The grant Ìýis meant to encourage states, many of which are under pressure to cut Medicaid costs, to experiment with an uncertain approach to wellness: offering incentives for healthy behavior.

“Medicaid is almost the sweet spot for financial rewards,” said George Loewenstein, a behavioral economist at Carnegie Mellon University who has studied the effect of financial incentives on behavior. Medicaid recipients, he explains, are economically disadvantaged and have more to gain from incentives.

Loewenstein, however, is dubious about whether incentives, especially those tied to weight loss, could really work. He’s not alone.

Behavioral incentive programs have shown some promise in specific settings, but they are largely untested in the Medicaid population.

The federal dollars for Medicaid incentives reflect a sharpening emphasis on the role of preventive health in targeting the underlying causes of chronic disease, a central pillar of the Obama administration’s health care agenda. States have until May 2 to submit their final proposals to the Centers for Medicare & Medicaid Services for funding, and a number have indicated an interest.

And while states have some flexibility about how they design their incentives, federal guidelines provide a basic profile. Medicaid enrollees who demonstrate a commitment to improving their health will be eligible to receive financial rewards such as coupons or gift certificates. For those who are overweight or trying to quit smoking, that commitment might take the form of weight management classes or tobacco cessation counseling. States are encouraged to provide rewards “on a tiered basis” for attempts at participation, “actual behavior change,” and “achievement of health goals.”

Chronic conditions such as diabetes, bad cholesterol and high blood pressure account for more than 75 percent of the the U.S. spends annually on health care, according to from the Department of Health and Human Services. Cigarette smoking, 10 percent more prevalent among Medicaid enrollees than the population at large, Medicaid programs an average of $607 million in 2004, according to the National Center for Health Statistics, and is also the leading preventable cause of death in the U.S.

States Have Mixed Results

To date, a few states have tried transplanting the corporate wellness model to Medicaid, with mixed results. State health officials seem to agree that participation from health care providers and other community organizations, often a challenge, was critical in making their programs work.

, which provides an enhanced coverage plan with added benefits to Medicaid enrollees who agree to adhere to healthy behaviors, has been widely criticized by health advocates.

Idaho, which launched an incentive program in 2007, offers $200 in vouchers to Medicaid enrollees who consult with a doctor about losing weight or quitting smoking. Recipients can use the vouchers for gym memberships, weight management programs, nutrition counseling and tobacco cessation products. Tobacco counseling courses are offered free of charge through public health districts in the state. Idaho is now enrolling about 1,500 new Medicaid participants each year.

According to Tom Kearns, who manages Idaho’s Preventive Health Assistance initiative, participants have written in with positive feedback – but the state doesn’t have data to show whether the incentives are cost-effective or have a large-scale impact on participants’ behavior.

“There’s a lot of challenges in tracking the outcomes of this long-term,” Kearns said. “Ultimately we’d like to have a large enough population to track.”

The state has worked hard to find partners who are willing to accept its vouchers and so far has more luck with community groups, such as the YMCA, than private companies.

Florida has also tried using incentives in its Medicaid managed care pilot program.

The program allows Medicaid enrollees living in five counties to earn up to $125 worth of credits each fiscal year in exchange for their compliance with certain “healthy behaviors,” like getting a flu shot or adhering to a prescribed drug regimen. Participants can redeem the credits at participating pharmacies for over-the-counter products such as bandages and diapers.

But logistical setbacks have dampened the impact of the incentives. At first, few were aware that the program even existed, and some pharmacies refused to accept the Medicaid credits. Several hundred people have received credits for participating in a diabetes or hypertension disease management program since 2006, but as of February, only two individuals were on the record for having attended a smoking cessation course, and six individuals have been credited for entering a weight management or exercise program.

“There’s a question about whether this is really incentivizing anything … that link is very dubious,” said Greg Mellowe, policy director at the consumer advocacy group Florida CHAIN. Most of the credits distributed through Florida’s rewards program in the past five years, Mellowe contends, were awarded for routine visits and immunizations that Medicaid recipients would have sought anyway – and not for significant behavioral changes.

