Sen. Cantwell, health care leaders in Spokane say proposed Medicaid changes could have harmful ripple effects

Sen. Maria Cantwell visited Spokane Wednesday to gather ammunition for the coming Congressional debate over the future of Medicaid funding.

In a roundtable meeting, Cantwell spoke with health care providers and executives from Providence Health & Services, Frontier Behavioral Health, Community Health Association of Spokane and others about the likely impact of a Republican plan to limit Medicaid funding to a fixed amount per state per year.

More than 123,000 adults and 93,000 children in Spokane County are enrolled in Medicaid, according to data from the Washington Health Care Authority. Cantwell said changing Medicaid funding to a block grant system, which Republicans have proposed as a cost-saving measure, would cause some of those people to lose coverage.

“This is one of the communities that I think would be most impacted,” Cantwell said.

Medicaid has always been funded as an entitlement program, which means anyone who meets the criteria can sign up and receive benefits. States administer their Medicaid programs, and the federal government pays each state a fixed percentage of those costs. If more people enroll or the people enrolled use more services, the federal government ends up spending more money.

In 2015, the federal government spent $545 billion on Medicaid, making it one of the most expensive government programs after Social Security and Medicare.

A Congressional Republican proposal, endorsed by President Donald Trump, would shift Medicaid to a block grant system. States would get a fixed amount of money per year from the federal government and decide how to spend it. Supporters say that system would encourage states to be more efficient with their funding and cut overall costs.

A 2011 analysis by the nonpartisan Congressional Budget Office estimated a similar proposal by now-Speaker Paul Ryan would cut federal Medicaid spending 35 percent in 10 years.

But Cantwell, and the health care providers who met with her Wednesday, said cuts would just increase government spending on other services, like jails, while pushing up costs for private health care providers. Jeff Thomas, the CEO of Frontier Behavioral Health, said they’ve seen an average of 200 new patients per month who received health insurance through the Affordable Care Act’s Medicaid expansion.

Before those people had insurance, their only way to access mental health care was to become so debilitated they were put on an involuntary mental health hold in a psychiatric hospital, he said.

“They would oftentimes end up in emergency departments, in jails,” Thomas said.

Since Medicaid was expanded, Providence Health Systems has seen fewer self-pay and uninsured patients in its hospitals, chief strategy officer Scott O’Brien said. That allows Providence to hold down costs for patients with private insurance because they don’t have to make up for free care provided to uninsured people.

Right now, the system gets about 70 percent of its revenue from Medicare and Medicaid, O’Brien said. Any reduction in that amount would put more pressure on the remaining 30 percent of patients with private insurance to cover costs.

“Decreasing the budget to support the needs of the population isn’t going to decrease the demand for services,” O’Brien said.

Rather than switching Medicaid to block grants, Cantwell would like to see incentives for innovations that reduce the cost of patient care within Medicaid while improving outcomes. She touted a shift in Washington’s aging and long-term care that allowed Medicaid to cover in-home care for seniors, rather than more expensive nursing home care, a process called rebalancing. That change saved Medicaid about $2.5 billion per year, she said.

“That’s where you get the savings, not from trying to cut people out of Medicaid,” Cantwell said.

Art Swannack, a Whitman County Commissioner and chair of the governing board for Aging and Long Term Care of Eastern Washington, said a block grant shift could cut seniors off from health care in rural Washington if it’s not done carefully. Especially in rural areas, people tend to go without care if existing options change or go away, he said.

Though he’s a Republican, Swannack said he shares Cantwell’s concerns about the proposed shift. He said the rebalancing in Washington was a good example of innovation, and hoped any new policy would encourage efforts like that.

“If you cut across the board, you’re going to hit some areas harder than others,” he said.