Minority Director of Communications, Outreach and Member
Services; C.J. Young, Minority Press Secretary.
Mr. Burgess. My gosh, everything is new up here. I have got
all kinds of buttons. I can actually silence you, Mr. Green, if
I need to.
Mr. Green. Mr. Chairman, you know I don't need a mike.
OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS
Mr. Burgess. Well, I want to welcome everyone of course
back to the 2123. It is the best room in the Rayburn Building.
Welcome you to the first Subcommittee of Health hearing for
this year. It is likely to be a very active term in the United
States Congress on health care.
There are members of the full committee who have asked to
waive onto this committee for the purposes of this hearing, so
I will ask unanimous consent for Dr. Ruiz when he gets here,
but right now I will ask for unanimous consent for Mr. Flores
to be on this committee. Without objection, so ordered.
I will recognize myself 5 minutes for the purpose of an
opening statement. Medicaid, a state and federal partnership
designed as a safety net for the country's most vulnerable has
grown at a very rapid rate. Today's Medicaid program is three
times larger by enrollment and by spending than it was in 1997
under President Bill Clinton. This safety net program will
cover up to 98 million people this year and will cost the
taxpayers more than $600 billion.
As a physician I have had the privilege of providing health
care for hundreds of Medicaid patients. I have looked into
their eyes, I have listened to their concerns, I have held
their hands, I have delivered their babies, and I know of their
stories. Now I have the privilege of trying to help many
patients like this by holding this chair and by working with
each of you on the subcommittee and the full committee to
improve and modernize the Medicaid program.
As we embark on a new Congress together, while I know we
will have real differences, I hope we can agree on some shared
goals to improve the Medicaid program to provide access and
high quality care to those who truly need it. Today we will
start by examining targeted common sense steps that can be
taken to cut states' cost and prioritize care for vulnerable
patients who are awaiting access to Medicaid services.
One of the bills we will consider addresses an area of
concern that states have repeatedly requested to Congress that
they examine. Individuals seeking Medicare coverage for long-
term care must have assets below established thresholds to be
eligible. Medicaid's treatment of married couples' resources
has resulted in a loophole that allows the community spouse to
shield assets by purchasing an annuity that is not counted
against asset thresholds.
Representative Mullin has written the Close Annuity
Loopholes in Medicaid Act to put a stop to this gaming of the
system. His bill would make half of the income generated from
an annuity purchased by a community spouse within the 60-month
look-back period that would count toward the institutionalized
spouse's financial eligibility.
Another bill we will consider today originated with the
state emailing the committee to express a concern. The
Affordable Care Act required states to use the modified
adjusted gross income for income calculations for determining
Medicaid eligibility. Eligibility for Medicaid applicants is
based on a monthly household income. Irregular income received
as a lump sum such as a lottery or gambling winning, one-time
gifts or inheritance is counted as income only in the month
received. This means that lottery winners have been allowed to
retain taxpayer-financed Medicaid coverage.
Representative Upton's bill would close this loophole. This
bill would require states to consider monetary winnings from
lotteries as if they were obtained over multiple months for the
purposes of determining eligibility. This provides a scalable
approach so individuals with high-dollar winnings are kept off
the program for an appropriate time.
Finally, each of these bills we are considering allocate
some portion of the dollars saved into the Medicaid Improvement
Fund to be used for the purposes of improving access to care
for the vulnerable and needy individuals currently on Medicaid
waiting lists.
While we will have additional hearings on Medicaid in the
weeks and months to come, this hearing is focused on narrow
issues and will cover bills that have been introduced in prior
congresses. We all agree that it is important to secure care
and keep our commitment to vulnerable Americans; I hope that we
can begin by taking these small steps forward to put Medicaid
spending on a sustainable path.
I would now like to yield the remaining time to
Representative Flores to speak about his bill that we will be
considering today.
[The statement of Mr. Burgess follows:]
Prepared statement ofHon. Michael C. Burgess
The Subcommittee will come to order.
The Chairman will recognize himself for an opening
statement.
Medicaid-a state-federal partnership designed as a safety
net for the most vulnerable-has grown at a rapid rate. Today's
Medicaid program is three times larger-by enrollment and
spending-than it was in 1997 under President Bill Clinton. This
safety-net program will cover up to 98 million people this
year, and will cost taxpayers more than $600 billion. \1\
---------------------------------------------------------------------------
\1\ https://www.cms.gov/Research-Statistics-Data-and-Systems/
Statistics-Trends-and-Reports/NationalHealthExpendData/
NationalHealthAccountsProjected.html.
---------------------------------------------------------------------------
As a physician, I have had the privilege of actually
providing health care for hundreds of Medicaid patients. I have
looked in their eyes, I have listened to their concerns, I have
held their hands, and I know many of their stories. Now I have
the privilege of trying to help many patients like this, by
holding this Chair and by working with each of you to improve
and modernize the Medicaid program. As we embark on this new
Congress together, while I know we will have real differences,
I hope we can agree on our shared goal: to improve the Medicaid
program to provide access to high-quality care for those who
truly need it.
Today we will start by examining targeted, commonsense
steps that can be taken to cut states' costs, and prioritize
care for vulnerable patients who are waiting to access Medicaid
services.
One of the bills we will consider addresses an area of
concern states have repeatedly requested Congress examine.
Individuals seeking Medicaid coverage for long-term care must
have assets below established thresholds to be eligible.
Medicaid's treatment of married couples' resources has resulted
in a loophole that allows the community spouse to shield assets
by purchasing an annuity that is not counted against current
asset thresholds. Representative Mullin has authored the Close
Annuity Loopholes in Medicaid Act, to put a stop to this gaming
of the system. His bill would make half of the income generated
from an annuity purchased by a community spouse within the 60-
month lookback period countable towards the institutionalized
spouse's financial eligibility.
Another bill we will consider today originated with a State
emailing the Committee to express a concern. The ACA required
states to use Modified Adjusted Gross Income (MAGI) for income
calculations for determining Medicaid eligibility. Under MAGI,
eligibility for Medicaid applicants is based on monthly
household income. Irregular income received as a lump sum, such
as lottery or gambling winnings, one-time gifts, or
inheritances, is counted as income only in the month received.
This means that lottery winners are been allowed to retain
taxpayer-financed Medicaid coverage.
Representative Upton's bill would close this loophole. This
bill would require states to consider monetary winnings from
lotteries as if they were obtained over multiple months for
purposes of determining eligibility. This provides a scalable
approach so individuals with high-dollar winnings are kept off
the program for an appropriate time.
Finally, each of these bills we are considering allocate
some portion of the dollars saved in to the Medicaid
Improvement Fund, to be used for the purpose of improving
access to care for the vulnerable and needy individuals
currently on Medicaid waiting lists.
While we will have additional hearings on Medicaid in the
weeks and months to come, this hearing is focused on narrow
issues and will cover bills that have been introduced in prior
Congresses. We all agree that it is important to secure care
and keep our commitment to vulnerable Americans. I hope that we
can begin by taking these small steps forward to put Medicaid
spending on a sustainable path.
With that, I'll yield to Representative Flores to speak
about his bill, which we will be considering today.
Mr. Flores. Thank you for yielding, Chairman Burgess.
Chairman Burgess and Ranking Member Green, thank you for having
me here this morning for this important hearing. I appreciate
the opportunity to work with you to strengthen Medicaid and
prioritize health care for our most vulnerable citizens. I also
want to thank each of our witnesses for being here today. It is
crucial that we work to identify and prioritize the populations
that stand to benefit most from reform to our current health
care system.
Today a growing number of hardworking Americans are on
Medicaid enrollment waiting lists in all 50 states. At the same
time, other populations who do not qualify are enrolling in
Medicaid and hurting access for our nation's truly vulnerable
populations. The Verify Eligibility for Coverage Act before us
this morning addresses this issue. This bill prioritizes our
neediest Medicaid populations by not forcing states to provide
coverage for new applicants in Medicaid until those applicants
have provided satisfactory documentation of lawful presence in
the United States.
Again I thank the chairman and ranking member. These
Medicaid improvement bills before us today are reason for great
optimism for our most vulnerable populations. Mr. Chairman, I
yield back.
Mr. Burgess. The chair thanks the gentleman. The gentleman
yields back. It is not lost on me that we are meeting today,
well, of course this is the Dingell Committee Room, but also
known unofficially as the Green Room. So it is now the chair's
privilege to recognize the subcommittee ranking member, Mr.
Green, 5 minutes for an opening statement, please.
OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Green. Thank you, Mr. Chairman, and I appreciate that.
It was my decision but I want to thank the previous chairman
and the current chairman for leaving the beautiful green walls.
Thank you, Mr. Chairman, and congratulations on your
chairmanship. I look forward to continuing to work with you on
issues. We have done that over the years.
Medicaid is a lifeline, the safety net for more than 74
million Americans who depend on it for coverage. One in every
five Americans receive health coverage from the Medicaid
including 12 million people who now have health insurance
thanks to the Affordable Care Act's expansion of Medicaid for
low-income adults. It is the primary health insurer for ten
million Americans with disabilities, finances more than half
the births, and is a main source of long-term care coverage. In
fact, one in seven seniors on Medicaid and 70 percent of all
nursing home residents rely on the program.
Today's hearing is entitled Strengthening Medicaid and
Prioritizing the Most Vulnerable. Medicaid is both strong and
protects the vulnerable, and this idea of covering one
population deemed less vulnerable as done at the expense of
another more vulnerable population is just wrong both morally
and factually. Health insurance is a right and coverage and
benefits are not a zero-sum game.
The idea of pitting one population or one benefit in a
program against another is a red herring. It is in a poorly
disguised plot to limit access/benefits and punish low-income
Americans by undermining the effectiveness of the program.
Medicaid is a health care safety net for coverage and this
notion of one group being more vulnerable and thereby we should
take money away from the other types of beneficiary goes
against the intent of the program.
Medicaid is strong. It provides comprehensive care at a
lower cost than private insurance. It is true that total
Medicaid spending has grown significantly, but increased
coverage has been overwhelmingly the driver. Enrollment growth
is a cause for celebration not a reason to undermine the
program. It is baffling that we have a debate on whether a
person having health insurance is a good thing.
A part of the enrollment growth is driven by the ACA's
Medicaid expansion which has helped drive the uninsured rate to
8.6 percent, the lowest in our history. States that expanded
Medicaid have not only increased, seen increase in health
coverage, but has also seen savings in their health budgets.
Medicaid beneficiaries, those under a hundred percent of the
federal poverty level and the expansion population which fall
between 100 and 135 percent of federal poverty level, are not
fat cats draining the system. For the overwhelming majority of
them private insurance is not an option financially and
Medicaid allows them to work more hours and care for their
families and seek higher paying jobs.
More than 550,000 of my constituents fall into the Medicaid
expansion gap because Texas refused to almost a $100 billion in
federal money over a decade left them without an option. The
idea that being uninsured is somehow better than having
Medicaid flies in the face of simple logic. Being uninsured is
a terrible situation. One illness can mean bankruptcy and the
only point of access to care is through the emergency room.
But even if that doesn't persuade you, having a large
number of uninsured population is bad for everyone, for folks
with coverage through their employers by driving up premiums,
physicians and hospitals and state budgets. I hear from
constituents every day about how coverage has literally saved
their life and would hear from more in Texas if it would stop
engaging in legislative malpractice and act in the state's best
interest.
Last Congress and the congresses before we worked together
on meaningful strengthening of Medicaid, expanding benefits,
shoring up program integrity, and streamlining the program. The
proposal before us today score a savings because they will
delay or deny coverage to some or redirect funds to states that
choose to operate waiting lists for Medicaid home and community
based services.
The idea that states have waiting lists because resources
had to be diverted to expand Medicaid doesn't hold water. It is
absolutely no correlation between states' coverage levels and
waiting lists for home and community based services. Texas has
the biggest waiting list in the country but didn't expand
Medicaid, while 12 of the states that did expand operate no
waiting lists for these services of any kind.
The right way to truly strengthen Medicaid for the future
is to build on the ACA with expanded coverage, promoting
program integrity and transparency and advanced delivery system
reform in the program. I think every member of our committee is
a problem solver. If we have a problem we want to deal with it.
I am glad to work with anyone to solve problems, but we will
fight with all our means to save the safety net of our low-
income and oldest and youngest Americans.
I thank you, Mr. Chairman, and I yield back my time.
Mr. Burgess. The chair thanks the gentleman. The gentleman
yields back. The chair would ask unanimous consent that Dr.
Ruiz be waived onto the subcommittee for the purpose of this
hearing. Without objection, so ordered.
The chair now recognizes the chairman of the full
committee, Mr. Walden, 5 minutes for an opening statement,
please.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. Well, Mr. Chairman, thank you. And before the
clock starts I just want to commend former Chairman Upton, I
guess, on the color choice. And Mr. Green, I know that makes
you happy. I hope what comes up next makes everyone happy
because we have this new--we have new electronics. Oh, look at
that, the University of Oregon. That will now be a permanent
feature since I thought it actually went with the green. Are
you OK with that?
I would like to yield to the gentleman from Clackamas
County. Is that all right, Kurt? I can't get an orange one.
Mr. Schrader. Yes. No, I think this is a good example of
how this committee is very bipartisan, sir.
Mr. Walden. That is right. All right, thank you very much,
Mr. Chairman. Thanks for your leadership. This does mark the
first hearing of the Health Subcommittee in this new Congress
with a physician heading the subcommittee and with other
professional physical and mental health care providers in key
roles. Let there be no mistaking our intention. We will
modernize America's health care laws by putting what is best
for the patient as our top priority.
The days of putting overbearing, unaccountable Washington
bureaucrats and their tens of thousands of pages of regulations
first are over. Today we embark afresh on our efforts to
strengthen, improve, and modernize America's Medicaid program.
We share a common goal of making sure that those most in need
of medical services in our communities get better quality
affordable care. That is our shared goal.
We are committed to protecting patients and to supporting
innovative patient-centered solutions at the state and local
levels. We recognize the Medicaid program is critically
important. It is a safety net for millions of Americans,
Americans who are elderly, Americans who are low-income, or
Americans who are blind or have disabilities. Individuals and
families served by Medicaid are not just program enrollees,
they are our neighbors. They are our friends.
Today we begin our work to modernize Medicaid and we turn
to experts who have researched creative strategies to give us
guidance on what is working and what is not. We should view our
states as partners in a common cause to bring about a fresh
approach to a big government program that began a half a
century ago or more when Washington bureaucrats thought they
knew what was best.
I want to commend our Health Subcommittee who worked hard
last Congress to identify and adopt measures which would
improve access to care for patients, empower states with more
flexibility and tools, and yield better care for patients, but
no, that was just scratching the surface. Our talented and
experienced witnesses today offer us a set of new ideas and
they offer us their counsel and how we can improve our own
members' bills. Thank you for your input.
You can sense an eagerness among governors whom I have met
with, and state Medicaid directors and think tanks who for the
first time in a long time realize they actually have a partner
who is serious about hearing from them and working with them to
transform the most expensive health care system in the world
into the most modern patient-centered, outcome-based model
known around the globe. That is our opportunity here. They are
overflowing with better ways to deliver health care to our most
needy citizens.
I have read all of your testimony, it is terrific, and I
hope you have only just begun to give those ideas to us. We
have an obligation to improve Medicaid. We can make it more
than just our country's safety net that catches people when
they are down and out. We can do better than that. We can
empower states to innovate, to harness savings and enhance the
actual health of the patients who have been waiting years for a
Washington bureaucrat to decide to throw the kill switch on
every new idea.
The legislation we will consider today originates from our
members listening to their constituents and state leaders back
home who believe we have not done enough to root out waste,
fraud, and abuse. Our committee was reminded of that yesterday
in the Oversight subcommittee chaired by Mr. Murphy where we
heard from the GAO and the HHS Office of Inspector General that
for 14 years Medicaid has remained on the list of high-risk
programs and that those tasked with identifying and preventing
waste, fraud and abuse are still frustrated in their jobs
because they cannot get the data, and the program's lack of
transparency.
Prioritizing the most vulnerable and those in need
necessarily requires setting priorities, so today we consider
three proposals which make common sense changes to close
loopholes, root out abuses and target savings to help patients
most in need. A portion of those savings from each of these
reforms would go to help individuals on Medicaid waiting lists
for home and community based services.
These bills improve Medicaid. They help patients by
scrapping outdated rules or correcting unintended consequences
from existing federal policy. Consider this just the start of
our work as we identify other red tape and outdated
requirements that add costs and deny care to those truly in
need. So in the months and weeks ahead we look forward to
hearing from you and others in our work because we want to give
states more choices, more tools, more flexibility, all toward
the goal of improving health care choices and affordability for
patients.
With that I would yield to Markwayne Mullin the remainder
of my time.
[The statement of Mr. Walden follows:]
Prepared statement of Hon. Greg Walden
This marks the first hearing of the Health Subcommittee in
the new Congress. With a physician heading this subcommittee
and with other professional physical and mental health care
providers in key roles, let there be no mistaking our
intention: We will modernize America's health care laws by
putting what's best for the patient as our top priority.
The days of putting overbearing, unaccountable Washington
bureaucrats and their tens of thousands of pages of regulations
first.are over.
