That is the conclusion of the Center for Budget and Policy Priorities, and I think they are being fairly charitable in their description. On November 8, the Medicaid commission (created by the Bush Administration in 2005) put forward broad recommendations designed to “promote Medicaid’s long- term fiscal sustainability, while also emphasizing quality of care,” that were to be considered earlier this month. According to the CBPP, the commission's recommendations "raise serious concerns, especially for vulnerable groups such as low-income seniors or people with disabilities." My first reaction to this was that perhaps this could reasonably be expected for any commission hand-picked by Bush appointee Leavitt, Secretary of Health and Human Services, but maybe that is too harsh of a statement.
One concern is that states would be allowed under the new recommendations to place the estimated 7.5 million elderly and disabled beneficiaries eligable for Medicaid and Medicare (so-called "dual eligables") into managed care plans. According to CBPP: "Currently, most dual eligibles receive Medicare and Medicaid services through a traditional “fee-for-service” arrangement, in which health-care providers bill the government for the cost of the services they provide to beneficiaries. Under a managed-care arrangement, in contrast, private firms receive a set amount per beneficiary from the government to provide health care. This gives them an incentive to keep costs as low as possible — including, potentially, by skimping on beneficiaries’ care.
Managed care for dual eligibles could theoretically improve coordination between Medicare and Medicaid and reduce costs, and a few pilot projects in this area appear promising. But as a recent Wall Street Journal article on Medicaid managed care* suggests, allowing states to simply enroll dual eligibles in managed care would create real risks. As the chairman’s mark notes, dual eligibles have lower incomes and more impairments than regular Medicare beneficiaries and are more likely to live in nursing homes. Yet the recommendation specifies no minimum federal standards to protect dual eligibles from substandard health plans. While these individuals would be able to “opt out” of managed care if dissatisfied, the obvious vulnerability of this population — fully one-third of dual eligibles have mental impairments or disorders — makes it unlikely that many would be able to understand, let alone exercise, this option.
Another concern involves the fact that the recommendations, if approved, would apparently allow states to provide different benefit packages to different groups of beneficiaries, with virtually no federal protections. The report notes that states could, for example, decide that some beneficiaries would no longer be eligible for inpatient care or doctor visits, or set their financial eligibility levels below the minimum levels that currently guarantee coverage for certain groups such as poor children and pregnant women. The recommendations appear to go far beyond what states have been allowed to do through waivers of federal Medicaid law.
An example of the type of strange circumstances that could be created for vulnerable beneficiaries is described thus: "States apparently could simply provide beneficiaries with vouchers to purchase coverage on their own in the private market, with no federal standards as to the benefits that the plans would have to cover, no limits on the out-of-pocket costs that poor beneficiaries would have to pay, and no guarantees of access to affordable plans in the generally unregulated private market."
This is not providing a market-based solution to Medicare or Medicaid, it is creating a market-based disaster for those unable to afford their out-of-pocket health care costs.
Finally, the recommendations would create new federal tax subsidies for the purchase of private long-term care insurance-- including a tax deduction for the purchase of long-term care coverage--but wouln't significantly increase the number of people with such coverage. Thats's because, as CBPP points out, these subsidies would do little to help low- and moderate-income people purchase it, with the bulk of the benefits going to to high-income taxpayers (i.e., the people most likely either to have long-term care insurance already or to be able to pay any future long-term costs directly.)
Of course, these are the same people helped by the rest of the Bush/GOP Congress tax cuts, so there's nothing really too surprising here. But it would be nice to see a policy proposal that actually strengthens the safety-net for people who will need to rely on government-provided health insurance, as opposed to providing yet another tax cut to retired wealthy people. But that's just me I guess.