Moderator: Good afternoon, and thank you for joining us. Today our guests are Nelda Barnett with the AARP and Alan R. Weil with the National Academy for State Health Policy to take our questions on Medicaid. Let's begin!

Nelda Barnett and Alan R. Weil : Nelda and Alan: Thank you very much for inviting us to join this forum. We look forward to a spirited debate on this very important issue of Medicaid.

_______________________

Hernando, Fla.: Qualifying for Medicaid involves Income and assets. The entry level is way below Federal Poverty Levels. Why doesn't qualifying involve actual medical expenses being incurred?

Nelda Barnett and Alan R. Weil : Alan: It is true that Medicaid eligibility is tied to income and assets. Most states also have what is known as a "medically needy" program that extends eligibility to people whose income is above the standards if they also have high medical costs. The medically needy program is authorized by the federal government but it is up to each state to set the specific eligibility rules for its program.

_______________________

Fort Pierce, Fla.: Why is AARP on the Medicaid bandwagon? I can understand the Medicare bandwagon but not Medicaid. In our state we have a "Well Kids" program which is a very good thing. But the medicaid program is abused by several groups and taxpayers get stuck with the bill. Using ambulance services as a convience and emergency rooms as free clinics. As it was explained to me as a ride-along, 'This guy has figured out how to use the system, don't be mad at him just because you are being screwed by the system'. It seems to me on this issue, AARP is being highjacked by a liberal mindset and service providers not to the benefit of the AARP group.

Nelda Barnett and Alan R. Weil : Nelda: AARP is on the Medicaid Bandwagon because so many of the elderly are persons who are subjected to the need of this public benefit.

_______________________

Ontario, Calif.: What can be done about the disabled workers in the work force who have been boomaranged back into poverty because of fear?

Nelda Barnett and Alan R. Weil : Alan: The federal government recently made changes to Medicaid that make it easier for people with disabilities to go back to work and retain the important health benefits that Medicaid provides. The program is still relatively new, and it is up to each state to implement the program, but it holds great promise for helping make work a viable option for people with disabilities.

_______________________

Chicago, Ill.: Please explain to me why those who own homes and other assets should be able to use Medicaid funds for nursing home care and pass their assets on to their children. Medicaid is not the "heir's asset protection act", but rather a program for the very poorest among us. Why should my kids be able to pass on the costs of my final care to other taxpayers and reap the benefits of my savings for themselves?

Jim O'Connell

Nelda Barnett and Alan R. Weil : Alan: We provide many services to people as they grow older - housing, social services, and medical care. As a society we generally do not ask people to repay these costs out of their assets when they die. Indeed, Medicare coverage is provided to people over 65 regardless of their income, but no one has ever suggested that people pay back Medicare for the hospital and doctor care they received. It is reasonable for us to discuss as a society how many of life's expenses should be borne by the individual and how many should be shared by society as a whole, but it does not seem reasonable to single out Medicaid as the one program that people should repay if they need it during their lives.

_______________________

Myrtle Beach, S.C.: If this administration is supposed to be "so Christian", how can they cut money to programs that help the poor? Also, if Companys like Walmart paid a decent wage and paid employees healthcare, this problem wouldn't be so large!

Nelda Barnett and Alan R. Weil : Nelda: Thank you for the question. We agree with you about cutting programs for the poor, especially Medicaid that provides such important help to families, children, persons with disabilities and frail elderly. Medicaid is the "safety net" for those who can't get coverage. As health care costs continue to increase more employers are drooping coverage or shfting costs to heir employees. Many of those go to Medicaid. In fact, over 60% of kids on Medicaid live in families where one or more parent is employed full-time. If Medicaid was not available where would these folks go? Even if they don't have coverage, they will need medical care. Employers choose to provide health insurance to their employee, choosing which employees for what services, and how much they will contribute. Without Medicaid as the "safety net", these folks would join the already too many people without health coverage

_______________________

Prior Lake, Minn.: How will proposed cuts change or what impact will it have on Spousal Impoverishment relief when the wife or husband enters a nursing home?

Nelda Barnett and Alan R. Weil : Nelda: Some recent proposals have suggested that the protected status of the home be removed for Medicaid eligibility. These proposals would require older homeowners to use their home equity, such as by taking out reverse mortgages, before becoming eligible for Medicaid benefits. While using home equity to finance long-term care may be a good option for some people, AARP strongly opposes proposals to require older homeowners to use their home equity to pay for long-term care or medical expenses in order to be eligible for Medicaid.

One of our concerns with such proposals is that exhausting home equity could jeopardize the spousal impoverishment protections in current law and leave the community spouse - who may also need care one day - more vulnerable. Americans should not be forced to forfeit their homes to secure the care they need. We need to provide Americans with better options for financing their long-term care.

