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State Uses Multiple Strategies to Reduce Services
by Andrea Abrahamson
June 20, 2002
Washington State’s budget woes could significantly limit health care for persons with disabilities. While many are under the impression that the threat of health care cuts ended with the last legislative session, proposed program changes continue on into the summer months and could potentially change the way the State provides public assistance forever. Premiums, co-pays, benefit changes, enrollment freezes for programs, and limited public input could transform what individuals today call Medicaid.
The reason for the cuts is a State budget crunch from not only an economic recession, but also from rising health care costs and rapidly escalating pharmaceutical drug expenses. An overview of the budget of Washington’s Department of Social and Health Services (DSHS) shows the majority of its spending comes from the Medical Assistance Administration (MAA). Within the MAA budget, the majority of costs come from seniors, those with chronic health care needs, and persons with disabilities.
DSHS claims that its budget is no longer sustainable, and is scrambling to find funding flexibility, while restructuring programs to fit a set number of dollars. That spells trouble for persons with disabilities trying to maintain health coverage. Below you will find descriptions of four major changes the State is proposing to contain costs - all of which will curtail services for populations who need them the most. The four changes are:
- State Proposes Medicaid "Waiver"
- Changes to Home and Community Based Services
- Division of Developmental Disabilities (DDD) Eligibility Changes
- Elimination of State SSI Supplement
1. State Proposes Medicaid Waiver
The Proposed Health Insurance Flexibility and Accountability (HIFA) Waiver could forever change Medicaid
[Editors note: Earlier this spring, this proposal was called an "1115 waiver," and now it is being called a HIFA waiver. The name change has not affected the substance of the proposal. See a previous article about the waiver in Envoy On-Line .]
A waiver is a proposal made to the federal government which would allow certain Medicaid laws to be ‘waived'. In this case, the proposed waiver allows the state to limit its scope of coverage to what are called “optional” populations while expanding medical coverage under the State Children’s Health Insurance Program (SCHIP). Washington State has written such a waiver proposal that would allow expanded coverage to parents of children receiving SCHIP, in exchange for allowing indefinite enrollment caps, premiums, co-pays and reductions in benefits for individuals who receive Medicaid and are in ‘optional’ categories. Washington submitted its original proposal in November of 2001, and CMS responded, saying the state needed to be more specific about the proposed changes and the public process. Washington State intends to resubmit a HIFA waiver proposal to CMS in July 2002, although no revised draft has been available for public comment.
What are optional categories and services?
In relation to persons with disabilities, optional coverage cuts could affect the following groups:
· Persons with high medical expenses who go through spenddown in order to qualify for Medicaid, also known as “Medically needy”.
· Persons receiving home and community based services, mostly persons who are elderly or persons who have disabilities
· Women with breast or cervical cancer
· Children with disabilities who live in the community
Optional services are also those primarily utilized by persons with disabilities and include:
 | inpatient hospital and nursing facility services for individuals aged 65 or over in an institution for mental disease |
| private duty nursing services, hospice care, and community-supported living arrangement services |
| other diagnostic, screening, preventive and rehabilitative services |
| primary care case management and case management services |
| physical therapy and related services |
| prescription drugs |
| personal care services |
| private duty nursing |
| dental services |
| dentures, prosthetic devices, and eyeglasses (prescribed by a physician skilled in the diseases of the eye or by an optometrist) |
| intermediate care facility services for persons with cognitive disabilities |
What will this waiver do to optional groups and services?
Enrollment freezes
In the past Medicaid has been an entitlement program. Each year DSHS would submit their Medicaid expenses to the State, and the State would have to cover. By placing enrollment caps on programs, DSHS and the State could have more flexibility and limit the amount of money spent on optional populations and optional medical programs. Potential problems for groups who needs these programs include:
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Services would be available on a first-come, first-serve basis, and persons who sign up late may not be able to get the health coverage they need. |
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Persons who desperately need health care may have no options for coverage and be forced to go to hospitals, community health clinics, or to go without health care. It is not clear from DSHS’ original waiver proposal how long the waiting lists could be. |
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Persons who are in the waiting period for Medicare eligibility may lose the opportunity for life-saving treatment, as in the case of persons with cervical or breast cancer, or HIV and AIDS. |
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Persons who do miss premium payments and lose coverage may not be able to regain coverage if they reapply and there is an enrollment freeze. |
Benefit "Redesign"
DSHS says that optional groups would have benefits ‘redrafted,’ making them less comprehensive. It has been unclear what changes the State has in mind for benefit redesign, but there are many potential problems for persons with disabilities.
For instance, decisions about benefit changes have traditionally been made with public input, and could now be made behind closed doors as a budget decision.
