Cost and Financing

California voters rejected by a nearly 60 percent majority Proposition 45 that would have required the state insurance commissioner to approve proposed increases in health insurance rates for small groups and individuals.

WASHINGTON, D.C.—State Medicaid programs increasingly are depending on managed care arrangements, Julia Paradise, associate director of the Kaiser Commission on Medicaid and the Uninsured, told state legislators attending the CSG Medicaid Leadership Policy Academy in Washington, D.C., Sept. 15-17. “States see managed care as a strategy to extract savings,” she said.

The federal government has approved a Medicare waiver for Maryland intended to reduce hospital spending, Stateline reports today. Maryland is already the only state to set uniform prices for all hospitals. The same medical procedure costs the same in every hospital in the state regardless of the insurer, including Medicare and Medicaid. This has been true since 1974.

The Medicare waiver is how Maryland can set Medicare hospital rates – otherwise it would be subject to federal rules on rates. If the waiver succeeds in holding down costs, Maryland will continue to set its own Medicare hospital rates, currently higher than those in other states.

The health care costs of treating chronic disease rise exponentially as the numbers of diagnosed chronic conditions increase according to data just released by the U.S. Department of Health and Human Services. This is the bad news. The 2011 per capita cost for a Medicare beneficiary with six or more chronic conditions (from a list of 15 that varied from stroke and asthma to Alzheimer's and diabetes) was $31,543. 

The good news is that the annual costs have not changed much over the five year period, 2007-2011. At the low end of expenses and chronic conditions, per capita costs increased 9.8 percent over the five year period. At the high end, for those with six or more diagnosed chronic conditions, the cost increase was 10.3 percent. 

On June 20-22, 45 CSG members gathered in Washington, D.C. for the second annual Medicaid Policy Academy to learn more about Medicaid and how states can improve health outcomes for enrollees and, at the same time, run a more cost efficient program. Attendees had been nominated for attendance by health committee chairs in their home states as "rising stars" who were either new to positions of leadership on Medicaid policy or were likely to soon assume these positions.

Workplace wellness programs are gaining popularity in the United States, however a new study by RAND Corporation shows that the 6 billion dollar wellness program industry does not produce the intended healthier outcomes.

Stateline Midwest ~ November 2012

Six Midwestern states have submitted plans to the federal government that aim to control the costs of caring for a relatively small — but expensive — population in the Medicaid program.

The goal is to better integrate care for so-called “dual eligibles”: the more than 9 million seniors and people with disabilities who receive benefits under both the federal Medicare and state-federal Medicaid programs.

Reform, whether mandated by the Affordable Care Act or not, is needed to address citizens' demands for quality health care services. Medicaid, state employee health care and now, health insurance exchanges are potential policy levers to increase quality, improve states' health outcomes and hold the line on costs. This session highlighted replicable initiatives undertaken by states to build an improved health care system responsive to today's fiscal policy context.

Colorado, by 2013, will have on-line a searchable database to allow consumers to compare health costs across hospitals and doctors. Thirteen other states have or are implementing All Payer Claims Databases, according to the All-Payer Claims Database Council.

The move by Colorado began with passage of a bill in 2010 establishing an advisory council to make recommendations on setting up the database.

Change will be painful and scary, but the health care system cannot continue to function the way it is. Reform is necessary to improve both people’s health and every state’s bottom line.  That was the message delivered by Ellen Andrews, coordinator of the Health Policy Steering Committee for The Council of State Governments East and executive director of the Connecticut Health Policy Project. She was the featured speaker for CSG’s March 28 webinar, "Value over Volume: Paying for Quality."