Research On Incentives Is Inconclusive

Research is scant on the effects of incentive programs on mitigating chronic diseases. A smattering of studies have shown that complex behavioral programs with built-in incentives can sometimes produce short-term results-if the incentives are large enough. A 2009 published in the New England Journal of Medicine found that a program offering people $750 to quit smoking: 15 percent of participants eligible for a reward managed to quit, compared with 5 percent of participants who enrolled in a traditional tobacco cessation program.

A similar about incentive-based weight loss programs, published by some of the same researchers in the Journal of the American Medical Association, was less optimistic. That study found that financial rewards did help participants lose more weight temporarily, but the losses weren’t fully sustained in the end.

Few behavioral studies have attempted to determine whether people who receive the incentives are able to maintain their short-term success long term – the ultimate goal of incentive-based prevention program. Fewer attempts have been made to address how the design of an incentive program should be adjusted according to the demographics of the target population, such as insuring that low-income participants have transportation to get to appointments and classes.

“In and of itself, without health education and other forms of engagement, it seems to fall short,” said Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities. “The incentives are never going to be enormous because it’s never going to be affordable.”

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The Commonwealth survey also found that more than 40 percent of the respondents said that high costs had compelled them to forgo the care they needed-up from 29 percent in 2001.Ìý

Karen Davis, president of Commonwealth, a N.Y.-based foundation that advocates for health care access, said the trends will ease with the implementation of the new health law, which is set to mark its first anniversary next week amid Republican efforts to choke off federal funding.

The Commonwealth report, she says, “tells the story of a continuing deterioration of health care accessibility, efficiency, security and affordability over the past decade.”

The fund conducts the national survey on health insurance every two years, and this poll of more than 3,000 working age adults reflects the recent recession that threw millions of Americans out of work. For many of them, unemployment also meant the end of employer-provided health insurance.

Nearly a quarter of respondents said they or their spouses had experienced a job loss in the past two years. Among those who lost their health benefits along with their jobs, 57 percent reported they could not get new insurance. A quarter of those losing jobs and health benefits said they were able to get coverage through their spouse or some other method and about 14 percent turned to , which allows workers to continue their insurance for 18 months after losing their job. Usually the worker has to pay the entire cost of the program, but as part of the federal stimulus package, the government subsidized part of that cost for most workers. But enrollment in that program ended last May.

The Commonwealth Fund survey comes on the heels of two Gallup polls released earlier this month. OneÌýreported an overallÌýÌýin employer-based health care, the other notedÌýa rise inÌý in almost everyÌýstate. The analysis with the state poll suggested that the new health law could “fill the voids in care” created by state budget problems and rising unemployment rates. ButÌýsuch relief wouldn’t come until after 2014, whenÌýthe law will extend Medicaid coverage to anyone whose income falls withinÌý133 percent of the federal poverty level, and the federal government will subsidize part of the cost of private coverage for families earning up to 399 percent of the poverty level.

The health law will also standardize the benefits that health insurers offer in plans they sell on the individual and small group markets, bringing them in line with the benefits available to those offered by large employers; and prohibit insurers from denying coverage because of an individual’s medical history.

“It eliminates some of the unpleasant surprises in the fine print in insurance policies,” Davis said.

But conservative groups like the Heritage Foundation, a D.C.-based think tank, have criticized the health law. The foundation has called for Ìýin the health care system to make it less reliant on government and to have individuals “own and control their own health care policies.” They also say the health law will increase government spending.

“Of course there’s some people who will benefit from the law, but just focusing on individuals with benefits is misleading,” said Brian Blase, a policy analyst in health studies at Heritage. “You have to look at the law in its totality.”

