The SHARE Plan endorsed by Wyoming Gov. Matt Mead has a new face, one that resembles a health savings account plan from Indiana.
Sen. Michael Von Flatern (R-Gillette) filed Senate File 129 – SHARE Plan for Medicaid expansion on Monday afternoon. The Senate Labor Committee approved the bill Wednesday morning on a 4-1 vote, adopting major changes requested by committee chairman Sen. Charlie Scott (R-Casper).
The committee agreed to drop a competing health savings account bill for Medicaid expansion, Senate File 66 – Medicaid expansion alternative. The next action on SF 129 is slated for Thursday morning before the Joint Appropriations Committee. Following that it will go to the full Senate for three rounds of debate.
The amended SF 129 effectively rewrites the Wyoming Department of Health’s proposed policy that was vetted by the Center for Medicaid and Medicare Services and projected to be revenue neutral through 2020. In its place is a bill that has not undergone fiscal review, raises questions about implementation and administration, and creates uncertainty over whether CMS would approve it in parts or as a whole.
Though CMS approved a health savings account approach to Medicaid expansion in Indiana this week, Wyoming’s bill charts a different course in a few areas: It does not have a dedicated state funding stream. It would enable patients to take part of their balance with them if they start making more money and move off the program.
Even with the addition of health savings accounts that Scott expects will save the state money, it’s uncertain whether SF 129 will pass the Senate.
Scott accuses DOH of inflating numbers
The amended Senate File 129 would expand Medicaid using third party administrators, rather than the Wyoming Department of Health. The department previously helped draft a fiscal note for SF 66 — proposed by Sen. Scott as an alternative to the departments original SHARE Plan — predicting third-party administration could cost 32 percent more than having the state handle the program.
After Wednesday morning’s Medicaid expansion discussion, Sen. Scott told WyoFile he believes the Wyoming Department of Health has purposefully inflated its estimate of what it would cost a private vendor to administer the expanded Medicaid program.
WyoFile asked Sen. Scott if he thinks third-party administration of Medicaid expansion would cost less than state management.
“Yeah, the way the state was approaching things, the Health Department was bound and determined to make that expensive because they didn’t like it. It’s simple as that,” Scott said.
In a public meeting last week Department of Health director Tom Forslund explained that KidCare CHIP is the only third-party managed program that could be used to build a projection. A Legislative Service Office analysis developed with Department of Health input predicted higher costs for private management and higher reimbursement rates for medical providers. The description of the estimate is here.
“The department does stand by the numbers that it has provided,” said Department of Health Spokeswoman Kim Deti. “Beyond that we are going to decline to comment further.”
Sen. Bill Landen (R-Casper) had concerns about the cost of the third-party administration. “Even though we contract with a private vendor, we are still going to be requiring an awful lot out of our public administrators, because that’s where the information is going to come from,” Landen said. “We are creating another entity over here that we are going to have to communicate with and negotiate with.”
Sen. Scott’s amendment to SF 129 would create a task force to negotiate approval of the plan with the CMS. Scott stipulated that the leader of the task force could not be an employee of the Wyoming Department of Health. He included that provision because he didn’t want director Forslund leading negotiations on a plan that is substantially different from the SHARE Plan the Department of Health previously developed.
“We’re trying for something (Forslund) didn’t approve of,” Scott said after the meeting. “He has staked some of his professional reputation on saying this won’t work. … People need to believe in what they are trying to do when they negotiate with CMS.”
Scott invited Forslund to comment on the amendment during Wednesday’s meeting. Forslund declined.
The original SHARE Plan was a two-tier program, with different payments required for Medicaid recipients depending on their income.
In the revised SF 129, all participants will pay premiums on a sliding scale, with the money going into a health savings account, technically called a Personal Health and Wellness Account. All patients who visit their doctor or have a procedure will make copayments using the balance of the health savings account.
The bill would provide for each health savings account to have a “virtual balance” of $500, a concept introduced by Sen. Chris Rothfuss (D-Laramie). This would prevent Wyoming from having to fill the accounts with state money to get the program started. CMS will not provide seed money for the health savings accounts, but it will provide reimbursements.
Scott compared the virtual balance to a line of credit giving patients the right to incur an expense. He he intends for the federal government to back up expenses as they arise.
“The feds objected to using their real money (for starting up the accounts), but the real money comes when you authorize a medical expense,” Scott said. “It comes out of their hide.”
During previous debates of Medicaid expansion, Scott has repeatedly said that he expects the federal government to renege on the promise to fund its share of Medicaid expansion.
The amended bill carries penalties if participants do not pay their monthly premium into the health savings account. Patients would forfeit their account balance if they do not pay for 90 days, and be disenrolled from the program.
On the other hand, the bill would reward patients whose upward mobility moves them out of the program. If a participant starts making too much money to qualify for Medicaid (more than 138 percent of the poverty level), they could use the balance of the health savings account above $600 to pay premiums on private health coverage for up to a year.
CMS has resisted allowing Medicaid recipients to “walk away” with federal dollars.
Scott didn’t know how much it will cost to start up the program, saying he would leave that to the Joint Appropriations Committee. “We punted on that,” he said. Over time Scott predicts the program will cost 15 percent less than a traditional Medicaid expansion. The Legislative Service Office fiscal note for SF 66 cites academic literature predicting health savings accounts reduce Medicaid utilization by 15 percent.
Scott’s amendment to add health savings accounts to SF 129 passed unanimously. He voted for the amended bill along with Landen, Sen. Ray Peterson (R-Cowley), and Sen. Bernadine Craft (D-Cheyenne). Sen. Ogden Driskill (R-Devils Tower) voted no on the bill.
Gov. Mead’s policy director Mary Kay Hill called the amended bill a compromise, and urged the legislature to review the Healthy Indiana 2.0 plan that CMS approved this week.