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Location: Strasburg, Virginia

Monday, December 12, 2005

State Republicans announce reform plan for Medicaid program; A1

By Garren Shipley
Daily Staff Writer

Republicans in the House of Delegates are set to announce today a sweeping reform plan for the state’s Medicaid program.

Proposed changes to the federal-state health insurance program for lower-income and disabled Virginians will include:

• An optional health savings account plan that would allow recipients to choose their own health-care plans to be paid for by the state.

Medicaid recipients would receive a “savings account” each year with a set amount of money to be used to purchase a privately run, state-approved health insurance plan.

Based on a program being developed by officials in South Carolina, the options are designed to give Medicaid users more control over their health care.

• A “tiered” system that will create different benefit plans for different needs, such as for children and adults.

• Specialized health courts to deal with health-care issues.

• A consolidated Medicaid fraud unit, combining efforts by the attorney general’s office and the Department of Medical Assistance Services.

The package is not designed “to address anything that’s inherently wrong,” said Del. Philip Hamilton, R-Virginia Beach, who led a GOP task force studying the issue.

Compared to some states where costs have jumped by as much as 20 percent per year, Virginia’s 7.1 percent growth in fiscal 2005 and projected 3.8 percent in fiscal 2006 are relatively minimal, according to House Republicans.

“Virginia has done a good job,” Hamilton said. “When you look at what’s going on in other states, we’ve got a lot to be proud of.”

But “we want to make sure that if we have growth in this program, that it’s going to be manageable,” he said.

Rather than address the situation once Medicaid has become a budget killer — eating 40 percent of all general fund revenues in 2025 if nothing changes — delegates said they wanted to take a proactive approach.

In fiscal 1987, Medicaid took up 6.1 percent of the state’s general fund, rising to 13.8 percent by 2004, according to statistics compiled by the Department of Medical Assistance Services.

In 2004, more than 678,000 Virginia residents, or just more than 9 percent of the population, were eligible for Medicaid.

Medicaid enrollees won’t be required to adapt to all the changes, Hamilton said. But it will be an option for those who want a more active role in their health-care decisions.

The plan came from good ideas all over the country, Hamilton said.

“We didn’t need to reinvent the wheel. We looked at South Carolina and Florida,” he said. “We specifically didn’t look at Tennessee,” where a Medicaid reform plan launched in 1994 was all but ended this year by Democratic Gov. Phil Bredesen after unsuccessful efforts to contain costs and scale back some benefits.

Virginia Gov.-elect Tim Kaine told reporters in Page County on Thursday that Medicaid will be a major issue for his administration, given changes to the program at the federal level.

Kaine said he doesn’t have a specific reform plan to present as of yet, but that he’ll have Medicaid experts in his cabinet.

The General Assembly convenes in January.