Contact Aimee Miles at amiles@kff.org

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Photo by David McNew/Getty Images

Last month, the Republican-led House passed a spending bill that slashes funds for family planning clinics and eliminates federal support for Planned Parenthood, a major provider of reproductive health care in the United States. Senate Democrats have since offered up their own spending bill, one that would restore the family planning funding, but the full Senate failed to pass either measure in votes Wednesday. Negotiations between the House and Senate are expected to continue. The current short-term funding measure expires March 18.

“Nobody is saying that Planned Parenthood cannot continue to be the largest abortion provider in America, but why do millions of pro-life taxpayers have to pay for it?” Rep. Mike Pence, R-Ind., one of the leaders of the effort to strip such funding from the bill, said in a floor speech during the House debate last month.

Planned Parenthood has launched a fierce public relations campaign against the measure, backed by progressive Democrats who have vowed to fight the GOP.

“It’s just amazing that the Republican leadership is anti-choice and on the other hand, anti-family planning,” Rep. Barbara Lee, D-Calif., said at a press conference on the issue. She added, “This is a war on women.”

What Is Title X?

Title X (ten) of the Public Service Act is a federal signed into law by President Richard Nixon in 1970. According to the , a New York-based reproductive health research center, the law had broad bipartisan support and was the result of increasing concerns that low-income women were not able to get access to family planning services and had higher rates of unwanted pregnancies than more affluent women.

Title X grants, which are administered through state health departments or regional agencies, support family planning programs in 4,500 clinics serving 5 million individuals across the country. The funds, which totaled $317 million last year, are used to provide a range of reproductive health and family planning services primarily to low-income individuals. The program is run by the Department of Health and Human Services and provides funding for contraceptive counseling and supplies, STD testing, breast and cervical cancer screenings, vasectomies, hypertension and blood pressure measurement, prenatal care and sex education.

While Title X is the only federal program dedicated exclusively to reproductive health care, it isn’t the only source of public funding for family planning services, or even the largest. About 12 percent of the $1.85 billion in public funds spent on family planning services in 2006 came from Title X, according to Guttmacher. The biggest chunk of funds-71 percent-came from Medicaid, a joint federal-state health program for low-income individuals and families. The remainder was funded through various federal block grants and state appropriations.

What Are Republicans Proposing?

Several measures offered by Republicans are part of the House budget bill, which was approved on a strict party vote on Feb. 19.

All Title X funding is eliminated in the massive spending bill that sets budget levels for the remainder of the fiscal year, which ends Sept. 30. That “continuing resolution,” H.R. 1, seeks to trim billions of dollars from discretionary funding in the federal budget.

The House also approved an amendment offered by Pence to the spending bill that cuts all forms of federal funding for Planned Parenthood, which operates a network of more than 800 family planning clinics nationwide. Planned Parenthood receives roughly $360 million in federal assistance annually through Medicaid, Maternal and Child Health block grants and other sources.

The GOP’s plans to cut Title X and to defund Planned Parenthood are at odds with President Barack Obama’s priorities-the president requested $372 million for family planning in his FY 2012 budget.

Does This Affect Abortion Coverage?

Current law prohibits health care providers from using federal money to finance abortions. But the law doesn’t bar Title X grantees from using other funds to cover abortion-related care, so long as they keep those funds segregated from federal grant money.

Before introducing his amendment to the spending bill, Pence had also introduced H.R. 217, known as the “Title X Abortion Provider Prohibition Act,” which would prevent health centers that offer abortion services from receiving future Title X family planning grants (exceptions would be made in cases of rape, incest or a threat to the mother’s health). The bill has been effectively tabled pending the vote on the overall spending continuous resolution, which, if enacted, would eliminate the need for H.R. 217.

Several other dealing with abortion funding have also been introduced.

What Do Family Planning Supporters Say Is At Stake?

Reproductive health advocates such as Families USA, Planned Parenthood and NARAL Pro-Choice America argue that eliminating or restricting access to Title X money would cut off vital financial support for health centers that are providing care at steeply discounted rates for low-income patients. According to Adam Sonfield, a senior public policy associate at the Guttmacher Institute, Title X money gives clinics the flexibility to invest in things like outreach and infrastructure-something Medicaid payments don’t account for. The institute also estimates that the contraceptive services offered at Title X centers prevent 973,000 unintended pregnancies each year.