Today, we embark afresh in our efforts to strengthen,
improve, and modernize America's Medicaid program. We share a
common goal of making sure that those most in need in need of
medical services in our communities get better quality,
affordable care. We are committed to protecting patients and to
supporting innovative, patient-centered solutions at the state
and local levels.
We recognize the Medicaid program is a critically important
safety net for millions of Americans--Americans who are
elderly, low-income, or Americans who are blind or have
disabilities. Individuals and families served by Medicaid are
not just program enrollees, they are our neighbors, and our
friends.
Today we begin our work to modernize Medicaid. And we turn
to experts who have researched creative strategies to give us
guidance on what's working and what's not. We should view our
states as partners in a common cause to bring a fresh approach
to a big-government program begun a half-century ago when
Washington bureaucrats thought they knew what was best.
I want to commend our Health Subcommittee who worked hard
last Congress to identify and adopt measures which would
improve access to care for patients, empower states with more
flexibility and tools, and yield better care for patients, but
know that was just scratching the surface.
Our talented and experienced witnesses today offer us a new
set of ideas, and counsel on how we can improve our own
members' bills. Thank you for your input.
You can sense an eagerness among governors and state
Medicaid directors and think tanks who for the first time in a
long time realize they have a partner who is serious about
hearing from them and working with them to transform the most
expensive health care system in the world into the most modern,
patient-centered, outcome-based model known around the globe.
They are overflowing with better ways to deliver health care to
our most needy citizens. And I hope we've only just begun to
hear from them.
We have an obligation to improve Medicaid. We can make it
more than just our country's safety net that catches people
when they are down and out. We can empower states to innovate,
to harness savings and enhance the actual health of the
patients without having to wait years for a Washington
bureaucrat to decide to throw the kill switch on a new idea.
The legislation we will consider today originates from our
members listening to their constituents and state leaders back
home who believe we have not done enough to root out waste,
fraud and abuse. Our committee was reminded yesterday in the
Oversight Subcommittee hearing by the GAO and the HHS Office of
Inspector General that for 14 years Medicaid has remained on
the list of ``high risk'' programs and that those tasked with
identifying and preventing waste, fraud and abuse are
frustrated in their jobs by a lack of data and transparency.
Prioritizing the most vulnerable and those in need
necessarily requires setting priorities. So, today we consider
three proposals which make common-sense changes to close
loopholes, root out abuses and target savings to help patients
most in need. A portion of the savings from each of the reforms
would to help individuals on Medicaid waiting lists for Home
and Community Based Services.
These bills improve Medicaid and help patients by scrapping
outdated rules or correcting unintended consequences from
existing federal policies. Consider this just the start of our
work to identify red-tape and outdated requirements which add
costs and deny care to those truly in need.
In the weeks and months to come, we will actively work
modernize Medicaid by giving our states more choices, more
tools, more flexibility-all toward the goal of improving the
health care choices and affordability for patients.
Mr. Mullin. Thank you, Mr. Chairman. It is an honor to sit
on the Health Subcommittee and I am looking forward to
reforming health care with my colleagues in Congress. Our
Medicaid system is in drastic need to reform. In my bill, Close
the Annuity Loopholes in Medicaid, or the CALM Act, closes an
obvious loophole. The CALM Act makes sure that individuals with
significant means do not take advantage of Medicaid by hiding
some of their assets.
Currently, some married couples are allowed to mask their
assets by purchasing an annuity that pays out to their spouse.
This also allows a couple to hide their true net worth when
applying for Medicaid coverage. My bill closes the loophole and
directs the savings to help those who are waiting for home and
community based services. It is an easy loophole to close and I
look forward to passing this with other Medicaid reform
legislation to make Medicaid stronger. Thank you, Mr. Chairman,
and I yield back.
Mr. Burgess. The chair thanks the gentleman and the
gentleman yields back. The chair now recognizes the ranking
member of the full committee, Mr. Pallone, 5 minutes for an
opening statement, please.
OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Mr. Chairman. Since 1965, the
Medicaid program has been an invaluable resource to poor
families, pregnant women, children, seniors, and now thanks to
the Affordable Care Act low-income working adults. It is also
the program that individuals with disabilities depend on to
maintain independence in the community. In 2016, over 97
million Americans depended on Medicaid at some point during the
year. Together, Medicaid and CHIP cover one in three children
in this country and nearly half of all births. It is undeniable
that Medicaid coverage pays us back as a society tenfold and
that is why improving and strengthening Medicaid for
generations to come continues to be one of our primary goals.
Last Congress this committee worked together on targeted
policies that generally strengthen and improve the Medicaid
program for beneficiaries. Unfortunately the bills before us
today do not share these priorities. In fact, one piece of
legislation continues the Trump administration's assault
against our legal permanent resident population and naturalized
citizens.
The Republican strategy to strengthen Medicaid is to remove
or exclude certain people from the program and then apply those
resources to another person and this is a meaningless approach
to resource management. There is no evidence to suggest that
some beneficiaries take away resources from others or that
excluding some beneficiaries will benefit others.
In today's hearing we will discuss three bills that are
based on this very falsehood, bills that target specific
beneficiaries for exclusion, bills that ultimately incentivize
and reward those states that choose to operate waiting lists
for home and community based services. In order to truly
strengthen the Medicaid program we should expand coverage,
protect against fraud and implement advanced delivery system
reform, and the Affordable Care Act did just that. Thanks to
the Affordable Care Act, 31 states and the District of Columbia
have adopted expansion and dramatically lowered the uninsured
rate.
All 50 states are testing innovative models of care and
Medicaid eligibility and data collection systems have been
modernized. Medicaid has always been under attack by
Republicans, but the threat to this program and to its
beneficiaries is more dangerous than ever before. Republican
policies to cap or turn the program into a block grant would
result in the rug being pulled out from under millions of
children, elderly, individuals with disabilities, and low-
income working adults.
These policies are nothing but bad for our providers and
our state economics. In fact, one analysis by the Kaiser Family
Foundation found that block-granting Medicaid would lead states
to drop between 14.3 million and 20.5 million people from
Medicaid, an enrollment decline of 25 to 35 percent, and would
lead states to cut provider reimbursements by more than 30
percent.
Now I know my Republican colleagues keep saying they have a
plan and that Americans will not lose their health coverage.
But I think it is clear today that the Republicans' only game
plan right now is to sabotage health coverage for tens of
millions of Americans. I yield the remaining time to Mr. Lujan
from New Mexico.
Mr. Lujan. Thank you, Mr. Pallone. Hypocrisy isn't a term
that I use lightly. Unfortunately today hypocrisy is the word
that readily comes to mind. Let's start with the Republican
title of this hearing: Strengthening Medicaid and Prioritizing
the Most Vulnerable. Actions speak louder than words. Let's
talk about what this hearing is really all about. My Republican
colleagues are holding this hearing to lay the groundwork for
ripping health insurance from millions of Americans.
Now I believe that access to affordable and quality health
care is a right for all, not a privilege for some. We would be
never be having a conversation like this if the topic wasn't
Medicaid. If we were having a hearing on Medicare we would be
talking about real ways to better serve beneficiaries, yet when
it comes to health care for working families struggling to make
ends meet, mainly those on Medicaid, all my Republican friends
do is talk about how to cut-cut-cut and strip away access to
care from millions of Americans.
Gutting Medicaid would be a disaster for 74 million
Americans including nearly a million New Mexicans. Why would
anyone want a less healthy country? And just listen to the
argument my Republican colleagues are making, fewer people
having health insurance and access to care is good for America.
It is bad for America, a country with fewer health care jobs
and a country with more working class families that could lose
everything because of a health emergency like a car accident or
a cancer diagnosis.
I have to believe this comes down to the fact that the
leaders of the Grand Old Party don't think that some people are
grand enough to deserve health care. That is wrong. And that is
why the cloud of hypocrisy hangs over these discussions today
and every day that we continue to discuss Medicaid solely
through the lens of what Republicans can cut and how we can
improve things for those millions of seniors and working
families served by this program. With that I yield back.
Mr. Burgess. The gentleman yields back. The chair thanks
the gentleman. This concludes member opening statements. The
chair would remind members that pursuant to committee rules,
all members' opening statements will be made part of the
record.
And we do want to thank our witnesses for being here this
morning taking of your time to testify before the subcommittee.
Each witness will have the opportunity to give an opening
statement and this will be followed by a round of questions
from members. Our witnesses this morning are Dr. Avik Roy, the
president of the Foundation for Research on Equal Opportunity;
Mr. John McCarthy, the former director of the Ohio Department
of Medicaid and the former deputy director of the DC Department
of Health Care Finance; and Ms. Judith Solomon, vice president
for health policy at the Center on Budget and Policy
Priorities.
We do appreciate each of you being here today. We will
begin the panel with Dr. Roy, and you are recognized for 5
minutes for the purpose of summarizing your opening statement,
please.
STATEMENTS OF AVIK S. A. ROY, PRESIDENT, FOUNDATION FOR
RESEARCH ON EQUAL OPPORTUNITY; JOHN MCCARTHY, CEO OF UPSHUR
STREET CONSULTING; AND JUDITH SOLOMON, VICE PRESIDENT, CENTER
ON BUDGET AND POLICY PRIORITIES
STATEMENT OF AVIK S. A. ROY
Mr. Roy. Thank you, Mr. Chairman, Chairman Burgess and
Chairman Walden, Ranking Member Green, members of the Health
Subcommittee of the Energy and Commerce Committee. Thanks for
inviting me here today for your premier hearing as chairman.
My name is Avik Roy. I am the president of the Foundation
for Research on Equal Opportunity, a nonpartisan, nonprofit
think tank focused on expanding economic opportunity to those
who least have it. In my remarks I will discuss Medicaid's poor
health outcomes. I will describe why the program's outdated
design is directly responsible for those outcomes and I will
explore some avenues for reform.
Studies consistently show that patients on Medicaid have
the worst health outcomes of any insurance program in America,
far worse than those with private insurance and, strikingly, no
better than those with no insurance at all. It seems
inconceivable that we could spend $450 billion a year on
Medicaid without any improvement in health outcomes on average,
but the evidence is overwhelming and it is detailed in my
written testimony.
Why do patients fare so poorly on Medicaid? The key reason
is that Medicaid pays physicians far below market rates to care
for Medicaid beneficiaries. In 2008, according to CMS, Medicaid
paid physicians approximately 58 percent of what private
insurers pay them for comparable services. These disparities
have only increased over the ensuing decade. Surprisingly, a
2007 study by MIT economists Jonathan Gruber and David
Rodriguez found that doctors fare even better treating the
uninsured, economically, than they do caring for those on
Medicaid because getting paid in cash by the uninsured is
better than getting paid through Medicaid.
As a result of these disparities in reimbursement, fewer
physicians accept Medicaid enrolled patients. Internists are
8.5 times as likely to refuse to accept any Medicaid patients
relative to those with private insurance. Physicians are six
times more likely to deny an appointment to children on
Medicaid suffering from serious medical conditions like a
broken arm or an acute asthma attack relative to those with
private insurance. Without consistent access to physicians,
Medicaid enrollees don't get their cancer diagnosed until it is
too late, they don't receive adequate care for problems like
diabetes and heart disease until it is too late.
So why is it that Medicaid's reimbursement rates are so
low? It is because of the flawed way in which the program was
designed in 1965. Medicaid as you know is jointly funded by
state governments and the federal government, but because
neither states nor Washington have full responsibility for the
program both parties have engaged in irresponsible behavior.
As Medicaid has grown over time, state budgets have come
under increasing strain. States' Medicaid obligations now crowd
out spending on teachers, police and roads. But it is mostly
illegal for states to increase co-pays, deductibles or premiums
for Medicaid enrollees. Moving people off of the Medicaid rolls
is highly controversial, and most attempts by state governments
to enact minor programmatic changes must survive as you know
this lengthy waiver process with HHS.
Federal law in some cases forces states to spend Medicaid
dollars on people who don't need the help. For example, lottery
winners who receive a lump sum payment in 1 month but have zero
income for the rest of the year are eligible for Medicaid 11
months out of 12. Individuals whose spouses receive large
annuities remain eligible in some cases for the Medicaid long-
term care program.
Federal law also requires states to provide Medicaid funds
to new enrollees for a period of time even if they have not
documented that they legally reside in the U.S. and are
therefore eligible for such funds. These provisions put
additional pressure on states to reduce Medicaid spending and
reimbursement rates for the vulnerable populations that the
program was designed to help. The vast majority of states have
responded to these constraints in exactly that way by reducing
Medicaid's reimbursement rates to health care providers, paying
hospitals and doctors less for the same level of service.
The Health Subcommittee is considering legislation that
would address some of these problems and I look forward to
exploring those ideas with you at this hearing. I know that
many of you believe as I do that we can do much more to improve
the quality of care and coverage for Americans below the
poverty line.
At the Foundation for Research on Equal Opportunity, we
have published a detailed and wide-ranging health reform
proposal called Transcending Obamacare: A Patient-Centered Plan
for Near-Universal Coverage and Permanent Fiscal Solvency. We
estimate that the plan would cover 12 million more people than
current law, dramatically improve health outcomes for the poor
by taking the dollars we spend on acute care Medicaid and
giving them to patients in the form of refundable tax credits
that can be used to purchase private coverage and build Health
Savings Accounts.
Per capita caps, a reform contemplated by this
subcommittee, can also be structured in a similar way. Aside
from the fact that private coverage is superior to Medicaid
coverage, integrating Medicaid enrollees into an individual
health insurance coverage will ensure that as their incomes go
up and down they can remain in one insurance plan in one
physician network and thereby gain a continuity of care that
they do not have in today's system.
This Congress has a once-in-a-generation opportunity to
transform the quality of coverage and care that we offer to the
neediest amongst us. I look forward to your questions and to
being of further assistance to this committee. Thank you.
[The statement of Avik S. A. Roy follows:]
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Mr. Burgess. The chair thanks the gentleman and the chair
recognizes Mr. McCarthy 5 minutes for your opening statement,
please.
STATEMENT OF JOHN MCCARTHY
Mr. McCarthy. Good morning, Chairman Burgess, Ranking
Member Green and distinguished members of the subcommittee. I
am John McCarthy, currently the CEO of Upshur Street
Consulting. I recently stepped down from the position of
Medicaid director for the State of Ohio and previous to that
was the Medicaid director for the District of Columbia. I
appreciate this opportunity to share my recommendations for
strengthening the Medicaid program.
The three bills that are up for discussion began to address
some common sense reforms to eligibility requirements for the
Medicaid program. Having recently served as the vice president
on the board of directors for the National Association of
Medicaid Directors, I know that it is important to Medicaid
directors that the integrity of the program is maintained to
make the program financially viable to serve those who qualify.
These three bills promise to move the program in that
direction.
First, the discussion draft of Prioritizing the Most
Vulnerable Over Lottery Winners Act of 2017 would place
reasonable exclusion periods for Medicaid eligibility when a
person wins the lottery. Limiting Medicaid eligibility for
lottery winners is an eligibility change that many support and
a policy change I advocated for the last few years.
Second, the discussion draft of the Close Annuity Loopholes
in Medicaid Act requires a state to apply half of an annuity's
payout to the spouse that is not institutionalized to the
income of the spouse that is institutionalized and applying for
Medicaid. Ensuring that Medicaid eligibility is limited to
people without resources to pay for long-term services and
supports, or LTSS, instead of also covering those who can
shelter their resources would be an important improvement.
For most states the greatest spending per person is for the
aged, blind, and disabled population who are the greatest users
of LTSS, so this is an important area to carefully explore.
However, the bill does have some technical issues that need
further examination. For example, the institutionalized spouse
could purchase the annuity and then name the spouse the
annuitant and avoid assigning half of the payment to the
institutionalized spouse. Because this area of Medicaid policy
is so complex, a very close analysis of this issue is needed to
ensure the problem is fully addressed.
Lastly, the Verify Eligibility for Coverage Act eliminates
federal dollars being used on services before a person proves
their citizenship or immigration status. This change would
provide the person requesting eligibility with an incentive to
produce documentation as quickly as possible and help to ensure
federal dollars are not spent on individuals who do not qualify
for the program.
All the bills include the creation of the Medicaid
Improvement Fund. The main stated goal of this fund is to
reduce waiting lists for home and community-based service
waivers. I agree that this is an important issue. It was one of
the goals of the first Kasich administration budget to
eliminate the wait list for the PASSPORT waiver which serves
people over the age of 60.
We eliminated that wait list and reduced the number of
nursing home bed-days that were paid for which in turn led to
over $1 billion in savings over 4 fiscal years. A small initial
investment was needed, but in the long term this offered a cost
savings. However, this cost savings is only realized for cases
in which there is a diversion from an institution.
If the person who is on the wait list is never
institutionalized, the Medicaid program is likely to have lower
expenditures than HCBS would entail. That does not necessarily
mean that the person does not have the care he or she needs,
the person may be enrolled in the Medicaid program and
receiving some amount of state plan services at home and
additional services may be provided by non-paid caregivers or
from services paid by local dollars. This program therefore
will need to be carefully managed so that costs do not grow
uncontrollably. In particular, in caution I offer that since
this bill creates a competitive program with priority given to
states with the highest number of people on wait lists that
provides an incentive to a state to have higher wait lists.
