Monthly Archives: March 2013

Unsavory Observation in PA Budget Hearings – Let’s Fix This….and More

I must be one of those Wacko Birds.  Sometimes in the middle of the day I watch Pennsylvania’s version of C-SPAN, PCN-TV, carrying the riveting excitement of live committee hearings in our state legislature, but then I watched bowling on B&W TV as a kid.  While watching recent House Appropriations Committee budget hearings I made a rather unsavory observation.  Names have no purpose or importance here, because unsavory emanated from both parties and seemed to be part of the process, just business as usual.

What bothered me were pleas to the committee to reinstate appropriations to non-profit organizations in the private sector and/or increase their funding more than it had been.  This is my money.  While I don’t entirely think it is wrong for government to assist non-profits, especially if it can be demonstrated that the actions of the non-profit save the taxpayer money or have a valued function that is better administered in the private sector, direct assistance through taxation takes not only my money but my choice.  Picking and choosing with other people’s money creates wars for contributions that should exist but not inside the halls of government.

It would be much better and much cleaner if all government assistance to non- profits was based on the School Choice EITC model, an indirect approach to assistance.   This model returns voluntary choice to individuals or corporations or tax paying groups as it should be, by allocating pools of potential assistance that would only be paid as tax credits in return for voluntary contributions competed for in the private sector.  Cleaner still would be if tax credits were less than full reimbursement, say 75% to 85% of the donation amount, leaving a portion squarely on the shoulders of the contributor, as any reimbursement still is other people’s money and this would prove true intent rather than a scheme to merely pass through public funds.  Any non-reimbursed amounts would still be eligible as a deduction on federal returns.

Large highly valued needs, such as education scholarships to attend charter or private schools could stand alone with their own appropriated fund.  Smaller more numerous non-profits could compete from a common pool appropriated for the potential benefit of any.  Strict value and need standards would have to be met to be allowed into the pool of potentials.  Proof of economic benefit to the taxpayer or extreme social need should top the list.  Perhaps legislators should vote individually for non-profit inclusion on common lists among those that pass independent screening.

Of course any such funds, single purpose or multi-purpose, must have caps to protect the taxpayer and otherwise budgeted revenue.  From there it would be first come first served to obtain the available credits.  This restores valuable elements of true charity while eliminating the unsavory sight of legislators publicly begging on behalf of any specific non-profit organization for the money of others perhaps against their will.  It also effectively isolates and quarantines useful efforts, voluntarily embarked upon by people of vision, from the entanglement of government, with its regulations and rules and departments and bureaus and employees and unions and pensions and all ancillary issues it invariably brings with it.

EITC for education has been a great success for helping deserving students avoid failing schools.  Sometimes incentives for desired voluntary efforts could take forms other than tax credits.  Such would be the case with an act like NJ Senate No 2231, that would replace government entanglement in Medicaid by granting immunity from civil malpractice liability in all their practice to physicians and dentists who agree to donate at least 4 hours per week in a non-government free clinic, a wonderful concept that could so attract participation that there would be a shortage of available free clinics.  Since this approach has been predicted to hold potential for both huge savings to the taxpayer and better access to higher quality health care for the poor, the EITC model could then be employed, with a dedicated fund of tax credits limited in size only by attracting enough voluntary contributions for a sufficient number of free clinics, themselves independent of any government ties.  Because of substantial predicted net savings to the state by bypassing Medicaid, extending whatever voluntary credits as necessary to assure every willing physician the needed resources would be entirely warranted.

It’s not hard to see how, in many respects, this approach to getting desired things done is revolutionary and refreshing.  I can’t imagine it would be that hard to address my unsavory observation and not only fix it but head down a new path that would better respect freedom while benefiting us all.

The Insidious Non-Optional Medicaid Expansion That Further Clouds the Future for States

So much about Obamacare has been “by any means necessary”, from the legislative gymnastics to get the bill through Congress to the current mandatory expansion of Medicaid that is here now even though largely unnoticed.  Here now?  But wasn’t Medicaid expansion optional?  Some yes and some no as it turns out.  This almost unknown stealth expansion was required of the states and imposed on them despite the Supreme Court ruling because it is being funded 100% by the Federal Government, but only for two years 2013 and 2014, after which, funding abruptly ends.  Because a strong constituency is being created (or bought) that will demand this expansion be continued past 2014, and no one can predict the outcome of those likely demands, further possible complications and risks arise for those states that decide to embrace the optional Medicaid expansion.  Allow me to explain.

Because of current constraints to participation by medical professionals both by low reimbursement rates, 1800+ pages of cumbersome rules, and audits that go beyond financial fraud to interfere in actual treatment decisions, there are at present not enough willing doctors to adequately serve those now eligible for Medicaid benefits.  Realizing this, and attempting to avoid making the optional expansion to 133% of poverty and influx of new eligibles a disaster, “any means necessary” was once again deployed.

On November 6, 2012 (surprisingly not a Friday) CMS published a Final Rule to go forward.  146 primary care Medicaid services identified by the ACA would, by regulatory proclamation, be compensated at the higher Medicare rate, starting with 2013 but only for two years.  Since Medicaid reimbursement rates relative to Medicare reimbursements vary tremendously from state to state, the percentage increase covered by Federal funding varies accordingly.  At one extreme are two states that surprisingly pay higher Medicaid fees for the covered services than they do for Medicare.  These states will receive no additional Federal funding.  At the other extreme is Rhode Island, where Medicaid fees will increase 198%.  Five other states will receive boosts of over 100%.  Pennsylvania is number seven on the list and doctors will be compensated an additional 96% to equal the higher Medicare rates.  On average across the nation Medicaid fees for the ACA primary care services will rise 73% at an estimated cost of $11.9 billion, all in an attempt to keep willing physicians on board, expand their willingness, and attract newcomers.

The problem, of course is what happens after 2014.  It is unimaginable that doctors enjoying the higher reimbursements for two years will do anything but lobby stridently to extend the increases and indeed have them made permanent.  Realizing, otherwise, the carrot to participation would no longer exist, this outcome can be considered probable.  The mystery is who would then pay?  Would the increase be included in the ultimate 10% state funding under optional expansion to 133% of poverty or even some formula that would require states to pay more? Would the increases fall to each individual state or be averaged over all the states?  The point is that today no one knows.  While perhaps not being the main reason to avoid the optional Medicaid expansion, especially those states with the greatest percentage “temporary” increases need to consider the possibility of very serious consequences in the aftermath of this two year attempt by the Federal government to buy a loyal constituency for implementation and avoidance of massive failure.  It is also interesting that the current reimbursement increases were only applied for two years, as estimates for the cost of Obamacare have been made over a ten year period, allowing more, for now, to remain hidden from view.

The two main sources used for this post were a policy brief from the Henry J. Kaiser Family Foundation and an article in American Medical News published by the American Medical Association.  More details can be found at these two locations.  Also used was a recent article written by the President of the Texas Medical Association.

Note: This post was shared to WatchdogWire-Pennsylvania on Sep 24, 2013.