Planned Parenthood says six in 10 family planning centers in the U.S. receive Title X funds, which account for 24 percent of their revenues. Planned Parenthood is the largest single recipient of Title X money, securing about a quarter of the total allocated to health centers each year.

According to Karen Rowley, who oversees several Planned Parenthood-affiliated health centers in California’s Fresno area, clinics are already turning away patients because of the overwhelming demand for services. Losing all federal funding would further exacerbate the problem.

“Many of our patients would go without medical care, not only reproductive healthcare but for primary care needs,” Rowley said.

The national organization has painted a picture that is even more dire-63 percent of its health centers would be at risk for shutting down altogether if H.R. 1 passes, the group says.

What Do Critics Say About Cutting Planned Parenthood’s Federal Funds?

The Heritage Foundation, a conservative think tank based in D.C., presents a different view.

Chuck Donovan, a senior research fellow at the foundation, says Planned Parenthood has significant income beyond federal funding, citing a 2010 GAO indicating the organization’s income was $388 million between 2002 and 2007. “They can afford to join in the belt-tightening that is happening all across the country,” he said.

As for the other health centers that would be affected by Title X cuts, Donovan said that supporting family planning through tax rebates or vouchers, rather than a categorical funding program with an established mandate, would be a better option.

“Our preference is to fund health care through things that give individuals choice,” he said.

Pence has acknowledged that health centers use Title X money to perform valuable services that he supports, but he contends that the funds are also being used to support abortions indirectly by covering operating costs and other related expenses for Planned Parenthood and other abortion providers.

“Eliminating Title X funding has never been my goal,” he said on the House floor. “My focus has and will remain on denying taxpayer dollars to Planned Parenthood or any organization that provides or promotes abortion as a means of birth control.”

This is an updated version of an article that first ran Feb. 18.

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As part of the stimulus, the federal government pumped extra money into state Medicaid programs, which grew during the economic downturn. But that special assistance is slated to run out at the end of June, and provisions of the new health law have limited states’ ability to cut enrollees. The governors, who are assembling in Washington this weekend for the National Governors Association annual , areÌýpressing for much more latitudeÌýin running Medicaid.

Kaiser Health News reporters Jessica Marcy and Aimee Miles surveyed some governors to ask, “If you were given flexibility from Washington to redesign your state’s Medicaid program, what would you do?” (Some answers have been edited for space and clarity.)

Arizona Gov. Jan Brewer, Republican

Brewer

I believe a sustainable, flexible and manageable Medicaid program is critical to Arizona’s fiscal stability. Arizona is a national leader in Medicaid innovation and continues to pursue every option available to improve the program’s efficiency and effectiveness, without sacrificing core state government functions such as education and public safety.

In addition to efforts to manage the number of people enrolling in the program, it is necessary to implement common sense benefit reforms, such as the elimination of taxi rides for visits to the doctor and the institution of fees for missed appointments. These “reforms” have long been a reality in the commercial market, and Medicaid should take lessons from private sector successes. Finally, payment reforms and a continued focus on integrating and coordinating care will ensure the program is operating as efficiently and effectively as possible. By working with elected officials, health care providers and patients, we can institute reforms that protect taxpayers while safeguarding Medicaid as the safety net originally intended.

Arkansas Gov. Mike Beebe, Democrat

Beebe

Arkansas wants to use its unique national position to redefine how we pay for Medicaid. The current system of fee-for-service is unsustainable, and the continued rapid growth in Medicaid costs threatens to hit our state budget hard in the near future. However, unlike most of the country, Arkansas is not facing budget shortfalls and is not making rate cuts, eliminating services or trying to reduce the number of citizens eligible for Medicaid assistance.