_______________________

Silver Spring, Md.: The addition of co-pays is included in proposals for changing Medicaid. What do you think will be the impact of this change, if it is enacted, and any other changes to the program?

Nelda Barnett and Alan R. Weil : Alan: Copayments are common in private health insurance, but people on Medicaid generally have income below the poverty level and very little disposable income. We know from research that charging people copayments reduces the number of services they use. Sometimes these reductions are harmless, but they can be quite harmful in certain cases--particularly when people fail to take medications that they need to manage a chronic condition. Small copayments do not save the government much money, and most of the burden falls on people who are sick and need more health care services. Many health care providers will simply ignore the copayment if a person says they cannot pay it. All-in-all I would expect increased copayments to yield few savings for Medicaid while it increases hardship among the poorest and sickest recipients.

_______________________

Newport Richey, Fla.: I am sure some cuts are needed, but do you know where the cuts are aimed?

Nelda Barnett and Alan R. Weil : Nelda: We are concerned about cuts to Medicaid for a number of reasons. First, while Medicaid is the biggest health program in America -- more beneficiaries and more dollars than Medicare, for example -- it still reaches fewer than one half of those who could meet eligibility requirements. Second, a number of the proposed cuts would affect those most in need.

But, we do need to help make Medicaid more efficient and effective. This could be done in a couple of ways without kicking peopole off the program or limiting access to needed services. One, is to give states and the federal government greater authority to get drugs at lower prices. Second, would be to shift spending on long-term care from nursing homes to the community.

_______________________

Lincoln, Neb. : How large and pervasive is the problem of Medicaid fraud?

Nelda Barnett and Alan R. Weil : Alan: Fraud is a substantial problem throughout the health care system, and Medicaid is no exception. It is very important to note that most fraud is committed by providers, not people who apply for benefits. The New York Times recently had a series of articles showing very serious abuses committed by a handful of people. Under federal law, every state is required to have a fraud prevention unit, and the federal government provides significant funding for these units. Unfortunately, people attempting fraud can be quite resourceful as they stay one step ahead of the authorities. Every Medicaid agency I know takes concerns about fraud seriously, and I believe most administrators would agree that more resources should be devoted to fraud prevention and prosecution.

_______________________

Arlington, Va.: Does AARP support the newly created Medicaid commission?

Nelda Barnett and Alan R. Weil : Thank your for this question. AARP does support the recommendations made by the Medicaid Commission for short-term savings in the budget reconcilliation process. We feel it will help to bring about getting better prices and rebates on drugs and increase use of home and comunity base services as an alternative to nursing home care.

_______________________

El Cerrito, Calif.: Advances in genetics are greatly increasing the number of disorders, including those of childhood, that can be tested for to help with diagnosis and treatment. What should the role of Medicaid be vis-a-vis these new scientific/medical developments?

Nelda Barnett and Alan R. Weil : Alan: One of the most important provisions of Medicaid is a program called "Early and Periodic Screening, Diagnosis and Treatment" or EPSDT. Every child enrolled in Medicaid is covered by this program and it assures that children are screened for conditions that might be found and treated at an early age, thereby preventing more serious illnesses down the road. As the primary source of insurance coverage for poor children, Medicaid plays a major role in ensuring that the medical benefits associated with advances in genetics are enjoyed by children regardless of their income.

_______________________

San Antonio, Tex.: Shouldn't governors be given the flexibility necessary to make the Medicaid program fit the needs of the poor people in their states?

Nelda Barnett and Alan R. Weil : Nelda: States and governors already have a great deal of flexibility in designing, managing, and paying their share of Medicaid. For example, within broad federal guidelines, states set the financial elgigibility criteria and can choose which services to cover beyond the list of mandatory services. For example, prescription drugs is an optional, not mandatory Medicaid service.

States may want more flexibility. But, we need to ensure that there is public participation and comment on those proposals. We also need to ensure that the state legislature is engaged and involved in what is being proposed.

_______________________

Lincoln, Neb. : It is frequently stated that the United States health care system is fragmented and needs reformed. Since Medicaid is an important part of our health care system, what ideas do you have for strengthening it?

Nelda Barnett and Alan R. Weil : Alan: A full answer to your question would take more room than we have here. It is certainly true that the American health care system is fragmented. Many of Medicaid's problems are identical to the problems the overall system faces. I would suggest two ideas that would go a long way toward strengthening our system. First, we need to be sure that every American has health insurance. There are many ways to solve this problem--and they are all controversial--but if we solved this problem we could put more of our energy into improving how health care is delivered and financed. Second, we need a national policy on the financing of long term care. Medicaid has become the primary payer of long-term care services essentially by default. We need a more rational and more fair way of paying for the services that so many of us will need at some point in our lives. If we address these two topics, we will have made great progress.

