Two trends are afoot to reduce staggering cost increases in Medicaid, the federal-state partnership that helps the poor and elderly with health care costs:
•Meeting in Washington recently, the National Governors Association appealed to Congress to halt a pending shift in Medicaid costs worth $13 billion.
•Led by California, some states are urging citizens to buy long-term care insurance to cover future potential nursing home fees currently paid by Medicaid.
Governors traditionally spar with the federal government over how much of the Medicaid bill Uncle Sam will pay. Congress and the administration, though, are always looking for ways to cut the federal share.
With long-term care, savings are critical. The Wall Street Journal reports that Medicaid spending on custodial care hit $100 billion last year. This has led the states to consider alternatives, such as increased home health care.
One option is to encourage purchase of long-term care policies, one of the newest, least known and most controversial types of health care coverage. Possibilities include partnerships with the states in which individuals get help paying policy premiums.
It makes sense for states to push long-term care policies. The Oklahoma payout to nursing homes is approaching $500 million a year.
But should states act as marketing arms for private insurers, lending their authority to what is essentially a matter between consumers and insurers? California Gov. Arnold Schwarzenegger sent six million letters to people in his state last year, the Journal reported. The letters were sales pitches for long-term care insurance.
Consumer advocates naturally criticized the move, but the states must do what they can to stem the growth in Medicaid expenditures.
Look for more aggressive efforts by the states to shift nursing home costs to the private sector.