This puts Arkansas in prime position to step out front and try something new. The present Medicaid structure pays providers for undertaking as many tests and procedures as possible, with no consideration of treatment outcomes. We want to create partnerships across the public and private sectors of the health-care system to craft a new payment-and-reimbursement model that encompasses Medicaid, Medicare and private health insurance. This system will focus more strongly on outcomes and will incentivize providers to help people get better.

Arkansas is the right size and in the right financial position to pursue a statewide program that can start us down the road toward a health-care system that produces better results for patients at lower costs for everyone, while still ensuring reasonable compensation for providers.

Georgia Gov. Nathan Deal, Republican

Deal

The current healthcare law has states locked in, with no flexibility to decide what is best for each of their residents. The best avenue to ensure Medicaid is efficient, accountable and sustainable for Georgians is flexibility. However, what changes we would implement if given the flexibility would be largely dependent upon the state budget. There are several options Georgia may explore if this requirement was lifted, though nothing specific has been discussed.?

Ìý

Kansas Gov. Sam Brownback, Republican

ÌýBrownback

I have asked Lt. Gov. Jeff Colyer, a doctor, to head my administration’s efforts to reform Medicaid in the state of Kansas. He is leading a working group that includes the cabinet members and elected officials involved in Medicaid delivery in our state.

We are asking stakeholders and citizens to submit pilot projects and reform ideas based on three criteria — improving quality of care of Kansans receiving Medicaid; controlling costs of the program; and long-lasting reforms of health care that improve the quality of health and wellness of Kansans.

Everything is on the table. Our efforts are focused on choice, competition, affordability and accountability. These principles will guide us as we try to remake a 45-year-old program comport more efficiently with today’s needs. Key to our success will be having the flexibility to reform the state’s entire system of Medicaid to improve quality at lower cost.

Kentucky Gov. Steve Beshear, Democrat

ÌýBeshear

In Kentucky, we strongly believe that using public-private partnerships to implement innovative cost saving measures and improve health outcomes will transform our state’s program. Organizing the health care delivery system to improve care and outcomes in particular holds a great deal of promise for improved savings and service.

We are investigating strategies used by other states to manage health care costs, and we will implement programs based on those results. Among the programs we are looking at are:

• Performance-based managed care programs for all people eligible for Medicaid in the commonwealth.

• Pay-for-performance physician and primary care provider incentive plans.

• Performance-based managed care dental programs for children.

• Performance-based pharmacy capitation programs.

• A long-term care coordination program for institutional and community-based care.

• Increased cooperation and collaboration with the United States Attorneys to bring the full arsenal of enforcement actions to bear on significant instances of fraud and abuse.

These innovations are in addition to steps we have already taken to control costs in Medicaid. These previous steps include reducing unnecessary use of medical services, treatments and ER visits, stopping payments to hospitals for hospital-acquired infections and errors, more aggressively identifying fraud and abuse and increasing efforts to collect payments for Medicaid services from liable third parties. Kentucky is also eliminating the ability of some patients to “doctor shop” to obtain unnecessary drugs.

New Jersey Gov. Chris Christie, Republican

Christie

(from a Feb. 22 to the legislature suggested by his office)

To make room for (budget) priorities, we must reform Medicaid. … We propose to move our aged, blind, and disabled recipients into modern managed care, and move their pharmacy benefit to modern managed care as well – saving a total of $41 million while still providing vital services. … We must do these things, not only to fill the hole created by the loss of over a billion dollars of federal stimulus money since 2010, but because it is the right thing to do. Medicaid’s growth is out of control. We must manage it better. Even with $250 million of Medicaid savings in this budget, and additional projected savings from a $300 million global waiver to reform Medicaid, spending will grow by nearly $1 billion over last year. That is the definition of an out-of-control program. Worse yet, we cannot make meaningful reforms because of the restrictions on New Jersey from Obamacare. States desperately need relief from that unfunded federal mandate.

Oregon Gov. John Kitzhaber, Democrat

Kitzhaber

The economy has left Oregon — like many states — with a serious Medicaid budget shortfall.