Other methods for determining the appropriate funding level
per state should be explored in order to manage the cost of the
change. One alternative may be to tie the proposal to the Money
Follows the Person program and provide financial incentive to
states to move people out of institutions and back into the
community. Another option may be to have the dollars proposed--
the Medicare program needs reform. There is simply too much
unneeded and overly burdensome regulation that has been
promulgated over the last few years and that does not provide a
benefit to beneficiaries.
The new Access to Care Regulation and the Managed Care Mega
Rule are just two examples. The Access to Care Regulation was a
backdoor method to take away the ability for a state to set
reimbursement rates for providers by putting that authority in
the Centers for Medicare and Medicaid Services' hands. The
amount of information that is requested by CMS, such as surveys
of providers and private sector rate data, is not a true
measure of adequacy of the proposal. Additionally, the staff
time needed to complete this work pulls the staff away from
more impactful tasks such as implementing value-based
purchasing.
The areas in need of reform that I have laid out above are
only a subset of issues that are currently not working
optimally in the Medicaid program. I do not have enough time
today to go through all the areas. A good resource to use on
what reforms are needed is the document published by NAMD, the
National Association of Medicaid Directors legislative
priorities for 2017. However, for real reform the fundamental
role of CMS must be rethought. Currently it acts as a regulator
for states. It should shift into the role of a payer and
oversee the program. Instead of telling a state how much a
state should reimburse providers, CMS should monitor health
outcomes.
With that, in conclusion, the Medicaid program is in need
of reform. We need to think of new ways to oversee this
program, and I am happy to answer any questions.
[The statement of John McCarthy follows:]
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Mr. Burgess. The chair thanks the gentleman and the
gentleman yields back. Ms. Solomon, you are recognized for 5
minutes for the purpose of an opening statement.
STATEMENT OF JUDITH SOLOMON
Ms. Solomon. Thank you, Chairman Burgess, Ranking Member
Green, and members of the subcommittee. I am really happy to be
here to testify today. I am Judith Solomon, vice president for
health policy at the Center on Budget and Policy Priorities. I
am going to cover three things in my statement, provide some
background on home and community-based service waivers which I
will refer to as HCBS, talk about how they work, explain why
there are waiting lists, and briefly discuss how waiting lists
should and should not be addressed.
HCBS waivers became available in Medicaid in 1981 to give
states a way to provide long-term care in people's homes. Up
until then because skilled nursing care and home health have
been mandatory services in Medicaid there was a bias toward
institutional care. Families often had to face the dilemma that
the only way they could get their loved ones the care they
needed was to put them in a nursing home.
HCBS waivers gave states new ways to address the needs of
children, adults with disabilities, and seniors. States can
make people eligible for Medicaid who would only be eligible in
a nursing home and create packages of services specifically
designed to allow them to stay at home. These include home
modifications, respite care, and enhanced home health services.
Progress has been dramatic. In 2013, for the first time over
half of long-term services and supports were for HCBS rather
than for institutional care, and Figure 1 in my testimony shows
that trajectory.
So why are there waiting lists? Well, HCBS waivers are the
epitome of flexibility in Medicaid. States can target waivers
to people with intellectual and developmental disabilities,
seniors, people with HIV/AIDS and people with traumatic brain
injury, and they can create packages of services that are
specifically designed for the group they select. According to
CMS there are now over 275 waiver programs nationally serving
well over a million people.
Part of the flexibility states have is to limit their
waivers to a defined number of slots and create waiting lists.
The flexibility was important to states when these waivers were
created because the waivers are expensive and states were
concerned that the demand would just put them in the red. So
the number of people on waiting lists shows that demand. They
have grown every year going back to the data I have in my
testimony to 2005, well before the Medicaid expansion. They
have grown it an average rate of 14 percent a year and there is
significant variation across states.
Eleven states and the District of Columbia have no waiting
lists, and of these states without waiting lists only two
haven't expanded Medicaid, Maine and Missouri. The two states,
as was mentioned, with the longest waiting lists are Texas and
Florida which have not expanded Medicaid. Another fact that is
often overlooked is that people on waiting lists, the vast
majority, are actually getting Medicaid so they are getting
other services. The specialized services are very important to
them but they aren't being left without the core services that
Medicaid provides.
So how do we deal with waiting lists? Certainly at CBPP we
join the goal of people here to decrease them, but we think
there are better ways to address the waiting lists than by
taking savings from the three bills before you today to provide
enhanced federal funds for states with the longest waiting
lists.
It would be much fairer to all states to provide incentives
to enhance the provision of home- and community-based services
which could include metrics to measure state progress. This
could include continued funding for the Money Follows the
Person program and the balancing incentive programs for which
both the funding has expired. These were initiatives that have
allowed states to make progress. The concern, and I think Mr.
McCarthy said it as well, is by rewarding states with the
highest waiting lists with higher match you really almost
encourage states to grow their waiting lists.
So in closing though I would like to note what I think the
real threat to Medicaid is and to home- and community-based
services specifically. The most recent House budget plan would
have given states the choice of a block grant or per capita cap
to achieve cuts in federal Medicaid funding of $1 trillion over
10 years, cutting the program by 30 percent in the 10th year
and then even more in the decades after this. Cuts of this
magnitude would likely lead to huge increases in waiting lists
or elimination of the programs altogether because these are
optional for states.
I thank you, I look forward to answering your questions
about this and also about the bills. I can talk about those as
well.
[The statement of Judith Solomon follows:]
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Mr. Burgess. The chair thanks the gentlelady. I really
thank all of our witnesses for being with us today. This brings
us to the question portion of the hearing and I am going to
begin the questioning by recognizing myself for 5 minutes.
Dr. Roy, Mr. Flores has a bill before us today that would
require individuals to provide documentation of their
citizenship or lawful status before the states begin covering
them. Is this in fact a problem? Is this an area where
regulation needs to perhaps be tightened up a little bit?
Mr. Roy. If you talk to state Medicaid directors and other
people at the state level they will say that this is a
significant expenditure for them. And I am not aware of a CBO
score for the previous--I know there has been a bill that has
been scored previously along these lines, but I want to say at
least several hundred million dollars potentially could be
saved by ensuring you are dedicating Medicaid resource to
people who are legally resident of the country and you don't
have these windows where people who aren't documented are
getting those benefits.
Mr. Burgess. And just as a consequence of that there is no
way to retrieve those dollars once they have been spent, once
they go out the door they are gone?
Mr. Roy. They are gone. And as I mentioned both in my
written testimony and my oral testimony, to me the biggest
challenge is what we see is most states when they face a cost
crunch what do they do, they lower reimbursement rates to
providers, particularly physicians, which ends up in particular
harming access to care for the people who are enrolled in the
program who are eligible for the program in reality.
Mr. Burgess. And I appreciate your comments on that.
Mr. McCarthy, under the Affordable Care Act of course
expanded Medicaid and the expansion populations were eligible
for a federal match of 95 percent this year, tapers down to 90
percent in 2020 under current law. And there has been a concern
expressed because a state that expanded is paying a smaller
portion of the cost for care of the expansion population, in
times of a budget crunch the incentive would be for a state to
reduce services or benefits for the traditional population. Can
you talk about the degree, do you think that this is a fair
concern?
Mr. McCarthy. Mr. Chairman, every state is different. They
all make their different decisions. I would say that depending
on where a state is and the number of advocates in that state
for different services you would have to look at those things.
I would agree with Dr. Roy that the first place a state
would probably look is at reimbursement rates rather than
looking at eliminating services for individuals. It partially
goes back to what I was talking about on home- and community-
based services. If you, for instance in Ohio where we had a
waiting list for our PASSPORT program, which was our waiver for
individuals who are aged above the age of 60, the service that
they could get is nursing home. But we had a 20 percent nursing
home vacancy when I began that role, so where a person would
end up is just in that higher cost service anyway so just
further driving up the cost of the program.
So that is the home- and community-based services we wanted
to keep in place because that actually saved us a large amount
of money. Actually, if you look at the Ohio program and you
look at the number of people age 65 or older in January of 2011
when the Kasich administration came into office and you just
looked at how that actually grew the number of the people in
the program and then you plotted against that a line of the
number of nursing home bed-days that we paid for, that line
actually went down.
So that is what generated that savings in there so we used
that savings to go back into the program to do that. So I
understand your question of, well, it is only ten percent and
we wouldn't get savings but at the same time the other costs
are pretty large also. We hadn't talked about duals population.
That for us in Ohio was a huge portion of the costs and growing
costs. Also the Medicare growing costs that we had, so our Part
D and Part B expenditures for this budget that just got put in
ate up almost our entire growth of the Medicaid state share of
the budget.
So there is a lot of moving pieces in there. I am not sure
of going to where there would be cuts in services would be the
first place probably would be in provider reimbursement.
Mr. Burgess. Which in turn has a deleterious effect
downstream which Dr. Roy has detailed. Let me yield back my
time and I will recognize the ranking member of the
subcommittee, Mr. Green, 5 minutes for questions, please.
Mr. Green. Thank you, Mr. Chairman. Multiple studies show
that Medicaid is a lean and high-performing program that
provides access to quality health care for those who need it
the most. Unfortunately the bills we are discussing here today
are rushed and not well thought out and could undermine the
program and its beneficiaries. Medicaid matters and it works. I
think we have been in an audience to alternative facts and
skewed in some of the testimony we have heard.
I would like to use my time to ask Ms. Solomon questions to
help set the record straight. Ms. Solomon, what are the
benefits of having Medicaid coverage? I read in a recent study
that the folks are literally dying while waiting for Medicaid
expansion, yet we hear from some that it would be better to be
uninsured than have Medicaid. I would like to see if you can
debunk that myth that it is better to be uninsured than to have
Medicaid.
Ms. Solomon. Thank you. I think that it is very clear and
the data on access show that Medicaid patients have a usual
source of care at rates approaching that of privately insured
and double that of uninsured people. I think the studies that
Dr. Roy has cited are really looking at people with serious
illness and comparing people on Medicaid to others, and it is
really unclear where they were. Were they insured before they
got sick? And the expansion, what the expansion has done has
allowed that to happen. So if we look at this 10, 20 years from
now assuming we stay steady, I think we would see a very
different picture.
And I think what has happened in Louisiana where they are
really documenting it is amazing. They have a dashboard that
shows kind of how many cases of breast cancer have been
diagnosed from their expansion that just started actually last
year, how many cases of colon cancer, how many cases of
diabetes and hypertension. You can look at that up to the
minute.
And what you are seeing is that in that expansion
population that now has access to care, people are getting the
exams and they are finding those things so that when people do
have cancer and need surgery their outcomes will likely be
better because they were covered up until the time that they
got sick. Before the expansion you either had to be a very,
very low income parent, a senior, a person with a disability, a
severe disability. So what the expansion does is really open
the door to allow access to care for everybody who can't afford
to purchase coverage on their own.
Mr. Green. Can you describe access to care in the Medicaid
program, for instance the timeliness in which Medicaid patients
are able to make an appointment with a primary care doctor? Are
Medicaid patients generally satisfied with their care? Have
there been studies on that?
Ms. Solomon. Yes. I think there is high levels of
satisfaction. And again, a study from researchers at the Urban
Institute showed that timely care was at about 78 percent of
people reported they could get care in a timely manner. And
that again compared favorably with patients that were insured,
and people that were uninsured had obviously a much harder time
getting care they needed when they needed it.
Mr. Green. Do you believe that the Medicaid program will be
able to serve the same number of people with the same quality
and same benefits if the program were converted to a capped or
a block grant program? How would states adjust to a capped or
block grant system?
Ms. Solomon. It is impossible. With the level of those cuts
the Urban Institute--and a prior proposal--estimated a loss of
14 to 21 million people covered by the program after a few
years. It is just impossible to serve the same number of people
when you are making a cut of that magnitude. And I think over
time, you would see cuts in provider payments. But you would
see other things as well. You would see cuts in eligibility,
you would see cuts in benefits.
And I think when we are talking about home- and community-
based services you have to think about it from the perspective
of you have people in nursing homes that is not, you are not
going to be able to turn those people out of nursing homes so
where are the cuts going to be made? I think the home- and
community-based services are particularly vulnerable as the
topic of today that it is worth highlighting.
Mr. Green. Thank you. Mr. Chairman, given some of Ms.
Solomon's answers I would like to submit two research studies
for the record. The first study, the research that covers
reducing mortality as evidence from states that expanded
Medicaid prior to the ACA; and second, Mr. Chairman,
illustrates the bipartisan support of the Medicaid program in
the ACA expansion by both Republicans and Democratic governors.
\*\ I ask unanimous consent to put those in the record.
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\*\ The information has been retained in committee files and can be
found at: https://docs.house.gov/meetings/IF/IF14/20170201/105498/HHRG-
115-IF14-20170201-SD006.pdf.
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Mr. Burgess. Without objection, so ordered.
Mr. Green. And I yield back my time.
Mr. Burgess. The chair thanks the gentleman. The gentleman
yields back. The chair recognizes the chairman of the full
committee, Mr. Walden, 5 minutes for questions, please.
Mr. Walden. Thank you very much, Dr. Burgess, appreciate
it.
Dr. Roy, I was intrigued by your, well, all of your
testimonies, I read it all. It was all very helpful. I am
curious, Dr. Roy, do you think it is appropriate for
millionaires, maybe billionaires, to receive Medicaid while at
the same time we do have people waiting for care? I mean I know
we heard that there is nothing to that, but indeed we have
heard from states.
I have heard from Medicaid directors, I have heard from
governors. They would just like the flexibility to close what
some would say is a loophole that allows somebody to get a
windfall. It is not just the lottery winner but it could be and
it is in some cases, and then the way the rules are written
they still qualify for Medicaid when actually they are flush
with money. Do you think we ought to close that loophole? Does
that harm somebody?
Mr. Roy. I entirely agree with that Mr. Chairman, and let
me take a minute to respectfully correct the record in terms of
what Mr. Green did to characterize, how he characterized my
remarks. I didn't say that Medicaid beneficiaries were worse
off than people with private insurance, I said they were no
better off based on the gold standard research which comes from
work that was published in the New England Journal of Medicine,
not known as a sort of alternative facts.
Mr. Walden. It is actually a peer-reviewed journal of high
renown, right?
Mr. Roy. Absolutely. And my written testimony contains 14
footnotes from peer-reviewed journals that discuss Medicaid
help, how it comes in and the challenges thereof.
Mr. Walden. See, and I approach this from the fact that why
aren't we looking at the science, why aren't we looking at the
peer-reviewed journal and saying, OK, what is wrong there and
how do we fix it?
Mr. Roy. Absolutely. And this is one of the things that I
hope that this committee can do in a bipartisan way is say
look, this is not about a debate about whether we should
provide and subsidize and help people who need----
Mr. Walden. Correct.
Mr. Roy [continuing]. Health insurance who are poor, it is
what is the best way to do that.
Mr. Walden. Right.
Mr. Roy. And I firmly believe that the best way to do that
is through giving those patients more control over the health
care dollars that are spent on their behalf. You get less waste
and fraud, more accountability and more innovation in the
delivery of health care.
Mr. Walden. And in the meetings I have had with governors,
just to continue this, they are begging for that flexibility at
the state and local level. They are the ones that are managing
and helping these patients. They have talked to me about really
impressive things like, what was it, the high-risk assessments
where they get around a person and say this is a person with a
lot of issues going on.
They may need this kind of health care, this kind of mental
health care, they may actually need some modification of their
house and yet they have to come beg Washington and some
bureaucrat back here to get a waiver to do this that or the
other thing or they can't plow the savings in to continue to
expand and improve the patient's health.
I have always approached this having been on a local
hospital board and then working on this stuff in Oregon that
you start with the patient and if you get your hands around it
that is where I see it is going trying to devolve some of the
decision making back to the states. Are there other examples
that you have run across in your work where states have had
innovative ideas and yet can't get past somebody back here in
Washington to be able to implement it that would improve,
improve patient care?
Mr. Roy. We could spend all day talking about innovative
ideas at the state level that have been stymied by CMS. One I
can bring up is the Healthy Indiana program in Indiana. When it
was first installed by then governor Mitch Daniels, they tried
to do some very simple things to install a larger co-pay if you
use the emergency department for non-urgent medical needs and
instead they tried to create financial incentives for Medicaid
enrollees to go to urgent care clinics or primary care
physicians for those issues. They couldn't do it because it is
contrary to the Medicaid statute passed by Congress in 1965.
They can't even get a waiver for that because the statute
itself forbids those practices.
I can tell you it is not just policymakers at the state
level who are concerned about these problems. If you have ever
spoken to a patient who has spent a week trying to get a
doctor's appointment for their child or for themselves and
can't do it because so many physicians don't take Medicaid,
those are heartbreaking stories.
Mr. Walden. And don't your peer review data also show that?
Mr. Roy. Yes.
Mr. Walden. That the wait times are longer for Medicaid
patients than for others, it is a fairly significant wait-time
differential, right?
Mr. Roy. Absolutely. And again in my written testimony I
have referenced to some of that literature.
Mr. Walden. I know in conversation I had with Governor, I
think it is Governor Herbert from Utah talked about trying to
be able to communicate with Medicaid patients in Utah by email,
apparently some new and novel communication technique. He had
to appeal to Washington to get a waiver, waited months, only to
get an email from Washington saying no, sorry, you can't do
that.
Now I don't know what else was all involved there, but I
assume they would have a backstop. If they didn't have e-mail
you would still do other ways to communicate because not
everybody does, but that struck me as something pretty bizarre.
