Health Policy Updates
This is a complicated year for advocates. The fiscal crises in the state and federal governments are compounded by the political line-up of powerful forces for cost containment and “reform” in the Medicaid program. The opening salvos have been cast with the release of President Bush’s and Governor Pataki’s budget proposals. Both have proposed deep cuts and suggested structural changes to the program. This year, more than ever, your help will be needed. Be on the lookout for announcements of how you can be involved with Care for the Homeless’ Policy and Advocacy efforts.

NEW YORK STATE UPDATE

JANUARY 2007
On Friday, 26 January, Gov. Spitzer laid out his agenda for reform of New York State’s health care system Governor Spitzer's Health Speech. In a clear and encouraging message focusing on expanding insurance coverage, Medicaid reform, and improving public health he envisioned a “Patient First” system with patients at the center, in contrast to the all too familiar “Institution First” approach. Patient advocates, who were invited to be part of the small audience, were encouraged by concepts they have long fought for:

	expanding eligibility for Child Health Plus to 400% of the poverty level;
	eliminating documentation requirements for continued;
	planning for affordable, universal health coverage in New York;
	increasing transparency and accountability of health insurers;
	allocating funds to where the bulk of Medicaid patients get their care;
	establishing innovative drug purchasing policies; and
	investing in health information technology.

In a subsequent meeting Deputy Commissioner for Health Insurance Program Deborah Bachrach, outlined the restructuring of the Department of Health (SDOH). Her recent publication for the United Hospital Fund on the Administration of Medicaid in New York State, clearly evidences why the SDOH requires simplification. The newly restructured SDOH will have four main areas:

	The Office of Health Insurance Programs, focusing on public coverage, managed care, and ensuring reimbursement supports effective models of care;
	Office of Health Systems Management will focus on the delivery system, including Certificate of Need applications, licensure, and surveillance;
	The Office of Long Term Care; and
	Public Health.

There is a refreshing and encouraging whiff of change in the air. Everyone at Care for the Homeless is looking forward to joining with Governor Spitzer and the State Legislature to design and implement policies that will deliver care that best meets the needs of homeless people and reduces the number of people who are uninsured.

FEDERAL UPDATE

MARCH 2005
The Smith-Bingaman amendment
The good news happened in the US Senate. After passing a budget that included a $15 billion cut to Medicaid for FY2006, the Senate narrowly passed by 52 to 48 the Smith-Bingaman amendment. The amendment struck the cut, and created a bipartisan commission to study Medicaid, and to ultimately recommend reforms independent of the budget process. Further attempts to cut the Medicaid budget are expected as negotiations proceed.

Health and Human Services
Secretary Michael Leavitt testified to the Senate that governors of 38 states have agreed on five areas of Medicaid reform that can be addressed immediately, including:

	reducing prescription drug costs;
	implement more home and community-based options for long-term care;
	close loopholes that hide the assets of seniors seeking long-term care assistance;
	adopt less comprehensive coverage models; and
	impose higher co-pays.

NEW YORK STATE UPDATE

MARCH 2005
Medicaid waiver
Secretary Leavitt announced to everyone’s surprise that the federal government has given Governor Pataki conditional approval of a new waiver to “modernize” Medicaid. The program is called the Federal-State Health Reform Partnership [F-SHRP]. It’s being touted as permitting NYS to retain $1.5 billion that it has amassed in savings realized from Medicaid managed care. Where those funds will be targeted hasn’t been made public. There are several other questions about the waiver, including whether it requires state legislative approval, if it is contingent on enacting the Governor’s budget, and how the waiver will comply with the federal requirement that it be budget neutral.

Managed care enrollment
State legislators have been negotiating to restore many of the Medicaid cuts proposed by the Governor. But there is one proposal which is troubling for advocates of people with special or complex health care needs. The proposal would enroll, or study the effects of enrolling people currently exempted into Medicaid managed care. Homeless people are not specifically named, but are among the populations currently exempt. But a new waiver puts everything originally negotiated in designing New York’s Medicaid managed care program back on the table.