But we have made a commitment to ensure that none of the 600,000 people in the Oregon Health Plan (the state’s Medicaid program) will be dropped from health care in order to balance the budget.

To meet that commitment, Oregon has embarked on a unique effort to bring coordinated, patient-centered care to our statewide delivery system. We are so serious about it that I have put the estimated second-year savings from the effort — someÌý$290 million — into my proposed budget for the legislature. To make it happen, stakeholders from every part of the health-care and long-term-care system are involved in crafting a plan to achieve those savings.

Here are some of the principles the group is following:

• Local coordination of all benefits, including physical health, mental health and addiction services, oral health and long-term care services.

• Coordination of social supports that promote health and keep people out of high cost medical care.

• Include Oregonians who are eligible for both Medicaid and Medicare. Blend funding to create more efficient use of resources, care management and aligned incentives.

• Set budgets at levels that are sustainable, affordable and sufficient for best-practices; establish incentives for prevention efforts, and lower costs.

• Build on best practices in local communities in which health entities partner with each other and consumers, and are accountable for improved health.

Oregon has a reputation for innovation when it comes to health care and I believe that the budget crisis has created an opportunity for our state that we cannot afford to waste.

Texas Gov. Rick Perry, Republican

Perry

Whether through a waiver or a block grant, Texas would be better served by a system that is tailored to the unique needs of Texans rather than the one-size-fits-all system currently in place. We need a system that provides for a more market-based health care delivery model that emphasizes individuals sharing in their health care decisions and responsibilities, and eliminates fragmentation and duplication.

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His much anticipated lays out a strategy that leaves a number of key details-including how to pay for the system-open for debate.

Vermont Gov. Peter Shumlin

Under Shumlin’s “single-payer” system, Vermont residents would receive health benefits paid for by the state, regardless of their employment status or income. The plan is designed to help stem rising health costs, which state officials say have become unsustainable.

“Health care costs are climbing at a rate of more than 12 times the growth of the Vermont economy, and we’re not getting the best value for our money,” Shumlin said in a prepared statement. “The time for change has come.”

Former Vermont governor Howard Dean, who unsuccessfully sought to institute a single-payer system in 1994, praised the effort.

“It makes a lot of sense and it’ll save them a ton of money,” he said in an interview.

Some Democrats advocated for a national single-payer plan when Congress was debating the federal health overhaul that passed in March, but that plan was never considered politically viable because of widespread opposition and concerns about cost. Even efforts to offer a public option insurance plan that would compete against private insurers for consumers’ business failed after conservative Democratic senators refused to support it. Instead, the health law opted for tighter regulation of existing private plans, with a mandate that almost every American purchase health insurance.

Skeptics have questioned whether Shumlin’s reform agenda is feasible.Ìý Lt. Gov. Phil Scott, a Republican, said before Shumlin’s bill was released that he had received letters from a number of state residents who have concerns.

“They’ve heard about the bill and they’ve heard the thoughts, but the devil’s in the details, and they’d like to see what it means to them,” Scott said.

The governor’s plan calls for creation of a health reform board this year to make recommendations for the plan. A full single-payer plan would not be operational before 2014.

Shumlin, a Democrat, has garnered some support for a health overhaul in the legislature, where Democrats overwhelmingly control both houses. The legislature had already commissioned Harvard economist William Hsiao, who helped design Taiwan’s single-payer system, along with MIT economist Jonathan Gruber and Vermont policy consultant Steve Kappel to provide recommendations on how to reform Vermont’s health care system. Shumlin’s plan takes many of those recommendations into account.

But Republicans in the state have raised concerns and business groups have not yet signed on.Ìý The state also will need to clear a series of administrative hurdles at the federal level.

The Need For Waivers

Shumlin’s strategy seeks to take advantage of federal resources that will kick in under the new health law in 2014. By that time, every state is expected to have its own “health exchange,” an online marketplace where consumers can shop for private health plans that meet new federal standards. Shumlin’s proposal involves using federal funding to build an exchange infrastructure that could later be converted to support the single-payer system.