Do you run into those sorts of things? Is he unique?
Mr. Roy. Every Medicaid director, Democrat or Republican,
has stories like that. It is a huge problem. And again this is
why it is not only important to give states more flexibility in
how they manage these populations, but it is also important to
give individuals more flexibility----
Mr. Walden. There you go.
Mr. Roy [continuing]. In how they use their health care
dollars.
Mr. Walden. Back to a patient-doctor, patient-provider
system. I have used up my time. Thank you very much, all of
you, for your comments, counsel and testimony. I yield back.
Mr. Burgess. The gentleman yields back. The chair thanks
the gentleman. The chair now recognizes the gentleman from New
Jersey, Mr. Pallone, 5 minutes for questions, please.
Mr. Pallone. Thank you, Mr. Chairman. My questions are to
Ms. Solomon. There is a lot of misinformation, or maybe
alternate facts is a better word, about Medicaid that continues
despite all evidence to the contrary, so I would like you to
help us set the record straight, Ms. Solomon. What do you say
to claims that the Medicaid expansion funding threatens the
truly vulnerable? Can you clarify why that is not the case?
Ms. Solomon. Yes, thank you, Mr. Pallone. As I said in my
written testimony, there really is just no correlation. And I
think this was explored at the hearing yesterday and resolved
that the states with the biggest waiting lists have not
expanded. The states that don't have waiting lists in large
part have expanded.
Another metric is the state option that the Affordable Care
Act gave states to actually provide HCBS services without a
waiver. Eighteen states have taken that up. The option actually
doesn't allow waiting lists, so this is opening up programs to
everyone who qualifies. Eighteen states, fourteen are states
that have expanded. So I think what you see, Texas
unfortunately has one-third of the people, all the people on
the waiting list is really no correlation between wait lists
and the decision whether or not to expand. They are totally
independent.
Mr. Pallone. All right. And in a similar vein, Mr. Roy
claims that Medicaid is simply fiscally unsustainable due in
part to the Medicaid expansion under the ACA. Can you clarify
why this is not the case? Why have most states that have
expanded Medicaid for instance actually experienced net
budgetary savings associated with the expansion?
Ms. Solomon. I mean it is true and they have documented
them. New Jersey, for example, has put out reports and they
have saved money in a variety of ways, primarily by lowering
their payments for uncompensated care through hospitals and
other providers as Medicaid has picked that up. They have also
been able to better utilize the services that they have already
been providing to people with behavioral health conditions,
mental health, and substance use disorders.
And that is where the expansion--and I know it is really
true in Ohio--has been particularly helpful in dealing with the
opioid epidemic in allowing states to use their own dollars
more effectively to wrap around services for people, for
example, who are chronically homeless, and address the social
determinates of health recognizing that health care is only a
small part of what is going to keep very low income and
vulnerable people healthy.
Mr. Pallone. And Ms. Solomon, over the past 2 days in this
committee we have heard from some sources that Medicaid
expansion discourages work. It is my understanding that
numerous studies have disproven the myth that Medicaid
expansion diminishes work incentives and I want to know if that
is correct. But also, furthermore, several states that expanded
Medicaid have found that the expansion populations have not
experienced greater job losses or work reduction, so would you
comment on those?
Ms. Solomon. That is absolutely right. And I think what the
Medicaid expansion has been shown to do is allow people to work
and to have greater earnings knowing that they can then
transition to the marketplace and get subsidies or, assuming
their employer doesn't provide work. The other thing that is
really important particularly for people who have mental health
and substance use disorders is that states are creating
supported work programs so that they are able through Medicaid
to provide the supports that people need to help them get a job
and stay employed.
And Medicaid has been able to do that not only for people
with disabilities in the disability category but also for
people in the expansion. Most of the people that are getting
expansion coverage actually are people who are working but they
are working in low wage jobs or part-time jobs or multiple
part-time jobs that don't provide coverage. So Medicaid allows
them to get the care they need to stay employed and to remain
healthy, so it is a work support not a work discourager, I
would say.
Mr. Pallone. And then also the studies have found that
Medicaid expansion likely improves the financial situation of
those who gained Medicaid coverage under the ACA including
reducing unpaid bills and medical debts. Just a few seconds
left, if you could comment on that.
Ms. Solomon. Absolutely. A National Bureau of Economic
Research study shows that a dramatic fall-off in people with
debt sent to third-party collections in states that have
expanded Medicaid compared to states that haven't.
Mr. Pallone. Thank you. Thank you, Mr. Chairman.
Mr. Burgess. The chair thanks the gentleman. The chair
recognizes the gentleman from Kentucky, the vice chairman of
the subcommittee, Mr. Guthrie, 5 minutes for questions.
Mr. Guthrie. Thanks. My first question is for Mr.
McCarthy. There is a new CRS memo, CMS Collections of
Information from states under the Medicaid Program that tallies
the burden states face when complying with CMS requirements
under current law. Mr. Chairman, I request unanimous consent
this be placed in the record. \*\
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\*\ The information has been retained in committee files and can be
found at: https://docs.house.gov/meetings/IF/IF14/20170201/105498/HHRG-
115-IF14-20170201-SD003.pdf.
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Mr. Burgess. Without objection, so ordered.
Mr. Guthrie. This new memo shows that the reporting burden
is higher than many people probably appreciate. One thing I
have heard a lot over the past year is that CMS collects
information from states but it is often focused on the wrong
issues and it is not clear what CMS even does sometimes with
the information reported. I mean we don't even have good data
matching expenditures by category of service to beneficiaries,
and everyone knows how bad Medicaid data is.
I strongly believe in accountability for states, but I
wonder if CMS has been focused on the wrong things at times.
What reporting requirements do you think add costs and not
value and what could we cut back on without negatively
impacting accountability?
Mr. McCarthy. I think what needs to be done is going
through all of those reports that are identified in there to
determine what information it is needed and how it will be used
going forward. It is the same thing we did at the state when we
came in. We looked at all the different reports we had and
decided one way, should we keep the report or should we get rid
of the report or is there something in there that we need?
Often at the state level the report that we requested was
partially due because a legislator at some point had asked for
information and so you gathered that information and you just
kept on gathering it. There are two reports from CMS that we
always had to turn in. It was the CHIP report and also the
EPSDT report, and I was unclear always of how CMS used those
two reports. Our federal matching percentage isn't changed
because of those. It doesn't go up or down. There is no
penalties or rewards for those things.
So I think that is a part of looking at those reports and
saying OK, what information do we need? Information, giving
that to CMS is very important. They get questions, you are
talking about transparency especially on demonstration projects
I know there is a number in there. We need to turn over that
information, but the question is then how do they use that and
if it is not good information or it is not used then let's let
it go.
Mr. Guthrie. So in your testimony you talked about CMS
should be more focused on outcomes for patients in Medicaid and
less prescriptive on how states get there, and I agree with the
sentiment and direction. Can you think of a few concrete steps
to move incrementally that direction?
Mr. McCarthy. So we, many states I should say, use managed
care plans, private sector managed care plans to help provide
services to the population. You hold them accountable and it is
often called pay for performance for the managed care plans.
And what you do is you hold back a percentage of their
capitation rates from one percent to five percent, and some of
that is changing right now. So it provides that incentive and
then you use some type of measure. We often use NCQA HEDIS
measures to be able to then measure those plans. The better
they did they could get that money back.
So one of my ideas has always been, well, why doesn't CMS
do the same thing with states and back off some of the command
and control and instead hold states accountable for healthy
outcomes. Dr. Roy brought those up. So if you have bad outcomes
maybe a state should be penalized for that, but if you have
good outcomes why isn't there an increase in funding for that
state to provide that incentive? States do what we are
incentivized to do. Right now the incentive is how do you draw
down the maximum amount of federal dollars that you can get, so
it is how do you move from that to something else that can be
measured?
Mr. Guthrie. OK, thank you. And just from some of the other
things that we have talked about, I am from Kentucky and
Kentucky is an expansion state, elected a new governor
recently. And at some political peril to himself he decided we
are going to try to figure out how to keep the expansion and
make it work.
And it is kind of news, it would be news to Kentucky that
expansion has made the budget better. Maybe when the previous
governor expanded it was a hundred percent federal, but the
Medicaid program is going to take up 100 percent of the new
additional revenues grown to Kentucky over the next biennium
which means it is going to sacrifice what we can pay teachers,
what we can do to colleges and universities.
So our governor is actually trying to--and he is hearing
some of the same rhetoric that we have heard in some of the
opening statements. And when he is really trying to keep the
program and make it better a lot of people say, well, keep it
and make it better and he is trying to, and one of the things
he is trying to do is co-pays.
So there are people in the expanded population, so he has
the traditional Medicaid, the disabled and the traditional
Medicaid, looking at the expanded population--and he gets a lot
of negative rhetoric for this. He says maybe they should pay $1
minimum to $15 maximum for health care per month, and the other
one is a work requirement. And he says that people are in the
expanded population working. There are working poor in the
expanded population, but some people aren't.
And he says if you are able bodied and you are not, you
should work at least 20 hours a week, volunteer work, and I
think you can even classify maybe taking care of your
grandchild. You can get it certified that as long as you are
doing that 20 hours a week so somebody else can go work then
you get credit for that. And so there are people trying to make
this better and it is not sustainable the way that it is. And I
know no one has offered a big tax increase to make Medicaid
balance in states and at the federal level and so that is what
we are trying to do. We are trying to be serious with it and
have people covered and move forward.
And I have run out of time so I will yield. I was going to
ask a question but I ran out of time so I will yield back.
Mr. Burgess. The chair thanks the gentleman. The gentleman
yields back. The chair recognizes the gentlelady from Florida,
Ms. Castor, for 5 minutes for questions, please.
Ms. Castor. Thank you, Mr. Chairman. Mr. Chairman, many
people in organizations are speaking out about the difference
that Medicaid coverage makes in the lives of millions of
Americans and they have contacted the committee this week to
make their views on Medicaid known. And I would like to ask
unanimous consent to submit some of their letters from the
record including a letter from the National Coalition on Health
Care opposing the defunding or repealing of the Medicaid
expansion.
The coalition represents nearly 90 of America's leading
associations of health care providers. A letter from the Asian
& Pacific Islander American Health Forum which works to improve
the health of 20 million Asian Americans and nearly one million
native Hawaiians and Pacific Islanders; a letter from the AARP
representing 38 million seniors in all 50 states; a letter from
the Save Medicaid in Schools Coalition representing more than
25 organizations invested in the education of our kids; and a
letter from the Association of American Medical Colleges
representing the nation's medical schools and major teaching
hospitals.
This is just a sampling of the diverse array of groups that
proactively have reached out to this committee just recently to
express support for the flexible federal-state partnership that
is Medicaid and to offer their ideas to truly strengthen and
protect vital Medicaid services.
Mr. Burgess. Will the gentlelady yield to accept her
unanimous consent request?
Ms. Castor. Yes, I will.
Mr. Burgess. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Ms. Castor. Thank you very much.
Ms. Solomon, the fear is palpable across the country among
families that the Republicans aim to devastate care that is
provided through the Medicaid partnership, families that relied
on skilled nursing and home and community based services,
families with an Alzheimer's patient, children's health care
especially kids with complex medical conditions, people with
disabilities, and now according to many news sources at the
start of the Trump administration it appears that yes, indeed,
they intend to target families who rely on Medicaid for
elimination of care and services disguised by the terminology
of per capita caps and block grants.
And this committee has put out a press release as recently
as last night Republicans also plan to target Medicaid through
reconciliation so we are gearing up for that. I want to get it
clearly on the record what American families can expect if
Republicans try to change Medicaid to block grants or per
capita caps. It looks like a real draconian process.
I have served on the Budget Committee the past few terms as
a representative of the Democrats on the Energy and Commerce
Committee and we have seen those budgets. And we have always
had this backstop of President Obama and the White House and
senators that said no way are we going to devastate care for
families, but I think it is really at risk. You have studied
these budgets that have passed the past couple of terms; is
that right?
Ms. Solomon. Yes, I have.
Ms. Castor. And could you describe the impact on health
services for American families that rely on Medicaid if that
approach is enacted into law?
Ms. Solomon. Yes. In my testimony Figure 3 shows the
trajectory of cuts over 10 years from the latest proposal, the
proposal for fiscal year 2017 and it is enormous. And it is
very clear that what these proposals do is basically pull
federal funds out of the program and shift not only the cost to
states but the responsibility to deal with the cuts and it is
the states that then have to decide where those cuts should
fall. They have to figure out whether they can put more of
their own money in at the expense of education and other vital
areas of the budget. But these are cuts. These are cuts in
federal funds changing the partnership dramatically.
Ms. Castor. And how many Americans would be left without
health care services?
Ms. Castor. Well, as I said, the estimate from a previous
proposal was somewhere between 14 and 20 million and the cuts
get bigger over time. And they also can get bigger if things
happen that are not anticipated. So the trajectory in my
testimony shows what would happen based on expenses growing as
expected.
Ms. Castor. And we even have Republican governors speaking
out against this approach. For example, Governor Charlie Baker
of Massachusetts wrote recently we are very concerned that a
shift to block grants or per capita caps for Medicaid would
remove flexibility from states as a result of reduced federal
funding. States would most likely have to make decisions based
on fiscal reasons rather than the health care needs of
vulnerable populations.
Isn't that true that when you devastate care and take a
hammer to the federal-state partnership you are really saying
to states you have less flexibility to care for your citizens?
Ms. Solomon. You certainly can innovate. States have been
innovating and they have been getting flexibility to provide
some upfront funding to build the technology they need to
coordinate across providers and deliver care in a more
coordinated way. That is gone under these proposals.
Ms. Castor. Thank you. Mr. Chairman, I will yield back my
time.
Mr. Burgess. The gentlelady's time has expired. The chair
thanks the gentlelady. The chair recognizes the gentleman from
Texas, the vice chair of the full committee, 5 minutes for
questions, please.
Mr. Barton. Thank you, Mr. Chairman and thank you for
holding this hearing. I was a little surprised to hear the tone
and the tenor of our friends on the minority side. I have been
on this committee 30 years. I missed the memo apparently where
it said we were trying to gut Medicaid, destroy the program.
The memo I got said that we have a budgetary crisis and we
need to find ways to strengthen the program to reform and
improve it and make sure that we get the money to the most
vulnerable, and in doing that hey, we might give the states a
little bit more flexibility. We might change the waiver process
which is fairly bureaucratic. Again I am only the vice chairman
and the past chairman and I have only been on the committee for
30 years, so maybe there is some things that have happened
behind my back and if so I will take that up with Chairman
Walden and make sure it doesn't happen.
I do know that the federal budget is about $4 trillion, Mr.
Chairman. I know that the federal government is right now
spending about $350 billion on Medicaid and that is supposed to
double in the next few years. In total, state and federal
spending is going to be about a trillion dollars. I also know
that the expansion of Medicaid, which the Affordable Care Act
engendered, added about ten million people to the rolls and we
are spending in the neighborhood of $60 billion to cover those
people and that as the federal hundred percent match is phased
out the states are scrambling to find ways to continue to cover
this.
So I guess my first question to Dr. Roy, do you think it is
possible to maintain the existing growth rate in Medicaid
spending at the state and federal level and actually do it in a
way that the hardworking taxpayers of America can afford?
Mr. Roy. No, Mr. Barton. And I will go back to something
that Ms. Castor said. There is no state in America that does
not make decisions about care and coverage for the Medicaid
population based on fiscal consideration today. Every single
state does that today. Every single state did that last year
and the year before that and the year before that because for
every state in America Medicaid expenditures are either the
number one or number two line item in their budget.
So fiscal considerations are dominant in the way states
have to manage their Medicaid programs and they don't, they
simply don't have the flexibility to focus their resources,
their limited resources on the needs of their populations.
Mr. Barton. So you could say that the states right now are
capitating Medicaid spending.
Mr. Roy. They effectively are and in very ineffective ways
by reducing reimbursement rates to physicians and to other
providers. And if we gave them full flexibility, particularly
if we gave individuals the flexibility to control the dollars
that are being spent on their behalf for the health care needs
that they have, we could dramatically improve their access to
primary care, their access to specialist care and their access
to high quality hospitals in a way that would substantially
improve their health outcomes.
We have been talking a little bit today about health
outcomes for people in Medicaid versus being uninsured. The
most important point I could make today is that health outcomes
for people on private insurance are dramatically better than
those for people on Medicaid. And so more----
Mr. Barton. Well, we have three, this is called a
legislative hearing so we have three bills before us. One of
them has the radical idea that you should count lottery
winnings. Now there are not very many of these lottery winners,
6,000 I think nationwide. Would that gut Medicaid if we
actually counted lottery winnings as part of the income test?
Mr. Roy. Not in the least. If someone can afford private
coverage or otherwise is not the kind of person who the
Medicaid program is designed for it just defies common sense
why we would devote those scarce resources to subsidize those
individuals as opposed to the individuals who need the help.
Mr. Barton. Congressman Flores has a bill that would say we
give the states the discretion on covering undocumented workers
or illegal aliens. They could cover it with their dollars but
the federal government wouldn't have to automatically cover
them; now that is a little bit more controversial. These are
people that have come into country illegally, don't have the
proper documentation. Do you think that the majority of the
citizens and the taxpayers of the country would support that
idea?
