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SALT LAKE CITY — With the demand for Medicaid growing dramatically, a Bountiful senator has come up with a plan he believes will keep it from gobbling up more than a third of the state's budget in the next decade.
"It has become the Pac-Man of our budget," Republican Sen. Dan Liljenquist said Thursday as he prepared to move his proposal forward. "The growth path we're on is unsustainable."
His bill would establish a framework for Utah to better manage future Medicaid costs. It requires federal approval to be implemented, which Liljenquist said he has worked since last summer.
Medicaid currently makes up 18 percent of Utah's general fund budget. Projections at the current growth rate put that at 36 percent by 2020, even without federal health care reform which will significantly increase the number of people eligible for benefits. The federal health care program primarily serves low-income people, including children, senior and disabled.
It has become the Pac-Man of our budget. The growth path we're on is unsustainable.
–Sen. Dan Liljenquist
Liljenquist doing nothing would have dire consequences for Utah such as a dramatic tax increase or laying off 20,000 teachers.
Medicaid is causing headaches for cash-strapped states throughout the country.
In a letter to governors Thursday, Health and Human Services Secretary Kathleen Sebelius was cool to the idea of cutting beneficiaries from the Medicaid rolls by restricting eligibility, as Arizona has requested and other states are considering.
Instead, Sebelius urged states to find savings through other approaches, including charging higher co-payments for some services, limiting certain benefits, managing high-cost patients more efficiently, squeezing drugs costs and cracking down on improper payments.
Liljenquist's proposal centers on changing how Medicaid providers are paid.
"Currently, we have incentive to over treat and to drive more procedures than might be necessary," he said.
The idea is to place the incentive for services on cost and quality of care, not the number of procedures, which is how providers make money. To that end, Liljenquist wants to move to an HMO model where people have a "home" hospital to manage their care.
The bill would do four basic things:
- Prioritize managed care over fee-for services
- Limit member and monthly growth
- Establish evidence-based standards of care
- Set up a Medicaid rainy-day fun
"Right now, Medicaid hits us when we can least afford them, and that's when the economy is down," Liljenquist said.
Senate Minority Leader Ross Romero, D-Salt Lake, the concepts of the plan seem to make sense.
"Medicaid is taking a lot of the state's resources and getting reform in line is certainly appropriate," he said.
The Utah Hospital Association and the Utah Medical Association support the bill, Liljenquist said.
Story compiled with contributions from Dennis Romboy and The Associated Press.