DSHS says it intends to cover “major medical” expenses, but also lists services like oxygen, private duty nursing, and parenteral and enteral nutrition as optional. Without a draft for which to provide comment, and with benefit restructuring left in the hands of DSHS, persons with disabilities could have services cut, altered or indefinitely put on hold, realizing this only after decisions have already been made.
Premiums
DSHS intends to charge those in optional groups who are above 100% of the Federal Poverty Level with premiums. While the State says that it would not charge a family more than 5% of its income; for many, this is still too much. DSHS also says that if a person does not pay his/her premium, it is likely that he/she will lose coverage.
CPCo-payments
Co-pays would come in non-emergent emergency room visits and for brand name drugs when generic substitutes are not used. Questions around necessary brand name use for persons with mental disabilities arise. This also begs the question as to who determines what is an emergent hospital visit, and how that decision is reached.
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2. Changes to Home and Community Based Services
Washington’s Community and Alternatives Placement (CAP) Waiver to become a program of the past - will give way to narrower ‘Home & Community Options Waiver System’
The Community Alternatives Placement (CAP) Waiver was adopted in Washington State in 1983, as a home and community based service waiver. The design of Home and Community Based Service waivers follows the direction of the Supreme Court’s Olmstead Act, which stated States must ensure persons with disabilities the supports and services they need to live in the community.
Yet it seems the CAP Waiver has been riddled with troubles, and after two unfavorable audits, skyrocketing caseloads, increased cases of abuse and neglect of CAP waiver recipients, and rising litigation, the State is reformatting its more comprehensive waiver into a series of more focused waivers that may narrow the scope of eligibility and the array of services offered.
While there is still much that is not clear about what will be provided under the new offers, the Division of Developmental Disabilities, which administers the CAP waiver, is proposing perhaps five home and community-based waivers in lieu of the one, with “internal cost and program controls.” It is questionable as to whether families who are over income and have children with disabilities will continue to receive medical coupons. It has also been discussed that Family Support Payments would be offered to families instead of more comprehensive waiver services. At this point, however, nothing is clear, and the questions loom larger than available information. Stay tuned to WPAS updates for further developments. The best way to stay informed is to sign up for WPAS Email Updates or contact Phil Jordan at WPAS (contact info at the bottom of this page).
The CAP Waiver, which expires at the end of June, will not be renewed, and the Division of Developmental Disabilities can ask for an extension of up to 90 days before submitting its next proposal. There will be opportunity for public comment through this process.
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3. Division of Developmental Disabilities (DDD) Eligibility Changes
Caseloads and increased developmental disability numbers prompt change in eligibility rules for services
The Division of Developmental Disabilities (DDD) is scrutinizing its eligibility laws to protect caseload growth and ensure its program is sustainable. DDD is currently rewriting the eligibility rules for Division of Developmental Disability services for the following categories: mental retardation, cerebral palsy, autism, epilepsy, birth-to-six programs, neurological or other conditions.
WPAS has been attending meetings that DDD has been holding with stakeholders. When new rules are proposed, WPAS will analyze them and suggest any changes that appear to be needed. Stay in touch by reading Envoy On-Line, or subscribing to WPAS Email Updates.
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4. Elimination of State SSI Supplement
State changes policy for paying Supplemental Security Income (SSI) - Some recipients stand to lose Medicaid
Supplemental Security Income (SSI) is a federal program for low-income people. It mails out cash payments to individuals who are blind, have disabilities, or are elderly. Currently, Washington State is paying an additional Supplemental Payment to SSI recipients, but that supplemental program is about to change.
The State program, which is called SSP, has been costly and the Legislature and DSHS are looking to save money. They have decided to take the money they were using for SSP and use it in a completely different way. They found some Division of Developmental Disabilities (DDD) programs that are currently funded exclusively by State funds. By replacing the State funding with SSP money, DSHS found a way to save money.
This may cause many problems, however.
If an individual receives SSI s/he is automatically eligible for Medicaid. This is an important benefit for many people who are blind, elderly, or who have disabilities - it gives them access to health care. There are some individuals who were receiving a small SSP check, but not an SSI check. Now that they will no longer receive any check at all, they stand to lose their Medicaid coverage.
People who were receiving DDD services that are being replaced by the SSP money may also lose services. There are federal rules that are attached to the SSP payments, so some people who were receiving services previously may no longer be eligible to receive State payments for those services.
Confused? You are no t alone. Many Legislators were confused by this policy change, and they voted for it. There are more questions than answers about this new program. WPAS will bring you more information as it becomes known. Sign up for WPAS Email Updates on this and other issues.
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