Mr. Roy. As the child of immigrants to this country from
this country from India I find it very puzzling that we are
even having this debate. It seems entirely commonsensical that
we would restrict Medicaid funding and resources to people who
are legally resident in this country.
Mr. Barton. In my congressional district if I did an
opinion poll it would be about 95/5, 95 in support of
restricting Medicaid to citizens or legal residents. With that
Mr. Chairman, I yield back.
Mr. Burgess. The chair thanks the gentleman. The gentleman
yields back. The chair recognizes the gentleman Mr. Lujan, 5
minutes for questions, please.
Mr. Lujan. Thank you, Mr. Chairman. And Ms. Solomon, at the
Center on Budget and Policy Priorities have you had a chance to
review the Republican proposal, some of which was listed in
Speaker Ryan's Better Way document on----
Ms. Solomon. Yes.
Mr. Lujan [continuing]. What they would do to Medicaid? Can
you talk about that?
Ms. Solomon. Yes. I mean I have mentioned it. It would
really just shift huge amounts of costs to the states, as I
said, along with the decisions of how to absorb the major cuts
and also leave states shorthanded, essentially, if things that
were not anticipated happened such as an epidemic. We have had
the Zika threat, drugs, new blockbuster drugs, the ability to
provide those to people, the aging of the population; all of
the proposals are based on what the population looks like now.
And we have that bulge of the Baby Boomers which right now
are at the sort of lower end of the seniors, 10 years from now
that is an older population and 20 years even more so. So none
of that is really taken into whatever the formula would be that
we would have a lot more people who are very old and need a lot
more care. So basically states would have to figure out how to
deal with that.
Mr. Lujan. So Ms. Solomon, I know this is a complex issue
as we are trying to better understand it to do our due
diligence to make a difference to keep this program strong. The
way that I understand, when the federal government shifts costs
to the states that means that the federal government is going
to cut the federal investment and put that burden on the state.
Is that a fair assessment?
Ms. Solomon. That is it. I mean that is exactly what these,
we call them block grants, we call them per capita caps, but
they are cuts. They are cuts in federal funds when it is very
easy for Congress to do it because it really leaves the states
with the hard decisions of how to absorb that change in the
partnership between the federal and state government.
Mr. Lujan. I appreciate that Ms. Solomon. So if there is
any question associated with the Republican plan, I think
Speaker Ryan has something called a Better Way that everyone
can go take a look at that pamphlet. And when we are talking
about what is happening here, if you are saying and using
terminology to shift the cost from the federal government to
the states that means you are cutting the program. I don't know
why we are parsing over this. It is what it is. Let's just
accept the programs that both sides are putting forward here.
Now there is a lot of conversation, Ms. Solomon, associated
with one of these areas and a term that we are learning more
about called the reasonable opportunity period which is being
talked about in one of these bills. It is my understanding that
there is a verification process that has been established when
someone applies for these programs that you have to submit your
Social Security Number or documentation.
In cases maybe where Social Security doesn't exist, but
where it does exist you submit that that is verified Social
Security Administration whether someone is eligible or not. If
they don't have their Social Security Number or their Social
Security Number process is not one that is recognized by the
Social Security Administration then an applicant would submit
paperwork to show that they are citizens and then they would be
put in this what is called an ROP. So can you tell me if there
is challenges for naturalized citizens?
Ms. Solomon. Yes.
Mr. Lujan. Do they have to submit additional paperwork and
then would they land up in an ROP? Would citizens born outside
of the United States fall into that situation and have to fall
into an ROP and namely children born on military bases outside
of the United States, would their number fit into that process
and would they fall into this ROP?
Ms. Solomon. Yes, those are the groups that would be most
affected by the bill that is before you because that bill if
you look at the language it talks about aliens declaring that
they are citizens. It actually affects the verification process
for people who are attesting to being citizens or U.S.
nationals. A vast majority of those individuals have their
citizenship verified electronically pretty instantly by the
Social Security Administration.
There are several groups, the groups that you mentioned,
naturalized citizens, people who are born abroad, say, to
military parents and some newborns who have to provide
documentation because Social Security can't verify it quickly.
The reasonable opportunity period was put into the law after we
saw large numbers of children and others not being able to get
through this without delays so that they could get benefits
while they were submitting their documentation.
Mr. Lujan. Thank you, Ms. Solomon. And as my time expires,
Mr. Chairman, I think that we all want to make this system
work, but citizens of the United States should not be left out.
Thank you very much.
Mr. Burgess. The gentleman yields back. The chair thanks
the gentleman. The chair recognizes the gentleman from
Illinois, Mr. Shimkus, 5 minutes for questions, please.
Mr. Shimkus. Thank you, Mr. Chairman. It is great to be
here, great new hearing room and so I get to do the inaugural
chart through this new technology. Obviously we are talking
about the budget and we are talking about spending. I think you
can see it.
[Chart shown.]
Mr. Shimkus. You should be able to see it right--can't they
see it in front? All right, see, it is all new to us. So you
got it right in front of you. Does anyone dispute this as a
federal budget pie in 2015? No. Mr. McCarthy?
Mr. McCarthy. No.
Mr. Shimkus. Ms. Solomon? No, that is it. Now, so we are
debating--look, this is an important budget chart to show that
we fight our budget on the blue area which is the discretionary
numbers. The red is the mandatory, the red is spending out of
control and as that continues to grow it squeezes the blue
portion.
And Ms. Solomon, you mentioned it on Medicaid, or someone,
Mr. McCarthy, you mentioned it on Medicaid. As Medicaid in the
states expand it squeezes schools, public health, state
budgets, so the debate on reforming the process to make it
solvent, I think, is a very fiscally responsible debate, but
people have to see the whole chart. So really, our challenge
here is try to address the mandatory spending and make it
fiscally sustainable and then we don't have these discretionary
budget fights. So that is just a good way to start.
Now I want to go to specific questions. Mr. Guthrie just
returned. He kind of talked a little bit.
You can take that chart down now unless we want to keep it
up just for the allure of it.
But Mr. Guthrie at the end of his filibuster kind of
started talking a little bit about the, what we call the work
requirement. So I know, Mr. Roy, you have done some research on
that. Can you talk about that ``work requirement'' as far maybe
some possible reforms?
Mr. Roy. Yes. So let me highlight, Mr. Shimkus, one of the
things that we in the health policy community support about a
work requirement and that is that there is a lot of emerging
research that shows that individuals who have health insurance
and who have health care needs who have work, who have a job
are much more engaged in their actual health care and just the
wellness that comes with having a job, going to work every day,
feeling needed.
A lot of these things are subtle, but the research is quite
compelling in showing that people who have jobs do a much
better job in terms of health outcomes versus people who don't.
Not because of income because you can stratify these results
for income, but because of their engagement in their own lives
and their own health. And so a lot of what I think our ambition
is is to see a work, a relationship between work and the
Medicaid program and other programs that help low-income
individuals so that there is an encouragement for those
individuals to be engaged in their lives and engaged in their
health.
Mr. Shimkus. And these are not, the elderly or the disabled
are not involved in this work requirement discussion, correct?
Mr. Roy. Correct.
Mr. Shimkus. And Mr. McCarthy, having your experience in
the state you know that the 1115 waiver supposedly has that
ability to do that. Can you talk about how a requirement that
an individual not just take from the Medicaid program but
actually give back to the community can help that individual?
Mr. McCarthy. So from the standpoint of what we saw in Ohio
as many of the people on the program were working so we
believed--and we had a Healthy Ohio waiver which we turned into
CMS that was disapproved--that having people participate not
only in their health care but in just making their lives better
would be something that would be beneficial to everyone.
I think one of the things that we get distracted on, and
somebody brought this up earlier, was the issue just simply
work. There was a discussion of could it be education or other
things that are going on, just engagement of a person to say
here is the things we need to do. Many people are already doing
it. There is a subset that is not, so let's engage them to
figure out what that is that they can do to better themselves.
Now there was----
Mr. Shimkus. Let me in my last 45 seconds ask, don't we do
this already for TANF, for the Temporary Assistance for Needy
Families, isn't there some quantification right there already
and that could be used in that same process?
Mr. McCarthy. Yes.
Mr. Shimkus. I yield back my time.
Mr. Burgess. The gentleman yields back. The chair thanks
the gentleman. The chair recognizes the gentleman from
Massachusetts, Mr. Kennedy, 5 minutes for questions, please.
Mr. Kennedy. Thank you, Mr. Chairman. I appreciate the
opportunity here. I want to thank the witnesses for being here,
discuss an important topic to our health care system and the
underpinnings for how we try to make good on a promise that
everyone in this country gets access to the care that they need
when they need it and that is a fundamental bedrock for not
just our medical community but our society. No one wants to be
checking a health insurance card after you get hit by a bus, or
a passport or for a green card.
So the question then is, getting back to the pie chart Mr.
Shimkus put up, is yes, there is issues on the discretionary
spending and the mandatory spending side, and the focus of this
hearing is looking at that smallest piece of the mandatory side
and taking out that side interest on the debt and squeezing out
efficiencies there, which I would point out is close to 50
percent of the Defense Department budget.
So I think it is also important to put these reforms in
context and to put a human side on them too. As we consider
these reform bills that we go through we should remember that
there is by some estimates 32 million Americans that are on the
cusp of losing health insurance depending on what this
committee decides to do.
I toured a series of community health centers last week in
my district and you heard the same message from their doctors,
from their patients, from their advocates, from their staff
which was don't sabotage the Affordable Care Act, don't gut
Medicaid expansion and don't jeopardize the progress that we
have made in our health care system. It is not as simple as
redirecting that funding.
As more and more people lose coverage and access to
preventive care which many of them can get from a community
health center they turn to emergency room treatment, then
uncompensated costs go up at hospitals and premiums increase
with them. One of the health centers I visited, the North Shore
Community Health Center, Medicaid makes up 60 percent of the
total patient service revenue. Statewide community health
centers serve over one-fifth of all Medicaid beneficiaries in
the Commonwealth of Massachusetts and account for less than two
percent of our Medicaid expenditures.
So yes, while we need to look for innovative ways to
deliver new care we should dismiss catchy ways to kick people
off of Medicaid. We should be debating reforms that would
replicate those efficiencies that we have seen across the
country. In Massachusetts by the way--that has a 2.8 percent
unemployment rate and a 2.8 percent uninsured rate, the idea
that the Affordable Care Act is somehow a job killer is
demonstrably false, as we have seen in Massachusetts.
So we also know that going forward the immediate repeal of
the Affordable Care Act would result in a loss of three million
jobs worldwide, would lead to $165.8 billion in hospital losses
over the next 8 years, Medicaid expansion would, in fact the
progress we have made on lowering marketplace premiums would be
gone, and repeal without a replacement would lead to nearly
44,000 deaths annually by conservative estimates. There is a
reason why Republican governors, many of them represented in
states that my colleagues here represent, are begging Congress
to try to defend that Medicaid expansion.
And I would like unanimous consent, Chairman, to submit for
the record a letter by my governor, Republican Charlie Baker,
in response to a solicitation put out by leader Kevin McCarthy,
detailing some of the reforms that he would like to see going
forward as a health care executive, former health care
executive.
And he mentions in here, Chairman, that maintaining state
health care safety nets including retaining existing federal
health subsidies and uncompensated care pools that support
health care coverage and charity care providers, avoiding
proposals that only offer more flexibility and control in
exchange for shifting costs to states, providing flexibility
with then pulling back money does not solve the problems that
we have heard from today.
Mr. Burgess. Will the gentleman yield for action on his
unanimous consent request?
Mr. Kennedy. I will for that. Thank you.
Mr. Burgess. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Kennedy. Thank you, Mr. Chairman. So I realize I
filibustered there for a little while, apologies. But Ms.
Solomon, two very simple questions and then just so I leave
with: do you support repealing the Medicaid expansion and do
you believe that health outcomes improved in states with
expanded Medicaid versus those that did not?
Ms. Solomon. I obviously support the expansion and do
believe that it has made a huge difference in the states that
have expanded in addition to lowering the un-insurance rate,
more people getting care, its evidence is indisputable.
Mr. Kennedy. And then very briefly since we have about 30
seconds left, the largest payer of mental health services in
this country is Medicaid. There has been in this committee a
bipartisan commitment to look at some of the issues around
mental health. How can we possibly address the systemic
failures of our mental health system without addressing
Medicaid?
Ms. Solomon. You can't because it really is providing the
foundation for things such as the initiatives that were in the
CURES bill and elsewhere. Those are going to wrap around the
foundation that is provided through Medicaid for behavioral
health services.
Mr. Kennedy. Thank you and I yield back.
Mr. Burgess. The gentleman yields back. The chair thanks
the gentleman. The chair recognizes the gentleman from
Pennsylvania, Mr. Murphy, 5 minutes for questions, please.
Mr. Murphy. Thank you, Mr. Chairman. First, Dr. Roy, you
were talking about how people who are on Medicaid don't really
differ much from people who have no insurance at all and cited
a few studies, looked at things like cancer, diabetes rates and
things like that. And I just want to make sure I got it on the
record you are not implying that being on Medicaid causes
cancer.
Mr. Roy. Of course not.
Mr. Murphy. That being on Medicaid worsens cancer or
reduces life span, and you also say that people who are on
Medicaid, the doctors are paid below market rates, and you are
not saying that when doctors are paid less that reduces life
span, but you are talking about an access to care.
And I believe one of those studies, I looked it up here, is
also Kwong, et al., University of Pittsburgh, my alma mater.
But what is happening is that people actually come in worse.
They put off care. And this is where I agree with some of my
colleagues on the other side of the aisle, when people don't
have insurance they put off care.
And it has actually been some of the problems of the
Affordable Care Act. It was supposed to have been that it would
increase outpatient visits and actually reduce inpatient and
emergency room visits and it has had the opposite effect
because what people have found they have high co-pays and
deductibles. Does that make sense?
Mr. Roy. That is correct. Emergency room volume has
increased through the Medicaid expansion and it has not
increased the rate of primary care physician access relative to
what Medicaid's performance was previously.
Mr. Murphy. Mr. McCarthy, I want to understand. You had
made some references in your comments about co-pays and
premiums that were reasonable and enforceable which should
keep--is that meant to keep people from the emergency rooms and
keep those costs down?
Mr. McCarthy. It is designed, the purpose of it is to have
a person actually make a choice of where they are going to go
and make a reasonable choice to say----
Mr. Murphy. I understand. And the same thing with
formularies and for drugs there, because initially we were
trying to grapple with that when dealing with the cost of drugs
that formularies and negotiated drug prices in selecting one
can be part of a cost savings, correct?
Mr. McCarthy. Right. The problem with the Medicaid program
right now is that a state is forced to cover every FDA-approved
drug and it leaves you with no negotiating room for new drugs.
Mr. Murphy. OK. And part of the issue we dealt with here on
another hearing was that when a state chooses, for example, a
formulary in mental health drugs that assumes that all anti-
depressants are anti-depressants the same and all anti-
psychotics are the same just because they have that same
function, they are not the same because they have different
side effects and because of different side effects people may
not take them. When they don't take them their situation gets
worse.
And I know that Ms. Solomon, you also made some comments
about when people have to make a choice about care and they are
on waiting lists to get into long-term care. And I am assuming
you would be supportive that if there was an option for an
alternative payment model and if someone could be cared for in-
home that would save money and probably be more preferable to
that patient. Am I correct?
Ms. Solomon. Absolutely. And there are multiple options and
flexibilities for states that want to do that including the new
state option for home and community based services. This is
where there is enormous flexibility in Medicaid for states to
pick up different ways of doing that.
And as Figure 1 in my testimony shows, the result has been
that----
Mr. Murphy. I have to cut you off. I am trying to get to
another point here, but if you can get me that I want it
because here is the thing I want you to think, although I think
we are not there yet. We are talking about moving around how
things are paid for, whether doctors are paid more, what is
happening there. A number that keeps coming up to us is that 5
percent of the people on Medicaid account for 55 percent of
Medicaid spending and they are not a homogeneous group.
One thing I would like to submit, Mr. Chairman, is an
article by Gregorio, et al., on inflammatory bowel disease in
medical homes, talking about this in an op-ed that I wrote
called A Better Model for Healthcare in America from the
Washington Examiner that when you actually wrap service around
something and you identify the over utilizers versus someone
who just is a high utilizer you can make a massive difference.
So not all of those people on Medicaid are the same, and it
isn't just paying doctors more. This is where I want to know, I
am not sure the bill, I mean the bills we are dealing with
today have some effects here on spending but they don't have an
effect on changing medical models. So now Ms. Solomon, if you
can complete your thought, how do we change an alternative
spending model that saves money in Medicaid and provides better
care? You have 30 seconds.
Ms. Solomon. It is going on today in multiple states that
have done exactly what you are saying, identify those high
utilizers. The health home program that was in the Affordable
Care Act, things like the programs at the Camden Coalition
which has become a national model----
Mr. Murphy. Very important. Can we do more to incentivize
those, because as some of those even worked it is kind of state
by--the Camden model is a great model, but the question is, and
this is where I would like all of you to get back to this
committee, it is extremely important that we find ways of
effectively helping those and it isn't just going to be raising
their co-pays and deductibles to do that.
With that Mr. Chairman, also one other thing I want to ask
unanimous consent to submit for the record. It is a letter from
the National Association of Psychiatric Health Systems too, on
these models too.
