In late May a federal district judge in Portland, Oregon, declared that the state's policy of charging some Medicaid patients a copayment of $2 for a drug prescription and $5 for an outpatient visit is illegal under federal laws covering Medicaid expansion programs. The decision affects more than 50,000 people in the so-called standard population of the Oregon Health Plan. The court also required the state to eliminate a $250 copayment for hospital visits for the standard population. However, the court rejected a separate argument to do away with monthly premiums for this group.
The suit, which was filed by the nonprofit Oregon Law Center on behalf of five residents of Dignity Village homeless camp in Portland, sought to restore some benefits that were reduced or eliminated when Oregon made changes in its Medicaid program in February 2003 under a new Section 1115 waiver—the second such waiver obtained by the state since it created its Medicaid program, the Oregon Health Plan (OHP), in 1994. The state structured the original OHP to be more inclusive than Medicaid programs in many states by using its discretion to expand coverage to optional "categorically needy" groups. However, less than a decade later, faced with one of the largest state budget crises in the nation, Oregon was forced to reconsider inclusion of these optional groups despite their continued need for coverage.
Under the waiver, the state established two separate OHP plans in February 2003—OHP Plus and OHP Standard. The former is regarded as the state's standard Medicaid benefit package, and, like the original OHP, it remains an entitlement program, meaning that Medicaid laws prevent the state from capping or freezing enrollment for eligible individuals. In addition, OHP Plus enrollees are not subject to premiums.
Creation of the OHP Standard plan, the so-called reduced-benefits package, permitted the state to move optional eligibility subgroups into a separate plan in which they are charged premiums and copayments. The restructured Medicaid program cut services for many persons with psychiatric and substance use disorders. All outpatient mental health benefits and substance abuse treatment benefits were eliminated for OHP Standard enrollees. Because OHP Standard is regarded as a Medicaid expansion program and not as an entitlement plan, the waiver also allows the state to cap enrollment on the basis of availability of state funding. State officials recently announced that they would cap new enrollment in OHP Standard on July 1, 2004, and in the future limit eligibility to about 25,000 patients.
Under the 2003 waiver, the state also implemented strict payment policies for the monthly income-based premiums of $6 to $20 for OHP Standard enrollees. When enrollees miss a premium payment, they are immediately disenrolled (the previous policy was to disenroll at six-month eligibility reviews). Nonpayment of premiums can no longer be waived for good cause, such as losing income or housing after being the victim of a crime or a disaster. People who are disenrolled are locked out and must wait six months to reenroll.
On paper Oregon's 2003 waiver was designed to balance reductions with expansions—cutting some benefits and requiring cost sharing while at the same time expanding eligibility to persons not previously covered. Before the waiver, OHP provided coverage for children and pregnant women living at 170 percent of the federal poverty level. OHP Plus introduced a small expansion for this group, which is now covered up to 185 percent of the poverty level. However, a larger expansion that was planned for parents and other adults under OHP Standard, which would have provided coverage to those living at 185 percent of the poverty level—up from the previous cutoff of 100 percent of the poverty level—has not been implemented.
In June the Kaiser Commission on Medicaid and the Uninsured (KCMU) released a report that summarizes key findings of an Oregon research collaborative that was created to assess the impact of the waiver changes. The report points out that because waiver agreements between states and the federal government do not require states to move forward with expansions as a condition of implementing reductions, the number of people who have gained new coverage in Oregon is well below projections. The state estimated that the waiver would expand coverage to an additional 60,000 people. As of September 2003, only about 2,000 new enrollees gained coverage. However, this increase was dwarfed by the loss of nearly 45,000 people from the OHP Standard plan. Enrollment fell from 95,700 in February 2003 to about 51,000 in October, according to the report, and nearly three-quarters of those who lost Medicaid coverage became uninsured.
