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Change to children's Medicaid program brings in fewer dollars than expected in first month

Change to children's Medicaid program brings in fewer dollars than expected in first month

Idaho Freedom Foundation staff
June 24, 2010

When officials with the Idaho Department of Health and Welfare (DHW) testified before state lawmakers in early 2010 pitching changes to a children's Medicaid program, they told legislators that they believed their proposed changes could bring in as much $200,000 in additional revenue to the state, or about $16,600 monthly.  After receiving approval for the change, the department enacted rules for it in May and started billing parents for children's services, but received fewer dollars than expected in the first month.

Billing for some parents of the Katie Beckett program recipients began May 1.  Tom Shanahan, spokesman for DHW, said that the department billed 188 families more than $25,000 for services in the month of May, but only received payments totaling about one-third of that amount.  DHW officials reported receiving $8,730 from 88 families, which means that 52 percent of families didn't pay for services. Shanahan said that each month DHW will bill  an additional 180 of the families on the program, meaning many of the 2,150 families using Katie Beckett have yet to be billed.  He pointed out that as each family is newly billed, the department will take in increased amount of revenue.  DHW projects that it will surpass the $200,000 mark, but Shanahan warned that the final total shouldn't be forecast based on receipts of the first month alone.

The reason behind the relatively low payment numbers could be attributed to Rep. Pete Nielsen, R-Mountain Home.  When the House Health and Welfare Committee was at a stalemate over DHW's proposal to start billing for Katie Beckett recipients, Nielsen told fellow committee members that payment for the program would not be required, but would rather be a request from the department.  That also meant that if the move by DHW received committee approval, families who decided not  to pay wouldn't have their credit scores negatively affected by the state.  Nielsen confirmed that fact with the program administrator, which swayed enough votes for the proposal to receive approval.

Shanahan told IdahoReporter.com that his agency is unable to pinpoint the exact reason for the low numbers of people paying the bills.  "We don't have an answer that has any factual basis to provide. We don't think the payment participation is related to the economy - if a family has a job loss or reduction in income, we take those circumstances into consideration and make allowances or a redetermination. We honestly do not know what impact Nielsen's comments had on the parents of children enrolled," Shanahan said.  He added that the department is thankful and appreciate of those parents who have decided to partially pay their way in the program.  "We do appreciate the families who did the right thing and paid their share, for our state's Medicaid program has a very serious budget deficit; we need to preserve the funding for people who need it most and have no other options."

The Katie Beckett program is just one of the many services offered through the department and Medicaid.  It provides personal care services to more than 2,100 children in Idaho, at a cost of about $37 million a year.  More than a year and a half ago, lawmakers ordered DHW to find ways to save money and the department formulated a plan to charge the parents of children receiving services through the Katie Beckett program.  The department designed the fee structure as a progressive, sliding scale type, meaning that low income families would not be billed by DHW, but those families making more than 150 percent of the federal poverty level would and the amount they were asked to pay would increase according to income levels.

For example, a family of four, making $2,750 a month, or 150 percent of poverty level, does not have to contribute to the program.  A family of four making $10,000 a month, however, is asked to pay $300 a month.  The cap for required payments from parents will be set at 5 percent of family income.  High-income families who pay into an insurance policy for their disabled children receive a 25 percent discount on the payment required by Medicaid.

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