Mr. Burgess. So just to clarify the gentleman had two
unanimous consent requests?
Mr. Murphy. Three.
Mr. Burgess. Was there one embedded in that previous
discussion?
Mr. Murphy. There is three. One is an article by Gregorio,
et al., where----
Mr. Burgess. Without objection, so ordered.
The gentleman's time has expired. The gentleman yields
back. The chair recognizes the gentlelady from California, Ms.
Eshoo, for 5 minutes for questions, please.
Ms. Eshoo. Thank you, Mr. Chairman. Glad to be back on the
subcommittee. I am a returning member because I did serve on
this subcommittee for several years. Thank you to the
witnesses. There is an advantage to coming in a little later in
terms of asking questions because we have been listening to
both questions, answers, comments of members.
My takeaway on the three bills here is that they, all three
of them, change Medicaid eligibility requirements, and when
eligibility requirements narrow some Medicaid beneficiaries who
previously qualified for coverage will no longer qualify and
will lose their Medicaid coverage. So the results in coverage
are essentially being taken away from these people, so this is
subtraction. This is subtraction. That is my take on the three
bills. I could say more about them. I am just fascinated with
some of the things that have been said.
Now I want to go to you first, Dr. Roy. I am not familiar
with your organization, the Foundation for Research on Equal
Opportunity. Who funds you?
Mr. Roy. We are a nonpartisan, nonprofit think tank that
has donors from----
Ms. Eshoo. Yes, but who funds you? Where does the money
come from?
Mr. Roy. The money comes from donors just like every other
think tank who are individuals.
Ms. Eshoo. And who are they? Who are your major donors?
Mr. Roy. We don't disclose our donors. We are 4 \1/2\
months old.
Ms. Eshoo. Does the committee require in the witness
background to submit to the committee who funds organizations,
et cetera that witnesses come here to testify on behalf of? If
we don't I think that we should consider that.
Mr. Roy. I am not testifying on behalf of donors. I am
testifying on behalf of the Foundation for Research on Equal
Opportunity and myself.
Ms. Eshoo. Well, that is why I am asking about the
Foundation because we have foundations and we have foundations.
But since you don't wish to disclose, I think that the
committee should for all witnesses make that determination and
make it a requirement so that members do know.
Now did you support the ACA when it was passed?
Mr. Roy. We don't take institutional positions on
legislation.
Ms. Eshoo. Do you support it today?
Mr. Roy. What I do support----
Ms. Eshoo. No, no, no. Answer it. I only have 5 minutes.
Mr. Roy. What I do support is universal coverage, and we
have put out a plan to achieve universal coverage.
Ms. Eshoo. Do you support the elimination of Medicaid?
Mr. Roy. I don't support the elimination of Medicaid. I
support covering everyone who needs financial assistance to
afford health insurance.
Ms. Eshoo. Right. In your research--the chairman of the
full committee made mention of millionaires and billionaires
who use Medicaid. In your research have you found anyone in
those two categories that are in Medicaid, using Medicaid?
Mr. Roy. There are lottery winners who by law if they
receive all their income in a lump sum in 1 month----
Ms. Eshoo. So it is lottery winners, and how many of those
are there?
Mr. Roy. It is not merely lottery winners. It is anybody
who receives a lump sum payment. So for example someone who
received a financial bonus from work----
Ms. Eshoo. So if someone is in an automobile accident and
there is a settlement then that makes them a millionaire or
billionaire. I have to tell you that this is a bad rub when
these things are thrown around that millionaires and
billionaires are on Medicaid.
Mr. McCarthy, do you support eliminating the federal
dollars of Medicaid and then have the states be the
laboratories of invention and be able to expand or contract or
write their own rules with their own money and believe that
people will still be served?
Mr. McCarthy. I believe that people can be served if the
states are given the proper flexibilities in whatever----
Ms. Eshoo. No, I am asking about the federal dollars
though, picking up on Ms. Solomon's testimony.
Mr. McCarthy. If the federal dollars change the states
will----
Ms. Eshoo. Do you support subtracting the federal dollars
out and just have the states carry out with their own dollars
whatever they want to design?
Mr. McCarthy. If you are asking if all federal dollars, no.
That would be very difficult for a state to do.
Ms. Eshoo. Sure would. And at what point do you support the
reduction of federal dollars? What level reduction are you----
Mr. McCarthy. It depends on what flexibilities are given to
states. Those two things have to go hand in hand.
Ms. Eshoo. So you don't want to name the amount of dollars
that you are willing to subtract as a former director of the
program from a state, from a major state.
Mr. McCarthy. Again it would depend on what flexibilities
come with it.
Ms. Eshoo. Ah-ha. So we want the money for sometimes, we
don't know how much but someone is going to decide it. That is
quite a proposition. Well, what the conclusion that I have come
to, and it is not hard listening to the testimony, is that
there is really not support for this program and so there is a
nitpicking around the edges.
In anything we do there is always room for improvement, but
this, I don't think today's hearing is about improvement. I
think it is about elimination, subtraction and I don't----
Mr. Burgess. The lady's time has expired.
Ms. Eshoo [continuing]. Think your surveys and whatever you
presented in your testimony are reliable or acceptable because
I think they hurt people. Thank you.
Mr. Burgess. The chair would request that we respect other
members' time, and I am now going to recognize Mr. Lance from
New Jersey 5 minutes for questions. Mr. Lance lost interest.
Mr. Griffith, 5 minutes for questions, please.
Mr. Griffith. Thank you very much. I appreciate our
committee working hard on this. As you have heard we can always
make things better. And one of the things that the American
people want and my people that I represent in Virginia and my
district want is folks to make sure that if they need the help
they get it. But if they suddenly find themselves millionaires
because they won the lottery or they have gotten some other
lump sum payment, they don't think those folks ought to
necessarily be getting Medicaid.
And so while I have heard it said that throwing it around
that millionaires are getting Medicaid is a bad rub, currently
it is a bad rub the average hardworking American taxpayer is
paying for it, wouldn't you agree, Dr. Roy?
Mr. Roy. My foundation, the Foundation for Research on
Equal Opportunity is dedicated to expanding economic
opportunity for those who least have it. Generally speaking,
millionaires and billionaires are not people who at least have
economic opportunity in this country.
Mr. Griffith. And in fact when I read the bill I noticed
with some interest that I thought it was fairly generous
because it basically allocates it out as roughly $40,000 a
month for the first, say, hundred thousand and then it is more
than that. So it is not like we are saying that if you win a
million dollars you can never be on Medicaid again, it is
fairly loose. Wouldn't you agree?
Mr. Roy. I mean to me it is very simple. If you can afford
to buy health insurance yourself, please do so. If you can't
afford health insurance on your own and you need the financial
assistance and are eligible for the financial assistance that
Medicaid provides then let's find a way to get you that
assistance. It seems completely non-controversial and I really
don't understand why members of the minority find this
problematic.
Mr. Griffith. And I am going to switch gears but stick with
you, Dr. Roy, if I might. In your written testimony, and I
don't believe you have had an opportunity and I apologize if I
have missed it somewhere, but I don't believe you have had an
opportunity to discuss it. On page 8 of your written testimony
you start getting into issues about how ``the interest of state
and federal governments have diverged in Medicaid because of
the way it is set up.''
And I am not sure these bills directly get to that but I
thought that was interesting testimony because it is one of the
things that has been a bad rub for Virginia. And that you then
go on to talk about how the federal government has done some
things that maybe they ought not to have done and the state
governments have responded and done some things where they came
up with creative financing and you actually reference Medicaid
hospital taxes. And in Virginia we rejected that concept
because we saw it as a tax on the sick and that they wanted to
create a bed tax where, if you were a Medicaid patient you
would get the money back as increased costs and you would
receive as you said in your testimony whatever your match was,
in Virginia it is 50 percent but you used 60 percent in your
example, you would get that money back and so the states have
actually gamed the system in some states to get more federal
dollars from Medicaid and in some cases like New York they have
actually had to have reforms because they gamed it so much they
had so much money floating around they were wasting millions of
dollars. Isn't that true?
Mr. Roy. Absolutely. And a number of the states in fact
nearly I would say a majority of the states that have expanded
Medicaid under the ACA in theory there----
Mr. Griffith. Just a second. Mr. Chairman, I am having a
hard time hearing.
Mr. Burgess. The gentleman is correct and the time will
suspend. The chair notices a significant difficulty hearing the
testimony of the witness even with amplification, so could I
ask conversations be taken off the dais in respect to our
witnesses who have agreed to be with us this morning?
Mr. Griffith. Thank you.
Mr. Burgess. The gentleman continues to suspend.
Conversations off the dais to allow the witnesses a chance to
be heard. The chair thanks the committee. The gentleman may
proceed.
Mr. Roy. A majority of the states that have expanded
Medicaid under the ACA have used provider taxes and health
insurance premium taxes to fund the theoretical ten percent
match that they are supposed to contribute. We have heard some
descriptions of the so-called savings that states have achieved
by expanding Medicaid. There are no so-called savings.
What has happened is that state governments have raised
taxes on Medicaid providers and on managed Medicaid managed
care companies and use those revenues to fund the Medicaid
expansion in their states, in other words increasing the
federal liabilities for the Medicaid programs in ways that the
ACA did not contemplate.
That is not just true of the ACA. In my written testimony I
cite the fact that on average the FMAP, the match rate at the
federal level is around 58 to 60 percent. At least that is what
it is supposed to be on paper, in reality it is closer to 70
percent because of these taxes that states use to game the
system and attract raised costs in the Medicaid program and
drive revenue to the states from the federal government that
they otherwise wouldn't gather and aren't supposed to obtain.
Mr. Griffith. And I want to summarize and probably then
have to conclude, but in summary, if the federal government
gives the state $2 million and the state was only going to
spend a million dollars, the state has not saved a million
dollars, the federal government has spent a million dollars it
maybe didn't need to.
Well, I support all three of these bills, but I would
invite all of our witnesses if you have ideas on ways that we
can improve these bills, please let us know because we are
trying to make sure--I agree with the philosophy, but if there
is some way that we can make the bills better, please let us
know and I would appreciate it very much if you will give that
in writing. That would be great. And with that Mr. Chairman, I
yield back.
Mr. Burgess. The gentleman yields back. The chair thanks
the gentleman and the chair recognizes the gentlelady from
Colorado, Ms. DeGette, 5 minutes for questions, please.
Ms. DeGette. Thank you so much, Mr. Chairman, and it is
good to be back on the committee, on the subcommittee, although
this morning I can't help but feel like I am in a Lewis Carroll
book because here we are talking about lottery winners and
undocumented people getting Medicaid, but then the testimony
particularly from the majority witnesses is all about the full
Medicaid expansion.
We saw this yesterday in the Oversight and Investigations
hearing on the Medicaid expansion and I think we really need to
clarify what we are talking about. I don't think the biggest
problems facing Medicaid are lottery winners getting Medicaid
advantages, and also under current law although it may not be
good from a health care policy standpoint, people who are not
citizens or have documentation they can't get Medicaid right
now under current law. And with respect to people who are
vulnerable, as has been demonstrated by all of the evidence, if
you expand Medicaid then you actually are more able to insure
the vulnerable.
So let's talk about what we are really discussing today
under the guise of these three bills. What we are really
discussing today is the majority's intention to gut the
Medicaid expansion for a variety of reasons. And that is what I
want to talk about.
Ms. Solomon, I want to ask you, now I understand that in
the Medicaid expansion under the Affordable Care Act 80 percent
of the people who are getting that Medicaid expansion are
actually working; is that right?
Ms. Solomon. That is right.
Ms. DeGette. What is the situation with the other 20
percent of the population?
Ms. Solomon. So it is varied, but you do have a large share
of people if you think about who was not covered by Medicaid
before and is picked up by the expansion you have the people we
sort of shorthand call the childless adults. And these are
people that didn't fit a category and we did away with the
categories. So you do have people who are chronically homeless,
people with substance use disorders, people with mental illness
and then just a group of people who are caring for family
members and low income, unable to work.
So it is probably a diverse population, but there really
isn't--the people that are mostly affected are the people who
didn't have a pathway to coverage before and who were working
because they were working in jobs without coverage.
Ms. DeGette. And how did those people get their health care
before we had these Medicaid expansions?
Ms. Solomon. They didn't. I mean they didn't have insurance
so they----
Ms. DeGette. Well, if they got sick what did they do?
Ms. Solomon. Yes. They went to the emergency room. They
went to hospitals. They went to community health centers that
would----
Ms. DeGette. Right, and eventually we the taxpayers paid
for that, right?
Ms. Solomon. Correct.
Ms. DeGette. Now you heard Dr. Roy say that he did a
study--and Doctor, I read your testimony and also the article
that you wrote that you cited in your testimony. And he said
that the data shows that people on Medicaid have no better
outcomes than people who are uninsured. Is that supported by
the rest of the data?
Ms. Solomon. I don't think so. People are getting care. And
I think again the studies are very, very narrow and they look
at people with very serious illnesses, and I think Dr. Roy said
that they came in late. They didn't have their conditions
diagnosed, and that is exactly what the Medicaid expansion is
allowing. I would just commend everybody to look at the
dashboard in Louisiana where they are tracking the people that
are being found through their pretty new expansion.
Ms. DeGette. OK. So some of you who were at yesterday's
hearing in O&I, I talked about some of the people I had last
week in Denver. I had a listening session for people to come
and talk about their experiences in the ACA. And I had one
woman, Lisa Scheim of Denver. She developed a neuroimmune
illness and so she has only been able to work part-time.
Because she works part-time she is not eligible for insurance
through her employer, and before the ACA she was rejected for
insurance because she had a preexisting condition.
We had a high risk pool in Colorado, but the premiums were
so high she couldn't buy in. So then she got ulcerative colitis
and an autoimmune disease, she couldn't even go in for a
diagnosis because she couldn't pay for it. Finally she got a
part-time job but she couldn't get insurance. In the meantime
her medical bills went to collection and she even got a letter
that said she was going to jail. So now she is on the Medicaid
expansion. She works part-time, she gets her treatment, and if
we eliminate this expansion she now won't have insurance again.
Mr. Chairman, those are the types of people who are getting
health insurance now. I can't help but believe Lisa Scheim and
all the other millions of people who are getting insurance are
getting worse care now than no care before. I yield back.
Mr. Burgess. The chair thanks the gentlelady. The
gentlelady yields back. The chair recognizes the gentleman from
Florida, Mr. Bilirakis, 5 minutes for questions.
Mr. Bilirakis. Thank you, Mr. Chairman, I appreciate it and
I thank the panel for their testimony.
Mr. McCarthy, in your testimony you noted that giving
priority to states with the biggest wait lists would only
incentivize states to have high wait lists. I am from Florida
and we are the number two when it comes to the size of our home
and community based care waiting lists, and I understand Texas
is number one. Right, Mr. Chairman?
You also mentioned tying funds to the Money Follows the
Person program. There are 44 states that have that program,
Florida does not. How do you propose allocating funding to
promote more home and community based care, something I
strongly support, and yet not disadvantage states such as
Florida and Texas that have a greater need?
Mr. McCarthy. It has to do with how we provide that
incentive. So the idea is like in Ohio--our Money Follows the
Person program, when we started we had about 600 people that we
moved out of institutions. By the time I left that number was
over 5,000 people. So in 6 years we were able to do it. We
focused on how to get people out of institutions, looking at
that to pull people out.
We also used the money that came to the state by the one
percent increase for rebalancing, so we used that also. So my
point of it was if you were to say that it only goes to the
states with the highest wait lists, then in Ohio my incentive
would be to let the wait list grow that I have so as to be able
to access that that funding was 90/10 in the bill, so that
would be my incentive to get there.
So instead of doing that I was saying, how do you just tie
it to programs that are out there and hopefully other states
will be looking at what we have done in Ohio or other states
and learning from that and that is where CMS can come in and do
a better job of getting states to collaborate to figure those
different pieces out to move forward in those areas.
Mr. Bilirakis. Thank you. Again for Mr. McCarthy, Medicare
is moving towards value-based payments. Some forward-thinking
Medicaid directors of programs have been adopting this model
while others have been much slower. Can you talk about why
value-based purchasing is important and what some of the
existing barriers are both regulatory and statutory that need
to be removed? How can we promote, really, generally how can we
promote innovation?
Mr. McCarthy. So Ohio is a State Innovation Model grant
winner and so that was a benefit to the state to move forward
in that. And the reason value-based purchasing is important in
Medicaid is because it rewards better health outcomes, it
doesn't just put money into the program.
So in Ohio for instance even in this last budget that was
introduced Monday, there weren't just simply for physicians
putting money into increases in fee-for-service physician
rates. It was going into the per member per month amount going
to doctors which then get rewarded for bringing down costs but
having better outcomes.
And so that is why value-based purchasing is important. The
barriers that you run into are all at the CMS level. I have
talked to CMS about this. The Center for Medicare and Medicaid
Innovation don't talk to CHDS at the Medicaid side. And for
instance in Ohio we ran into a barrier. The only way we could
do patient-centered medical homes in the fee-for-service world
was through a state plan and that meant then we had to bring up
a PCCP program, which we didn't run in Ohio.
So there is this whole barrier of how do we get there?
Those things need to be waived, because what we were trying to
do is bringing more value to the program and increasing
outcomes.