February Events

FEDERAL UPDATE

FEBRUARY 2005
The President’s Budget
President Bush has proposed a $60 billion reduction in Medicaid spending over ten years. The amount of the budget cut is very problematic. Medicaid reform is high on President Bush’s agenda, and one way to force that is through the budget negotiation process. If the Congressional committees responsible for the budget resolution (the Congressional budget) are unable to meet the amount of cuts targeted by the President, they may consider enacting a cap on federal spending as a way to achieve savings. The cap would transform the open ended entitlement of Medicaid into a capped allotment or block grant program. There has already been a call for a budget reconciliation (instructions by the congressional committee for Congress to consider legislation) which could amend the current Medicaid statute. Reconciliations cannot be filibustered and require a majority of votes in the Senate rather than the 60 votes usually needed to pass legislation.

The executive budget calls for

	modest increases in coverage for low-income children;
	demonstrations to help disabled people remain in their community; and
	extension of funding for some forms of medical assistance, such as transitional Medicaid.

The savings would be realized through

	changes that eliminate or make it more difficult for states to draw down additional federal Medicaid funds;
	capping the federal share of administrative costs that states incur;
	reduce the federal share of costs for targeted case management services;
	the elimination of “questionable asset transfers” by individuals seeking Medicaid coverage for long term care; and
	changes to reimbursement policies for pharmacists.

Federal Politics
The National Governors Association is a key player in Medicaid debates. The National Governors Association would like “flexibility” to enact changes to the structure of Medicaid. Budget crises in the states have already led to reductions in eligibility and services. As a group, they have opposed block grants or fixed allotments which would shift increased cost to the states if, for example, there were:

	public health emergencies;
	downturns in the economy (which usually lead to many low-income workers losing their health coverage); and
	costly innovations in health care technology.

NEW YORK STATE UPDATE

FEBRUARY 2005
Medicaid
The Governor’s budget increases charges to nursing homes and hospitals that will weaken the health care infrastructure and affect all New Yorkers. The budget also includes cost containment strategies that amount to $3 billion in cuts to Medicaid, affecting those who are least able to afford them:

	eliminating services in the Family Health Plus [FHP] program;
	imposing higher co-pays in FHP and Medicaid;
	imposing fees for the Early Intervention program; and
	eliminating Facilitated Enrollment (which enrolls 50% of all new applicants).

Other changes in the Medicaid program will result in “savings” by making it more difficult for people to enroll in all of the public health coverage programs (Medicaid, Family Health Plus, and Child Health Plus A & B), including Medicaid long term care; and will make it more difficult for people with complex medical needs to get the drugs they need by establishing a preferred drug program.

The Health Care Reform Act
HCRA will be reauthorized this year. HCRA is the source of almost $5 billion in funding for many state health programs, including Child Health Plus, Family Health Plus, and the Bad Debt and Charity care pools which distribute additional funds to hospitals and health centers. HCRA has until now been “off-budget” which reduced accountability for how the funds were spent. The Governor has proposed including HCRA funds in the state budget. While this may add to the transparency of this funding source, it would give the Governor much greater control over the funds.

New York State Politics
Governor Pataki has also proposed a way to limit the “county share,” the approximately 25 percent of Medicaid costs the counties contribute to the cost of Medicaid. Increases in enrollment and in the cost of Medicaid are necessitating counties to raise their property taxes. County executives are leading a strong, publicly popular campaign for a state take-over for the county share, which has become a driving force behind state Medicaid reform.

Also, the New York State Court of Appeals reached a decision that gives Governor Pataki greater authority over the budget, adding an additional layer of uncertainty to the outcome of this year’s state Medicaid budget. The decision gives the Governor more authority to include legislative type language in the budget, and makes it almost impossible for the legislature to amend the language. This will affect the dynamics of budget negotiations, and potentially realign political forces in New York.

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