_______________________

Clearwater, Fla.: It seems the majority of medicaid dollars go to pay for people in nursing homes. Are there other, lower-cost options to nursing homes that AARP supports?

Nelda Barnett and Alan R. Weil : Nelda: AARP does support options for long-term care that include greater access to home and community-based care. In many cases an older person might be able to remain in their own homes and receive home and community based services which may be less costly than institutional care.

_______________________

Davenport, Iowa: 2 questions for you. Is AARP against the Bush administration on this? And, does the hurricane change anything when it comes to cutting Medicaid? Thank you.

Nelda Barnett and Alan R. Weil : Nelda: The aftermath of Katrina is changing all of our lives. At AARP we are greatly concerned about what we are seeing, hearing, and reading about what all the residents are suffering, especially the elderly. It is difficult to think about cutting Medicaid at this time when we are going to need all the resources available to meet the medical and long-term care needs of the elderly. Not only those who remain in AL, LA, and MS, but the states where people are going to. In fact, Medicaid is the only program that can meet those important medical and long-term care needs fo those who are in tragic circumstances, whehter they were evacuated to TX or remain in MS.

_______________________

Dublin, Ohio: How has the eligibility guidlines changed, i.e, spend down, look back? When does the "look back" start? Is it when one enters a nursing home or time of application
for Medicaid? Is it three years or five in Ohio?

Nelda Barnett and Alan R. Weil : Nelda: Congress is considering changing the current lookback period from three years to five years. The lookback period starts at the time of application for Medicaid. AARP is opposed to changing the lookback period to five years. Extending the lookback period would catch people who have no intention of gaming the system, but who are trying to help out their families or give to charities. For example, a woman who has a stroke now and needs Medicaid to pay for nursing home care may have helped a grandchild with college tuition four years ago. She did not know that she would need Medicaid years later. She just wanted to help her grandson go to college.

Congress is also considering changing the date of the penalty period for the purposes of asset transfer from the date of the asset transfer to the date of application for Medicaid. Changing to the date of application could mean that many Medicaid beneficiaries would find themselves unable to qualify for Medicaid and unable to pay for the care they need. For example, an 80 year old man has a stroke and after release from the hospital enters a nursing home. He does not have the financial resources to pay for the nursing home care so he applies for Medicaid. In reviewing his Medicaid application is is discovered that he has a three month penalty period for an asset transfer two years ago. Using the date of his application for Medicaid as the start of his penalty period, he has to wait three months for Medicaid to pay for his nursing home care. In the meantime he still needs the nursing home care.

The walthiest Americans are not clamoring to be on Medicaid - they can pay for long-term care themselves. People turn to Medicaid because they do not have other options.

We need to give people tools and incentives to plan and pay for long-term care. We need to find solutions. That's why we need a national debate over how to plan and pay for long-term care.

_______________________

Old Bridge, N.J.: Over the past several months, I've listened to two opposing views of the Medicaid funding arguments. According to the Bush Administration, Medicaid is underfunded as is Medicare and Social Security. The Bush Administration proposes to make what it contends to be minor cuts to Medicaid by increasing the dollar amount of copays, claiming by doing this, it will save Medicaid from being bankrupt completely in a shorter period of time.

However, those opponents I've listened to claim that by increasing copays to the already indigent sick and elderly, it will make Medicaid benefits entirely unaffordable.

Which of the two arguments holds true?

Nelda Barnett and Alan R. Weil : Alan: There is some truth to each. First, it is important to note that there is no such thing as Medicaid going "bankrupt." There is no Medicaid trust fund that can run out of funds--the program is paid for each year out of current state and federal revenues. Medicaid can no more go bankrupt than can the federal government--and that is impossible to imagine.

With that introduction, it is true that the dollar value of the Bush Administration's proposed cuts amount to no more than a few percent of the overall cost of the program. However, their original proposal did much more than increase copayments. They propose a variety of new options for states that could have much greater effect. In fact, the ultimate effects of the proposal are hard to know because it would be up to individual states to make decisions and we don't know what they would be.

At the same time, it is also true that the effects of increased copayments fall most heavily on people who are poor, sick, or elderly. For example, a $10 per prescription copayment, which might be affordable for a working person, would impose a significant burden on someone who requires 7 different drugs to manage various conditions and lives on a modest Social Security pension.

In the end it is a question of priorities--if the federal government needs to cut spending to balance its budget, where should those cuts be made? Who should bear the burden of those cuts?

_______________________

Denver, Colo.: Medicaid should be a safety-net for those with no resources, not a program for those with significant resources. Isn't it fair, if someone has a home worth $300,000., that they contribute some portion of that home equity to paying for long-term care costs?

Nelda Barnett and Alan R. Weil : Nelda: Most Americans want to pay a portion of the care - whether it's health care or long-term care. But they also want to know the extent of their obligation.

