Health Care Priorities Left Underfunded Due to Massive Overpayments to Managed Care Plans (10/11/00)
                            MANAGED CARE PLANS

Restoring the State options to insure vulnerable legal immigrants.  Despite
the fact that legal immigrants pay taxes and have typically waited years to
come to the U.S., welfare reform prohibited States from extending Medicaid
or State Children?s Health Insurance Program coverage to legal immigrant
children and pregnant women for their first five years in this country.
This contributed to the sharp decline in Medicaid and subsequently S-CHIP
participation by legal immigrant children (from 37 percent in 1995 to 29
percent in 1999).  Restoring this State option would insure 144,000
children and 33,000 pregnant women per year at a 10-year cost of $1.6
billion, and has broad, bipartisan support including that of Governor Jeb

Fully funding the Ricky Ray Relief Fund.  The bipartisan Ricky Ray
Hemophilia Relief Fund was enacted to provide one-time $100,000 relief
payments to up to 7,500 persons with hemophilia (or their survivors) who
contracted HIV while receiving blood clotting factor between 1982 and 1987.
However, due to under-funding, approximately 5,000 people with HIV/AIDS or
their families are on a waiting list, hoping to get this relief payment
while the person infected is still alive.  Ricky Ray himself and hundreds
of others have died while waiting for this relief and none of the
initiatives in Congress includes a dollar of the needed $570 million --
which is only about 1 percent of what they dedicated to managed care

Health insurance for children with disabilities.  Children with special
health care needs are three times more likely to be ill and to miss school.
Because of their high healthcare costs, parents often cannot afford private
insurance and, instead, forego additional income to maintain Medicaid
eligi-bility.  Some even place their children in institutions or give up
their children so they remain Medicaid-eligible under unfair and outdated
rules.  The Family Opportunity Act, which has bipartisan support from 78
Senators, would give States the option of letting families with children
with disabilities buy into Medicaid.  This commonsense policy builds on the
bipartisan Work Incentives Improvement Act and is a wise investment.

Grants to integrate people with disabilities into the community.  To
address the institutional bias in Medicaid toward nursing homes, my
Administration has supported $50 million in System Grants for States, which
are part of Senator Harkin?s MiCASSA bill, to develop infrastructure that
supports community-based care for persons with disabilities.  People with
disabilities should have real choice in where they want to live, where they
receive needed services, in what services they receive, and from whom they
are obtained.

Improving nursing home quality.  Health and safety are a top concern for
both the 1.6 million older Americans and people with disabilities who
receive care in nursing homes and their families and friends.  Many nursing
homes provide high quality care.  However, recent reports found that over
50 percent of nursing homes do not maintain the minimum staffing levels
necessary to ensure the delivery of quality care.  Despite this fact, none
of the dollars in the beneficiary and provider restoration initiatives are
targeted to increasing the staffing ratios that are linked to increased
quality.  To rectify this, Republicans have joined Democrats in supporting
the Administration?s $1 billion State grant program to increase staffing
levels by improving staff recruitment and retention, increasing training,
and reward nursing facilities with good records.

Eliminating Medicare preventive services cost sharing.  The value of
preventive benefits is enormous, contributing to early detection,
management and cure of diseases that would otherwise be debilitating and
costly.  However, too few seniors use these services, in part due to
today?s copay requirements.  In the first 2 years that Medicare covered
screening mammography, only 14 percent of eligible women without
supplemental insurance received a mammogram.  Eliminating cost sharing for
current services costs about $3 billion over 10 years -- but will save
innumerable lives and dollars in the future.

Targeting dollars to vulnerable hospitals and home health agencies.
Hospitals and home health agencies have experienced financial distress in
the last several years, partly from excessive Balanced Budget Act changes
and partly from the shift to managed care which, according to recent
studies, pays well below Medicare rates.  This distress is particularly
acute among hospitals serving low-income patients.  While the Commerce
Committee made a good start in investing over

$8 billion over 10 years in Medicaid disproportionate share hospital
payments, my Administration supports investing more -- $10 billion over 10
years to increase both the State and hospital-specific limits on these
payments.  In addition, Medicare spending on home health has significantly
declined in recent years and an investment in home health care will likely
have a greater impact on improving beneficiary access to care than increase
managed care payments.

Other critical health priorities.  The provider payment restoration bills
should also include other important health policies like:  Medicaid and
CHIP outreach initiatives; Medicaid coverage of smoking cessation; extended
Medicare coverage for workers with disabilities; waiver of the waiting
period for Medicare for people with Lou Gehrig?s disease; home health
coverage for people using adult day care; and adequate funding of providers
such as teaching hospitals and hospices.  In addi-tion, there has been no
attempt by the Republican leadership of the U.S. Senate to even allow
Committee consideration of legislation for an affordable, voluntary
Medicare prescription drug benefit.  This failure to act will result in
millions of vulnerable seniors and people with disabilities waiting longer
to get the relief that they so desperately need.

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