Mr. Bilirakis. Thank you very much. I yield back, Mr.
Chairman.
Mr. Burgess. The gentleman yields back. The chair thanks
the gentleman. The chair now recognizes the gentleman from
Oregon, Dr. Schrader, 5 minutes for questions, please.
Mr. Schrader. Thank you, Mr. Chairman. I appreciate having
the hearing, and some of these fixes to the Medicaid population
issues and the Medicaid expansion issues I think are fine. I
think unfortunately it doesn't get at the big gorilla in the
room which is what do we do with the Medicaid expansion
population and how do we deal with Medicaid going forward.
And I apologize to Dr. Roy right off because I am going to
ask you a few questions. When was study, the New England
Journal of Medicine study done that cites some of the issues in
the Oregon Medicaid program that you cite in your testimony?
Mr. Roy. The study was conducted in the late 2000s and
early 2010s, and I believe it was published in 2014.
Mr. Schrader. Yes, so it predated the ACA.
Mr. Roy. It wasn't about the ACA expansion, but it was
about----
Mr. Schrader. I understand, reclaiming my time. The
problems you cite with outcomes, no better no worse, but no
better than traditional Medicaid with the waiver program.
Second question, do you think it is cheaper based on your
information to give tax credits and subsidies for the federal
government, for the federal taxpayer to do that rather than
have eligible people be on Medicaid?
Mr. Roy. In Transcending Obamacare, our health reform
proposal, we propose taking the same dollars. So it is not
about a reduction in dollars relative to the Medicaid program,
but it is about taking the dollars that are spent, providing
acute care coverage to the Medicaid population and giving them
the option of having a tax credit that allows them to
purchase----
Mr. Schrader. Thank you, I appreciate that. And the answer
is it is unfortunately to put people in the Medicaid population
for the American taxpayer. I am trying to be a little fiscally
responsible as we look at the costs of all these people. I
prefer not to have to take care of people that are unable to
afford health care, but on the back end I don't want to pay for
them in the emergency room or for long-term, serious, life-
threatening issues at the end of their life.
Mr. Roy. If you buy an East German car it might be cheaper
than buying a Toyota or a Ford but that doesn't mean you get
more transportation out of it in the end.
Mr. Schrader. I totally agree.
Mr. Roy. So cheaper isn't necessarily better.
Mr. Schrader. I am a businessman. Spending money sometimes
saves you money up front, right? So if you spend your money you
can hopefully make it up on the back end. How many people do
you think that are under 138 percent of poverty level or
earning $16,000 a year are going to be able to afford to put
money into an HSA account that you recommend in your proposal?
Mr. Roy. If it is subsidized through these tax credits they
would be able to afford it.
Mr. Schrader. If it is subsidized. So in other words we
need to have money in the Medicaid expansion population or
whatever system we have to be able to make something go forward
in a reasonable way that Joe Sixpack could actually afford
things.
Mr. Roy. Absolutely.
Mr. Schrader. The issue I have here right now is that, you
know, the bottom line is the Medicaid expansion population has
been an unqualified success. We have red states, red state
governors, some of my Senate colleagues, some of my Republican
colleagues who cross the aisle, you know, really excited about
the opportunity to serve people. That is really the goal,
right? People, you don't want them not to have health care. You
don't want them not to show up to work. You don't want them to
be a burden to the taxpayer, and health care is kind of a
central way to make that thing happen.
I am very worried that the block grant math is
unfortunately a death spiral. That has been talked about. It is
a block grant. I don't care if it is a Medicaid expansion
population, I don't care if it is Medicaid itself. I don't care
if it is all these little bills that we are talking about that
are supposed to fix, not repeal Medicaid or Medicaid expansion,
you know, we need to make sure that these things are there at
the end of the day. The block grant math doesn't do that.
Population in America is going increase. By definition 20
percent of Americans are on Medicaid, 25 percent in my
district, 50 percent in the chairman's district are on
Medicaid. You put that on a block grant with increasing
population it is a death spiral not just for the individuals,
not just for the families, but for the taxpayers of this
country.
Rural districts in particular benefit by the Medicaid
expansion. In my district, in my state alone in rural parts of
my district and the chairman's district, the coordinated care
organizations are giving better care for less money. It doesn't
always have to be this Hobbesian choice where you cut provider
reimbursement. That is a medieval technology. That is a
medieval technology, colleagues.
What you want to do is incentivize with block grant global
payments like we have talked about with the SGR, you know, to
give these local districts, local control to the states to
create their own way to provide Medicaid services to these
people. In Oregon, contrary to that study that you cite in your
testimony, it has been an unqualified success. You know,
emergency room admissions are down 20, 30 percent; primary care
visits up 60 percent. Diabetes, one of the studies they are
doing and looked at, much better outcomes, almost 60 percent
better outcome than we see before. And I could on with COPD,
all these.
If you give people the right incentives to get good health
care, not burden them with financial burdens we can get this
thing done. So I would urge my colleagues to think thoughtfully
as we look at this Medicaid expansion issue going forward. And
I yield back. Thank you, Mr. Chairman.
Mr. Burgess. The chair thanks the gentleman; precisely why
we are having the hearing. The chair recognizes the gentleman
from Indiana, Dr. Bucshon, 5 minutes for questions, please.
Mr. Bucshon. Thank you very much, Mr. Chairman. Indiana
expanded under the Affordable Care Act under current Vice
President Pence, so obviously, you know, a state based program
like HIP 2.0 is a flexible program but required a difficult to
acquire waiver.
Mr. Roy, in House Republican health care proposal Better
Way would allow states to use Medicaid to provide a defined
contribution in the way of premium assistance or a limited
benefit to work-capable adults who are working or preparing to
work. States can do this now but require a waiver as in HIP
2.0. This would allow states to use this approach without a
waiver so they can enroll more low-income adults in private
coverage if they are working.
This is similar to the goals, as I mentioned, Healthy
Indiana Plan 2.0 and in fact it is being implemented and I
would like to explore this idea legislatively, so what are your
thoughts on this type of policy reform?
Mr. Roy. Thank you for the question. I think it is better
than nothing to have more flexibility for states to do the
kinds of things you are talking about. As I alluded to earlier
in response to a different question though, the Medicaid
statute severely limits the flexibility even if CMS grants
waivers to states to do certain types of things with their
Medicaid program.
So what is very important is to reform the statute so that
individuals have more control over their healthcare dollars,
they can buy the kind of insurance that really serves their
needs, deploy Health Savings Accounts sometimes for example to
use retainer based direct primary care so they can get much
bigger and much more frequent access to primary cares and
specialists when they need them. If you do that it will
dramatically improve health care outcomes relative to the
Medicaid program today.
Mr. Bucshon. Thank you. Mr. McCarthy, in your testimony you
said the fundamental role of CMS should be rethought and we
should focus less on command and control. There are nearly 400
staff at CMS and CHIP--well, Centers for Medicaid and CHIP
services at CMS. Do you know how many of them have worked in a
state program for a health provider or a managed care plan?
Mr. McCarthy. I do not know how many of them worked in----
Mr. Bucshon. Well, I will give you the data. Using LinkedIn
to look at publicly available information it was examined in
2016 that about 40 percent of the staff had a bachelor's degree
and nearly 15 percent had a law degree or Ph.D., but only 4
percent held a credential as a health care provider. The
majority of the staff, 57 percent of the staff had spent their
career in Federal or state government, but only 5 percent had
previously worked for a state Medicaid program or fewer than 20
percent had ever worked for a health plan or provider.
Of course none of this is to suggest that these aren't
great employees and are doing the best that they can, but it
does raise the question of whether or not there is an
unintentional institutional bias for individuals who are
writing the rules and regulations for state Medicaid programs
if you only have 5 percent of the people that have ever
actually worked for a state Medicaid program.
What could be done to devolve CMCS authorities or assure
there are more people at CMS that have more real-world
experience in this area?
Mr. McCarthy. One of the things that often comes up is the
fact that CMCS treats the National Association of Medicaid
Directors as just another stakeholder group. They are no
different than a hospital association or anyone else.
And so one of the things I have advocated for a long time
is the Medicaid directors should be brought in earlier to talk
about rules and regulations and what will work and not work.
They should not be treated as just another stakeholder because
they are part of the system that is putting up a bunch of the
money, so they need to be talked about. For instance, the
latest rules, the mega rule where you brought up that came up
around the IMDs, Institutions for Mental Disease, in that final
rule states cannot implement what was put in and that was
because CMCS didn't talk to states specifically around how
could this be implemented.
So I don't know how to change getting people who work at
CMCS to come from states because obviously they would have to
move across the country there or you would just be some of my
old staff from the district or Maryland would be the only two
places that people would move there for. But the rules and
regulations and how states are looked at have to be----
Mr. Bucshon. So I think what at the end of the day, which
we see this across federal agencies, federal agencies should
reach out to people who have subject matter expertise probably
in a better way than they have. Not necessarily have those
people with that expertise in the agency, but they should
probably reach out more to people like yourself and others.
Ms. Solomon, do you believe that all citizens of the United
States should be on Medicaid or on Medicare?
Ms. Solomon. All citizens, no. I mean the ones that----
Mr. Bucshon. Yes. That would be a single payer. Do you
believe in a single payer?
Ms. Solomon. I believe in universal coverage. I think what
we did in----
Mr. Bucshon. No, the answer is you do or you don't.
Ms. Solomon. No, I don't believe in single payer. I believe
in whatever gets us there.
Mr. Bucshon. Yes.
Ms. Solomon. And the ACA made a big start in that.
Mr. Bucshon. Yes. OK, thank you. I yield back.
Mr. Burgess. The chair thanks the gentleman. The gentleman
yields back. The chair recognizes the gentleman from New York,
Mr. Engel, 5 minutes for questions, please.
Mr. Engel. Thank you, Mr. Chairman. We have heard
Republicans describe their alternative picture of Medicaid
before. In fact we have had a hearing on most of these bills
before. I don't think anyone here would disagree with
meaningful efforts to shrink waiting lists and afford Americans
the services they need quickly, but that is not what these
bills do. These bills represent yet another Republican attempt
to gut Medicaid based on total falsehoods.
I think it would be helpful to talk about the real
Americans for whom Medicaid is lifesaving. First, let's clear
up any misconceptions about who Medicaid covers. Nearly a
quarter of New Yorkers were covered by Medicaid or CHIP in
2015. The vast majority of New York's Medicaid beneficiaries
come from working families. These Americans cannot afford
private health insurance even with a full-time job. For them,
Medicaid is a chance to stay healthy which means a chance to
work longer hours and provide for their families.
Now I would like to debunk another misconception. My
friends on the other side of the aisle allege that Medicaid
spending is out of control. In fact, Medicaid spending is lower
than the spending growth rate of Medicare and private
insurance, and again I will point to New York. Despite charges
that Medicaid is inflexible, our state has dramatically
revamped our program to improve program integrity, better care
for patients and save money. These efforts have avoided costs
to the Medicaid program in excess of $1.8 billion. New York
achieved this while expanding Medicaid and cutting our
uninsured rate in half.
There is one more issue I would like to address and that is
the one before us today. A Republican's ideas to strengthen
Medicaid entail delaying or denying coverage to Americans that
need it to redirect funds to other parts of the program,
specifically to those states that choose to operate waiting
lists for Medicaid home and community based services. They are
suggesting that if states have high coverage levels they are
also letting Americans suffer on waiting lists.
Let me ask you this, Ms. Solomon. I am wondering if you can
help us delve into that claim. You said in your testimony that
11 states and D.C. do not operate waiting lists. I believe my
state of New York is among them. Is that correct?
Ms. Solomon. That is right.
Mr. Engel. Thank you. As I said a minute ago, New York cut
its uninsured rate in half, thanks in part to its decision to
expand Medicaid. Now even with that major expansion of coverage
zero New Yorkers, nobody, was forced onto a waiting list. So
Ms. Solomon, let me ask you again. Would you say that New
York's example is representative of most states without waiting
lists?
Ms. Solomon. It is. As I said, only two of the states
without waiting lists have not expanded, so there isn't a
correlation there.
Mr. Engel. Thank you. And I have one final question for
you, Ms. Solomon. Is there any evidence that refusing or
holding up Americans' Medicaid coverage as these bills would
do, would reduce waiting lists for home and community based
services?
Ms. Solomon. I don't think they would because these are all
state choices. States have made a choice whether or not to
lower their waiting lists to provide more services to take up
options. It is all state choices. It is not necessarily because
another state has done something for other people.
Mr. Engel. Thank you very much. Let me say that if as this
hearing title suggests my Republican friends are serious about
strengthening Medicaid, and I quoted this is what this about,
``Strengthening Medicaid and Prioritizing the Most
Vulnerable,'' well, let me suggest there is a way to do that.
The Affordable Care Act strengthened Medicaid tremendously by
modernizing it and promoting program integrity. The ACA also
helped America's most vulnerable. Thanks just to the law's
Medicaid expansion, more than 12 million people gained
insurance coverage.
So in short, let me say this. If you want to strengthen
Medicaid, if you really want to strengthen Medicaid, strengthen
the Affordable Care Act. Thank you, Mr. Chairman. I yield back
the balance of my time.
Mr. Burgess. The chair thanks the gentleman. The gentleman
yields back. The chair recognizes the gentlelady from Indiana,
Mrs. Brooks, 5 minutes for questions, please.
Mrs. Brooks. Thank you, Mr. Chairman. I would actually like
to talk about something that we have done in Indiana that my
colleague from Indiana has talked about which I do believe will
strengthen Medicaid, and that is Healthy Indiana Plan 2.0,
which I might say the logo is health coverage equal peace of
mind.
So we in Indiana do believe that health coverage equals
peace of mind. And the Healthy Indiana Plan which was approved
by our General Assembly prior to the Affordable Care Act being
implemented had incredible difficulties with CMS getting
waivers during the time that it has been in existence, and our
new governor, Governor Holcomb, just resubmitted Healthy
Indiana Plan 2.0 with some modifications just yesterday. And I
have to just share some of the year one results, and this
comes, some of this information comes from analysis of 2015
member surveys.
There are over 370,000 members approved for coverage.
Seventy percent of the members choose to make contributions
into their POWER accounts, and we could go into more. Forty two
percent emergency room visits lower, 42 percent emergency room
visits are lower for individuals that have moved from
traditional Medicaid into Healthy Indiana Plan. Eighty percent
HIP plus members report satisfaction, so do providers. Three
and four providers, and we started out the hearing talking
about providers, believe HIP will improve health care in
Indiana. And there is a gateway to work in trying to
incentivize for the expansion population more and more people
to seek work opportunities and to get them training.
So I would like to just focus a little bit on what your
thoughts are about Healthy Indiana Plan 2.0, each of you, what
do you think are the best things, and maybe a challenge very
briefly in my 3 minutes, about what you know about Indiana's
innovative, the first consumer-directed health care program in
the country for the Medicaid population.
Dr. Roy.
Mr. Roy. So in my view the Healthy Indiana program and in
particularly the initial version that was passed under Governor
Mitch Daniels is the most innovative Medicaid program in the
country. And I think it is very encouraging that Seema Verma
who was one of the chief implementers of that plan has been
nominated by the President to be the CMS administrator.
I think one thing we should mention about the Healthy
Indiana Plan 2.0 is that under the Obama administration CMS
there was lot of pushback on some of the important features of
Healthy Indiana that made Healthy Indiana so attractive. So,
for example, in the POWER accounts that Healthy Indiana, the
program has, the Health Savings Account-like instruments in the
Healthy Indiana program, there were certain requirements. To be
eligible for the Medicaid expansion under HIP 1.0 you had to do
very small things, provide a small premium payment of like a
dollar in some cases.
Mrs. Brooks. A dollar a month.
Mr. Roy. Exactly, a dollar a month. Do some basic annual
checkup tests like checking your cholesterol, checking your
diabetes, your HbA1c, other basic checkups to make sure that
you were engaging in the primary care and wellness health
activities that would help people manage their care in a really
good way.
A lot of those requirements were watered down in Healthy
Indiana Plan 2.0 because the ACA Medicaid expansion is
mandatory and so there isn't the same carrot opportunity to
say, look, if you do these things we will give you the reward
of expanded access to coverage under HIP 2.0 the way it was for
HIP 1.0. So that is one of the very disappointing aspects of
how the Obama administration----
Mrs. Brooks. Thank you. And Dr. Roy, because I would like
to get Mr. McCarthy because my time is running out, I would
appreciate it if you would supplement your testimony with other
responses if you might.
Mr. McCarthy.
Mr. McCarthy. I agree with what Dr. Roy said. It is really
important to say that it was the pre-ACA versus post-ACA. And I
would also point out that in Ohio under our Healthy Ohio
program that we had with something similar we also hired Seema
Verma to help us write that waiver. And that was called Health
Savings Account, but we called it a BRIDGE account so that a
person could take the money that was in that account with them
when they moved off of Medicaid to help them pay for health
care services when they weren't on Medicaid any longer.
Mrs. Brooks. Can you please quickly explain your concept?
You mentioned in your written testimony about money following
the person approach. Could you briefly touch on what that
means?
Mr. McCarthy. Yes. So that is where people who are in home
and community, well, basically people who are in institutions
so they are institutionalized. And what you are doing is trying
to get the person out of the institution back into the
community and the issue is often that person doesn't have the
money to do some of the very basic things and that is where
Money Follows the Person works, like buy people pots and pans
and help on the first month's rent.