One of the most frightening aspects of long-term care expense is the seemingly bottomless pit of costs. Most AARP members are concerned about outliving their finances and having to depend on their children or public programs. We say to Americans all their lives - live responsibly, build a nest egg to buy a home, put your children through school and be independent in retirement. And then in a snap, it's all gone.

Home equity may be one possible source of helping to pay for long-term care, but it needs to be part of a broader menu that people can voluntarily choose from including incentives to save.

_______________________

San Francisco, Calif.: Aren't the problems we have with Medicaid today just part of larger problem: the failure of our health care system? If so, what should we be doing?

Nelda Barnett and Alan R. Weil : Nelda: In a letter AARP sent to Congress in July, we said that Medicaid problems can only truly be fixed by addressing larger health care system failures. We suggested that we should first find ways to provide affordable coverage for everyone, because the steadily increasing number of uninsured Americans is a key driver in Medicaid spending growth. We also suggested conducting more "comparative effectiveness" research so we can know which treatments work best and give the most value for our health care dollar. We also said there are changes we can make in Medicaid to increase its efficiency. At the same time however, we said that making changes should not merely shift costs or deny necessary care. AARP is opposed to: any proposals that would cap funding, increases in cost sharing that do not include strong protections so they do not become a barrier to care, and misguided efforts to address asset transfer abuses - extending the look-back and changing the penalty date - that would deny care to people who had no intention of gaming the system while doing nothing to close the real loopholes that allow abuses to occur.

_______________________

Little Rock, Ark.: What are your feelings on the preferred drug lists put in place by many state Medicaid programs, especially the evidence-based ones?

Nelda Barnett and Alan R. Weil : Nelda: ARRP has worked hard in a number of states to help control Medicaid spending on prescription drugs. One of the most effective tools is to develop preferred drug lists (PDLs) that operate similar to formularies that are used in most private health insurance plans. In doing so we want to control costs, but make sure that Medicaid beneficiaries have access to the best, most effective drug for them. That is why we also strongly advocate for states to establish PDLs using what has come to be called evidence-based research, which is comparing those drugs that treat the same codnition and making sure that the "best" drug is on the PDL. In addition, we also strongly advocate that the PDL can can be overriden if the prescriber determines that a different drug is more effective for a particular person than the drug listed on the PDL.

We want prescription drugs more affordable to those who purchase them -- government, employers, and individuals. But, we need to balance containing costs with making sure that people get the drugs they need.

_______________________

Plantation, Fla.: Please address the "Medically Needy" changes that are anticipated. It is a cumbersome program to work with as it stands now but we would be devasted if they eliminate it. It is very difficult to learn of any of the changes planned for Medicade or Medically Needy once Medicare takes the RX out of the hands of Medicaid. Please help - we are very grateful to everyone involved.

Nelda Barnett and Alan R. Weil : Alan: I am going to focus on the last portion of your question. Medicaid has covered prescription drugs for years, but the federal government only recently acted to add prescription drug coverage to Medicare. Under the new law, people who are covered by both Medicaid and Medicare (primarily low-income frail elders and some low-income people with disabilities) will begin to receive their drug coverage from Medicare, not Medicaid.

This transition needs to be handled very carefully. This very vulnerable group has learned how to navigate Medicaid, but will now confront a new set of rules in Medicare. The details are quite complex, but the risks for people if the transition does not go well are very substantial. I encourage you to pay close attention as this transition takes place at the end of this year.

_______________________

Cheyenne, Wyo.: Isn't the whole problem with Medicaid the fact that the government has to pay too much money for prescription drugs?

Nelda Barnett and Alan R. Weil : Nelda: Some changes need to be made to alleviate the pressure on Medicaid and make the program as effective as possible. But $10 billion in arbitrary spending cuts is not the answer and could create serious barriers to care for beneficiaries.

AARP believes that one of the areas that should be changed in Medicaid is prescription drug spending. Significant savings can be achieved through a more rational system of prescription drug spending, including more accurate payments to pharmacies, greater rebates from manufacturers, use of evidence-based formularies and purchasing pools.

_______________________

Nelda Barnett and Alan R. Weil : Alan: Thank you for the opportunity to answer a few questions today. Medicaid is a very complex program, but it plays an extremely important to the more than 50 million people who rely upon it for their health care. I encourage everyone participating in this conversation to monitor federal and state discussions about Medicaid policy.

_______________________

Nelda Barnett and Alan R. Weil : Nelda: We greatly appreciate your questions today. A number of them were about personal questions and we invite you to visit our website and share your personal stories about you and your families experiences with Medicaid.

AARP cares about Medicaid but we also care about you.

_______________________

Moderator: That wraps up our discussion! Many thanks to AARP, the National Academy for State Health Policy and all who participated.

_______________________