Colleagues,

Do you believe that legislative intent is required for an
appropriation to be spent?
Do you believe that legislators should discuss how a
$233,000,000 program should be designed?

Today, Debra Scott, Director of DSS told our Approps
Committee that the Insure Missouri program in phase I is an
entitlement, which means that because a new "state plan
amendment" has been agreed upon with the federal government,
Missouri is now obligated to provide services under that
agreement to all who qualify and sign up. That amendment
will take effect March 14.

In 2007, in HB 11, we appropriated just over $13,000,000
"For the purpose of funding the insurance premium offset
program or a program that will promote private health
insurance coverage for certain low-income employees."

But the department has created the "Insure Missouri" program
based on that appropriation, and plans to spend $51,500,000
on it THIS YEAR ('08), by using the "supplemental pool".

NEXT YEAR, and EVERY YEAR THEREAFTER, the program in just
phase I alone will cost an estimated $233,000,000 to cover
the same people who sign up THIS YEAR. Of that, $46,000,000
or so will be general revenue.

UNLESS WE OBTAIN A NEW PLAN AMENDMENT, WE MUST COVER THESE
SERVICES, EVEN IF WE APPROPRIATE ZERO FOR THE PROGRAM.

Surprised? Do you think there was legislative intent for
this to happen when you voted for that $13,000,000 budget
item?
Did you get a chance to discuss the details of who would be
covered and what services would be delivered under this
entitlement program?

If you would, re-read above the "purpose clause" of the
appropriation--notice the words "certain low-income
employees"?

Debra Scott said that Insure Missouri will cover the
non-working spouses of the low-income working parents
eligible. The rules the department filed are based upon
"family income", not "personal income". Those non-working
spouses are NOT 'employees', which is what HB 11 said above.

Also, re-read the clause above, and notice the words
"promote private health insurance coverage". Do you really
believe that the Title XIX Medicaid benefits given under our
state plan amendment are "private health insurance coverage"
just because the managed care company hired to provide them
is a private company? I don't think so.

Insure Missouri also does much more than "promote"--it
actually provides insurance.

In the appropriation is the following sentence:
"Initially, the department may pursue coverage for adults
with incomes at or below 100 percent FPL." Notice that it
is for "adults", not just "adults with children" which is
what Insure Missouri will cover in phase I. Can they do
that (just cover parents when the words say "adults"?) Does
doing so put the state at risk for a lawsuit? Also please
note that it says "with incomes", again requiring that the
person work. But non-working spouses do not have incomes.
Does that put the state at risk for a lawsuit?

Why am I pointing all this out?

Because THERE WAS NEVER ANY LEGISLATIVE INTENT FOR INSURE
MISSOURI IN THIS APPROPRIATION IN HB 11! The Department is
torturing words in claiming that HB 11 was so intended.
Even the budget chair has told me he had no idea HB 11 was
intended to be used in this way. Further, no legislator
ever had a chance to discuss the particulars of this
program.

For example, a working parent earning 99% of the FPL will
get free health care. But a disabled person at 99% FPL with
unearned income will get nothing at all. I would never have
voted for that because in my mind disabled people, the most
vulnerable in our society, should be at the top of the help
list, certainly above able-bodied adults.

But a disabled person at 100% of the FPL must spend 15% of
his or her income in order to get help. (Note the
Department has said that no person should spend more than 5%
of income for health insurance.)

Did you get an opportunity to discuss such program details
and features? Would you have voted to cover working parents
but not the elderly / disabled between 85% and 100% of the
FPL?

The department has said that Insure Missouri moves spending
from the "back end" to the "front end". But in phase I, NO
DSH PAYMENTS ARE USED. There is no recapture of the
"cost-shift" of uncompensated care. Keep in mind that the
MO HealthNet program will cost whatever the needs of all its
recipients are for a given year, no more, no less. And the
State will use a certain amount of FRA dollars to draw down
federal money in order to pay for that care, whether or not
any is also spent on Insure Missouri. There is no diversion
away from what hospitals will get under phase I. It is not
true that these FRA dollars spent on Insure Missouri are
dollars that would be spent anyway on the program--they are
new dollars. This means that:

INSURE MISSOURI IS A GIANT WINDFALL FOR MISSOURI HOSPITALS.
Hospitals will be paid their usual DSH payments for the
uncompensated care they provide, and since those payments
are based on cost reports of three years prior, there will
be no change in those DSH payments for the first three
years. Not only will they be paid for the care they have
been providing for free, now insurance companies will be
paying them for hospital care under the new Insure Missouri
program! The hospitals will get the biggest slice of the
$233,000,000 tax-payer funded pie. Is it any wonder the MHA
supports Insure Missouri?

If you read the RFP that went to the insurance companies,
you will note that FQHC's will be paid their usual rate, but
that THE STATE WILL MAKE UP THE DIFFERENCE BETWEEN THAT AND
THEIR COST. Is it any wonder that the Missouri Primary Care
Association supports Insure Missouri?

Today, Director Scott said that the emergency rules they
filed last week would go into effect on March 14. The rules
set out how eligibility is determined. But, she said,
potential enrollees would be signed up beginning in
February, BEFORE THE RULES ARE IN PLACE. These people will
be told they will have benefits even before the rules are in
force. I asked what would happen if the rules were rejected
by JCAR based upon the argument that there was no statutory
authority for them (there isn't), or that they exceed such
authority cited (they do). The answer was that those people
who were put on the program would be taken off, but would
need to be given up to a year of "transitional Medicaid
benefits". Don't you think the rules that define how
eligibility is determined should be in force before
eligibility is determined?

I asked what would happen if we did not appropriate any
money for the program for '09. The answer was that were
that to happen, the department would seek a new state plan
amendment, but that while such application was pending, the
state would have to provide benefits, then transitional
Medicaid benefits for up to a year. I asked when the
department would ask for such a new plan amendment in such a
case, and was told that it would not do so until the budget
was finally passed without such funding in it. That, of
course, would be in May, and since a new state plan
amendment can take 90 days, the state would have to fund the
program during that time, and then provide transitional
benefits.

If you believe that the legislature should protect its
constitutional role and duty to control the state's purse
strings...
If you believe that quarter-billion-dollar-a-year programs
should be discussed by the legislature BEFORE being
enacted...
If you believe it important to insist that there be
legislative intent before an appropriation can be spent...

Then...

Please join me in expressing: Severe displeasure with the
way Insure Missouri was rolled out and developed...
That there was no legislative intent for the program rolled
out...
That the department be urged not to rush through rules
without discussion...
And that the program not be implemented until it can be
fully discussed by the legislature.

Whether you agree with me or not, please make your opinions
known. I would be happy to discuss this with any of my
colleagues.

Sincerely,

Rob Schaaf