Most of the persons who lost OHP Standard coverage did so because they could not afford the new premiums and copayments, according to research cited in the KCMU report. In April 2003, the first month that OHP Standard enrollees could be disenrolled for nonpayment of premiums, about 16,000 people were disenrolled. By October, another 31,000 had lost coverage for the same reason. People with the lowest incomes experienced the greatest losses, according to the report. Enrollment dropped by 44 percent among those with incomes between 85 and 100 percent of the poverty level, compared with a drop of 59 percent among those who had no income (who were required to pay $6 a month). The report also notes that the data on disenrollment may underestimate the impact of the premiums, because many providers in the Portland area made payments to an independent nonprofit organization to cover premiums for thousands of people who were slated to be disenrolled.
The report notes that Oregon's experience emphatically shows how difficult it is for people with low incomes to manage premiums, even those that appear to be relatively modest ($6 to $20). Among the adults who were expected to pay the new premiums were those with no regular source of income and others whose incomes just exceeded the level that would have made them eligible for OHP Plus—that is, they had incomes just above 43 percent of the federal poverty level for a childless adult ($444 a month) or 52 percent for a parent ($552 a month for a two-person family).
Restructuring Medicaid created short-term savings in Oregon, the KCMU report points out, but savings resulted largely from reduced coverage and care. Premium collections declined in 2003 because of the large unanticipated disenrollment, and the state saved Medicaid funds by not providing care to this group. However, these savings also resulted in a substantial loss in federal matching funds. In Oregon, the federal matching rate is 61 percent: for every $100 in coverage reductions, Oregon spends $49 less in state funds but loses $61 in federal matching funds.
The report, "The Impact of Recent Changes in Health Care Coverage for Low-Income People: A First Look at the Research Following Changes in Oregon's Medicaid Program," is available online on the Web site of the Kaiser Commission on Medicaid and the Uninsured at www.kff.org/about/ kcmu.cfm.
National data for 2003 from the Youth Risk Behavior Surveillance System (YRBSS) indicate that 71 percent of all deaths in the United States among persons aged 10 to 24 years result from only four causes: motor vehicle crashes, other unintentional injuries, homicide, and suicide. During the 30 days preceding the survey, many high school students engaged in behaviors that increased their likelihood of death from these four causes: 30 percent had ridden with a driver who had been drinking alcohol, 45 percent had drunk alcohol, 22 percent had used marijuana, and 17 percent had carried a weapon. During the 12 months preceding the survey, 33 percent of high school students had been in a physical fight, and 9 percent had attempted suicide.
Substantial morbidity and social problems among young persons also result from unintended pregnancies and sexually transmitted diseases, including HIV infection. Forty-seven percent of high school students reported having had sexual intercourse at some time in the past, and 37 percent of sexually active students had not used a condom during the last sexual intercourse.
Among adults over the age of 25 years, nearly two-thirds (63 percent) of all deaths result from two causes: cardiovascular diseases and cancer. The 2003 YRBSS data show that most of the risk behaviors that are associated with these two causes of death are initiated during adolescence. Twenty-two percent of high school students had smoked cigarettes during the 30 days preceding the survey, 78 percent had not eaten more than five servings a day of fruits and vegetables during the preceding week, 33 percent had participated in an insufficient amount of physical activity, and 14 percent were overweight.
YRBSS data are from a national school-based survey conducted by the Centers for Disease Control and Prevention (CDC) and from 50 state or local school-based surveys conducted by education and health agencies among students in grades nine through 12. The report is available on the CDC Web site at www.cdc.gov/healthyyouth/yrbs.
SAMHSA releases data on costs of substance abuse treatment: The average cost of treating an alcohol or drug use disorder in an outpatient facility in 2002 was estimated to be $1,433 per course of treatment, according to a new report from the Substance Abuse and Mental Health Services Administration (SAMHSA). Residential treatment for these disorders cost $3,840 per admission, and outpatient methadone treatment cost $7,415 per admission. On average an outpatient methadone treatment visit costs $17.78, and an outpatient nonmethadone treatment visit costs $26.72. For nonhospital residential treatment, the average cost per day was $76.13. For all types of treatment, personnel costs were the largest component—63 percent of nonhospital residential care, 65 percent of outpatient methadone treatment, and 79 percent of outpatient nonmethadone treatment. The report is based on data collected during site visits to 280 facilities that were chosen after a telephone survey of a nationally representative sample of 2,395 treatment facilities. The report is available on the SAMHSA Web site at www.samhsa.gov.