The idea there was to use those dollars that would be
available to then also pay for home and community based
services for a year or 2.
Mrs. Brooks. Thank you. I am sorry, my time is up. I yield
back.
Mr. Burgess. The chair thanks the gentlelady. The chair
recognizes the gentleman from Georgia, Mr. Carter, 5 minutes
for questions, please.
Mr. Carter. Thank you, Mr. Chairman, and thank all of you
for being here. This has been a very informative session today
and I appreciate all of your input.
Dr. Roy, I want to start with you. First of all, I want to
thank you. Today you have articulated the fact that Medicaid
spending is climbing and that unfortunately the health outcomes
in Medicaid are not what they should be and they are far worse
than many other programs. So it seems like we are at an
impasse. And my question is, all of us want to improve care and
we want to decrease costs and cut costs and decrease spending
but, and we are looking for ways that we can do that and
certainly the bills that have been presented here today that we
are discussing will do that and we are thankful for that.
But what are some other solutions very quickly that you
envision that perhaps could help us in this goal?
Mr. Roy. Absolutely. Thank you for the question. I think
the most important thing is to maximize the flexibility that
individuals have and also states and localities to take the
health care dollars and the financial systems that we are
offering so that individuals can buy the health coverage and
health care that they need.
The biggest problem with the Medicaid program and the
reason why it doesn't work is not because we don't spend enough
money or we spend too much money, it is because there is very
little flexibility in how those dollars can be spent. And so a
lot of the dollars have to be spent in massively inefficient
ways that prevent people from getting the care that they need.
Mr. Carter. Where does personal responsibility come in and
how do you legislate that? I mean it is difficult.
Mr. Roy. Well, I think when individuals are controlling
more of those health care dollars they are naturally going to
be much more responsible for their coverage and care, because
they know that if they manage those dollars wisely they are
going to have savings later on in a POWER account or something
like that that cannot only accrue to their future health care
needs but those of their children, their spouses, their
descendants, the caregiver, the people they have to take care
of.
So that is an important aspect of when you take the dollars
out of the bureaucracy and give it to patients to control
themselves; surely we can all agree that the more the patient
controls the dollar the better that patient is.
Mr. Carter. Absolutely. Thank you for that. And I am going
to stay with you, Dr. Roy, and I am going to ask you one more.
In your written testimony you discussed the 2010 Simpson-Bowles
report, and that of course took on the issue of creative
financing and noted that many states finance a portion of their
Medicaid spending by actually taxing the providers. We did this
in the state of Georgia. I was in the state legislature for 10
years and we actually, I was on the Appropriations Health
Subcommittee, I was on Health and Human Services, so I was
right in the thick of it.
And we actually drew down, we were drawing down more
federal dollars from Medicaid at a 1:2 ratio. In other words
for every dollar we would put in we were getting two. Well,
obviously we balanced our budget that way, and in fact the
state of Georgia this year is reauthorizing that in this
legislative session. How can we do this better? That just
doesn't make much sense to me.
Mr. Roy. Thank you again for this question. What we propose
in Transcending Obamacare, and it is an idea that we actually
borrowed from the Urban Institute and a scholar there named
John Holahan, a left of center think tank, is that the best way
perhaps to reform the Medicaid program broadly is to
restructure it so that instead of having both states and
Washington offload these costs onto each other and split the
responsibility in ways that don't work, have the states and
Washington divide the responsibilities up.
So for example what we propose is have the federal
government say we are going to take over the part of Medicaid
that is providing financial assistance to poor people who need
acute care health insurance, just like we do for tax credits
for the uninsured, et cetera, and then the long-term care,
trade that and give that fully to the states to manage. If you
do it that way, if you clean up the lines of responsibility--
states control one aspect, federal government supports the
other--you eliminate all these poor and bad incentives for
mismanagement.
Mr. Carter. OK. Mr. McCarthy, I have got about a minute and
there is something that is very important to me. In your
testimony you said that states are forced to cover all FDA-
approved drugs and in turn receive rebates. However, for new
high cost drugs the rebate is not high enough to offset the
large increases in expenditures. Would we not be better off
letting the states opt out of the rebate program and do it
themselves?
I will be quite honest with you we used to do it ourselves
in Georgia. We used to have our own rebate system before this
started with the federal government. Dr. Bucshon can certainly
attest to the fact that in the South we are in the Cardiac
Belt. We utilize more of a certain type of drugs than they do
in other parts of the country. Dr. Murphy mentioned the anti-
psychotics, and of course as a pharmacist I understand all
this. And how do you think that idea would go if we let the
states do their own rebate program?
Mr. McCarthy. As always if you let states have that option
and don't force them to do something I would be in support of
that because right now you can only negotiate on additional
rebates.
Mr. Carter. Good. OK, well, I am out of time, but thank all
of you again for this.
Mr. Burgess. The gentleman yields back. The chair thanks
the gentleman. The chair now recognizes the gentleman from
California, Dr. Ruiz, for 5 minutes for questions, please.
Mr. Ruiz. Thank you, Mr. Chairman. Thank you, panelists,
for being here. I am not on this subcommittee, but I am still
here because this issue is so very important to me personally,
my patients, and my constituents. I am an emergency physician
and there is just so much to say about this conversation.
First, all doctors, Republican or Democratic doctors prefer
health insured patients over uninsured patients. There is no
doctor on this committee or anywhere in our nation that prefer
their patients to be uninsured. Two, Medicaid patients have
higher morbidity because they are a higher risk group. They are
the sick, vulnerable, and poor. That means that actually
Medicaid is working because we are targeting those patients
that it is intended to target.
Three, block grant and per capita block grants will create
more uninsured patients and physician reimbursement rates will
worsen because states will choose to cut eligibility, reduce
insured patients, and cut reimbursement rates to physicians.
Tax credits will not cover the full cost of health care, in
fact it will have our vulnerable populations pay higher
premiums and deductibles and therefore patients will have to
pay more out-of-pocket.
Since the expansion of Medicaid under the Affordable Care
Act, emergency departments around the nation including mine
have seen a dramatic decrease in uninsured patients by 50
percent or more. That is good for the patient. That is good for
the emergency department and that is good for hospitals and
taxpayers. And the reason why emergency departments have seen
an increase in patients is because there is not enough
physicians to see the newly insured. The over 20 million newly
insured patients in our nation now have insurance.
So these patients who have been putting off taking care of
their chronic illness because they couldn't see a doctor
because they couldn't afford it are now insured and they can't
see physicians in their community because of the severe
physician shortage crisis so they go to the emergency
department.
OK. I have concerns that the Verify Eligibility Coverage
Act will hurt American citizens. This bill will prohibit
federal funds until citizenship is proven. So let me give you a
real-life case of a citizen that this bill will hurt. At the
Mass General Hospital where I was training in medical school I
took care of a patient that arrived in the emergency department
after a severe motorcycle accident and suffered severe multi-
organ trauma including completely degloving of his face.
He was in the trauma ICU for 2 months without any
identification of who that person was. He couldn't speak, he
was intubated, and there was no information about him and
nobody, no family was calling in to look for him. so we simply
didn't know who he was. What do we do with them? What do we do
with that citizen? Are we not allowed to pay for his care
because he couldn't prove his citizenship?
So in regards to the lump sums and lottery winning
legislation, Ms. Solomon, while I think it is safe to say that
an overwhelming amount of millionaires aren't trying to qualify
for Medicaid, I would like to clarify the impact of this
legislation. It should be noted that this bill has changed
since last Congress and reflects some additional nuances and
protections that are very important.
This legislation is a prime example of why it is so
critical that we slow down and take the time needed to truly
consider a policy proposal and its impact on lives of millions
of Americans. So is there any evidence that this bill actually
solves a rampant problem?
Ms. Solomon. Thank you, Dr. Ruiz. This bill has changed
considerably and I commend the drafters for filling in a lot of
the problems that were identified initially, and now I think
what it really will do is very modest and just create hassles
for states.
It is really interesting to look at what has happened in
Michigan which actually is recovering from lottery. In their
Medicaid waiver they were given permission and over the 21
months that this provision has been live they have recovered
$380, but they have a contractor that needs to track so it is
not clear it does much of anything.
Mr. Ruiz. Let me ask you another question regarding tax
credits. Can you explain why tax credits don't work in place of
Medicaid coverage?
Ms. Solomon. Especially these tax credits that are being
proposed that are flat and not based on income would clearly
not work. But the other thing that we need to remember is that
Medicaid is a very different program than private insurance
that is specifically designed and very flexible to cover the
multiple populations that are served. A tax credit isn't going
to have that same flexibility that Medicaid has to provide the
kinds of substance use treatment, behavioral health treatment,
programs for kids with special needs; it just isn't going to
work.
Mr. Ruiz. Thank you.
Mr. Burgess. The chair thanks the gentleman. The gentleman
yields back. The chair recognizes the gentleman from Maryland,
Mr. Sarbanes, 5 minutes for questions, please.
Mr. Sarbanes. Thank you, Mr. Chairman, I appreciate it. I
want to thank the panel for its testimony.
And Ms. Solomon, I wanted to ask you a question, but I also
wanted before that just to say that it is unfortunate that our
Republican colleagues seem to want to take parts of the
Medicaid program that really do represent innovation and
flexibility and then instead of identifying that as a real
opportunity to build on a strong foundation in the overall
program, they use it to distract from good parts of the program
or actually go pull money away from that foundation.
So you talk about the home- and community-based waiver
program which is a terrific innovation, I think. When I was
still in the health care arena representing a lot of health
care clients in Maryland, we were looking at a waiver program
that would allow some Medicaid funding to flow to assisted
living facilities where there is a lower need for care and less
costly, but didn't usually qualify for Medicaid reimbursement.
So we wanted to explore that as an alternative to nursing
home care which is very high cost, the home- and community-
based care waiver is an extension of that thinking and so we
ought to pursue it in a meaningful way, but we shouldn't just
then use it as a shiny object to be able to then argue that we
should go take money from other important parts of the program.
In the same way the idea of flexibility is an important
one. I think you do want to give state Medicaid programs
flexibility to innovate and try other things, but then using
the flexibility argument that our colleagues on the other side
say, OK, that is why we should block-grant things because that
is the ultimate flexibility, so again they go take a concept
that could be a constructive one and they use it to advance
something which has the effect of undermining the core strength
of the Medicaid program. And I think it is unfortunate. It is a
missed opportunity for us to talk about how we can continue to
strengthen and improve a program that works pretty well
already.
So I would like you to maybe speak to that idea of how you
keep the foundation of the program strong even as you are
looking at potential for innovation and flexibility. And in
fact that if you did maintain the strength of the program and
gauge states' flexibility, they would actually go identify
sources of savings and you would probably achieve more savings
than as what is being proposed by these three bills to take
away from the existing beneficiaries.
So if you could speak to that because I think it is
important if we want to get a more efficient program that
provides solid care and maintains a strong foundation that is
the way flexibility and innovation ought to be pursued.
Ms. Solomon. I totally agree with that. And we have been
actually cataloguing on our Web site examples of states doing
exactly that and they have been given tremendous flexibility to
innovate, including being able to use upfront dollars which
often are necessary to build the communication system across
providers, to increase provider capacity and then achieve the
savings in the long run.
When I worked in Medicaid at the state level that was
always the barrier, because as an advocate we would argue but
you would be able to save money if you make this investment.
And the money wasn't there. And if you look at the innovation
through the SIM grants that Mr. McCarthy spoke of and other
initiatives that have taken place that is exactly what has been
going on.
And I really take issue with Dr. Roy's statement that
Medicaid doesn't work. Medicaid works really well. And I think
that is really the thing that we are trying to lift up through
highlighting these innovative programs, targeting the high
utilizers that are responsible for a great portion of the costs
by providing better coordination with some of the alternative
models that have been put forth in the Affordable Care Act and
elsewhere. So I think we could go on for all day on how
Medicaid works.
Mr. Sarbanes. Thank you for your testimony. I yield back.
Mr. Burgess. The chair thanks the gentleman. The gentleman
yields back. The chair recognizes the gentleman from
California, Mr. Cardenas, 5 minutes for questions, please.
Mr. Cardenas. Thank you very much, Mr. Chairman. Don't let
these people distract you from the big picture, ladies and
gentlemen. They keep talking about less than six----
Mr. Bucshon. Would the gentleman yield?
Mr. Cardenas. Yes.
Mr. Bucshon. We are not these people, we are elected
members of Congress that represent over 700,000 citizens.
Mr. Cardenas. Would you please give me back my time, Mr.
Chairman? Thank you very much. Don't let these elected Congress
members distract you from the big picture. They keep talking
about less than 6,000 people. The big picture is the more than
74 million Americans today that have a life of dignity because
they are using Medicaid and Medicare, 74 million, ladies and
gentlemen, right now in the United States of America. Six
thousand, let's deal with that.
Let me be very clear here, ladies and gentlemen, for the
majority of Americans, middle class Americans, Medicaid is what
gets you or your mother or your father into a nursing home. It
is what allows you to have a nurse help you in your home with
things you otherwise need to live a basic life of dignity. It
is not Medicare, ladies and gentlemen. It is Medicaid that
provides that. Medicare doesn't even get you through the door.
Seniors, families with seniors who need help cooking,
walking or even changing their clothes, I want you to be very
clear about this. We are talking about you, ladies and
gentlemen, we are talking about your loved ones. This is
important here. Your long-term care doesn't come through
Medicare. It comes through Medicaid. Many people don't
understand the program. They want to demonize it to basically
rip it out of your hands.
But Republican and Democratic governors are begging
Republicans here in Washington, please don't do this Congress
members, because if Republicans in Congress do, these governors
know that their state, the people in their state are going to
suffer. Governors are going to have to decide what to cut from
your life. Ladies and gentlemen, they are going to turn their
backs on Grandma and Grandpa and we are going to have sick
people in the streets more than there are today and we will be
right back where we were, and that is not the good old days,
folks.
Today people on Medicaid walk into the doctor's office. If
Republicans make these changes, people will be flooding
emergency rooms. That will increase health care costs for
everyone. Doctors and nurses and hospitals won't be able to
handle the workload.
Now according to the study in the New England Journal of
Medicine, one of the oldest and most prestigious medical
journals, if Republicans take away everyone's coverage over
43,000 people could die each year based on these actions. In
California that means over 7,600 people could die in 1 year. In
Texas that is over 2,400 people a year. I am sure my colleague
chairman of the Health Subcommittee understands the value in
saving lives and doing no harm. In Illinois that is over 1,400
people a year. I am sure my colleagues from Illinois think that
is unacceptable. In Oregon that is over 1,200 people a year. I
am sure the chairman of the committee doesn't want to see
Medicaid dollars get slashed in his state.
We cannot accept this. We cannot allow Republicans to do
this to seniors, to children and to the people with
disabilities. These are hardworking Americans. Republicans in
Congress want to take that care away, but they won't own up to
it. Republicans say to you that they don't want to pay for
Medicaid. What they don't want you to figure out is that they
want to pocket your tax dollars. They are going to cut Medicaid
while lowering taxes for the wealthiest people. They are going
to lower taxes for Trump's billionaire friends, and in the
committee down the hall, but raise taxes on everyone else. It
is not fair. It is just another trade-off, and Republicans are
sabotaging the American health care system.
Ms. Solomon, people in L.A. County where I am from have
truly benefited from the Affordable Care Act. I have seen it
with my own eyes. Can you talk a little bit about what
repealing the law and what kicking people off of Medicaid would
mean for people in Los Angeles?
Ms. Solomon. I think you probably have as many people as
many states do in your county. I have had the opportunity to
meet the people from the community health centers across L.A.
County. I think large numbers would just lose coverage as they
would in every state, hospital uncompensated care would grow,
same for other providers, and as you noted there would be real
harm.
Mr. Cardenas. Thank you very much, my congressional
colleagues. I yield back.
Mr. Burgess. The gentleman's time has expired. The
gentleman yields back. Seeing that there are no further members
wishing to ask questions, I do want to thank our witnesses for
being here today.
The chairman would remind the committee that we all agree
it is important that we secure the care and keep our commitment
to vulnerable Americans. The very fact that we are holding this
hearing today as the first Subcommittee of Health hearing, I
think, is evidence of that fact and I hope we can continue to
take these steps and have the discussion in a rational manner.
Pursuant to committee rules, I remind members they have 10
business days to submit additional questions for the record. I
ask the witnesses to submit their response within 10 business
days on the receipt of these questions, and without objection,
the subcommittee is adjourned.
Mr. Green. Can you yield just for a second?
Mr. Burgess. One second.
Mr. Green. OK.
Mr. Burgess. Time is up.
Mr. Green. Mr. Chairman, I think on our side we want to
work with you and I will leave this, I think a start of a good
hearing. So we will go from here and to see what we can do.
Mr. Burgess. Well, again, Mr. Chairman, the very fact that
this was the first hearing of the subcommittee, I mean I know
there are members on my side who actually resent the tone that
this committee ended up on today. I regret that fact. I hope
that we can keep this on a civil and unemotional level going
forward. This is important work that we do and it is literally
the future of our country.
Again I want to thank our witnesses for being here today,
and without objection, the subcommittee is adjourned.
[Whereupon, at 12:43 p.m., the Subcommittee was adjourned.]
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