But because a single-payer plan is not sanctioned in the health law, Vermont would also need to secure waivers from the federal government in order to move forward with its plans.

“At each step of the way, we may be dealing with constraints as far as federal law, and march forward,” said Anya Rader Wallack, Shumlin’s special assistant on health care reform.

The federal health law allows states such as Vermont to request waivers to opt out of many of its requirements starting in 2017, so long as they present an alternative that would achieve the same goals-broader health coverage for more people-with equal or greater success.

But Vermont legislators, fearing that support could shift against single-payer during the next election cycle, don’t want to wait another six years to deliver their reforms. They’re hoping they’ll be able to opt out of the health care law sooner.Ìý

That puts Vermont in a delicate position: for now, at least, the state will need to work out a plan to comply with the federal health law while simultaneously laying the groundwork for its own plan.Ìý To make matters more complicated, Vermont officials would also have to work with federal officials to make critical payment adjustments within Medicare, the federal health program for seniors and disabled individuals.Ìý

Funding Is An Open Question

The governor’s team has not yet devised a way to pay for the new system. They plan to return to the legislature in 2013 with proposals, according to Wallack.

Hsiao and colleagues had earlier recommended that the state levy a payroll tax divided between employers and employees-an idea that raised alarm bells with small business owners.

Among them is Scott, who also owns a construction company. “I understand some of the arguments for this type of system [were] to take the burden off employers and I guess I’m not seeing where that burden is being moved,” Scott said.

Rick Rayfield, who owns a bookstore in Waitsfield, is tentatively in favor of a single-payer system-but wants to see how the legislature hammers out key details.

“It seems to me we’re trying to develop a philosophy about who pays for healthcare without asking ourselves exactly what we’re willing to pay for,” he said.Ìý “We’re being asked if a single-payer system is something we would like without saying what we’re going get for it.”

Still, Rayfield sees some advantages. “I guess I’m so overwhelmed by the stupid complexity of the (current) system as it is that I just adore the simplicity of the single-payer plan,” he said.

Supporters of the change say the need is dire. They point to statistics showing that health spending more than doubled in Vermont between 1992 and 2009. Shumlin’s office has estimated the state would save $500 million in the first year of a single-payer plan.

That would come from reduced insurance marketing and administrative costs. Hospitals and physicians also lose time and money in filling out claims information for every private health plan they bill.

Shumlin’s plan recommends paying physicians and hospitals in a way that encourages them to provide higher quality care without providing unnecessary services.

“There’s a lot of smart things the governor’s doing,” Dean said. “The smartest thing of all is that he’s saying, ‘We’re not going to come up with funding mechanism until we change the payment system.'”

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Courtney Burke

New York’s newly-elected Democratic governor, Andrew Cuomo, is making headlines with his plan to trim New York’s $53 billion Medicaid program – one of the most generous in the country – by importing a . He’s tapped Wisconsin’s former Medicaid director, , to lead New York’s Medicaid reform agenda. But that agenda is already attracting criticism from patient advocates, who claim Cuomo has given the state’s health care union and hospital lobby too much control in leading his Medicaid Redesign Team.

Kaiser Health News reporter Aimee Miles talks to Courtney Burke, who directs the New York State Health Policy Research Center at the Rockefeller Institute, about Cuomo’s plans for revamping the system. This is an edited version of her responses.

Listen to audio

Q: In his , Gov. Cuomo highlighted Medicaid as a major driver of New York’s budget crisis, and he pointed out that the spending increases in the program are nearly double the rate of inflation. He also noted that New York spends more on Medicaid than any other state, but ranks 21st in terms of results. What’s going on here?

A: I think what’s happening in New York is happening in a lot of other states across the country. They are seeing an increase in their Medicaid enrollments because the economy is down. At the same time, because the economy is down, they’ve seen a decrease in their revenues. When they look at how they can better manage state finances, one of the largest areas that they find is the Medicaid program. And in New York, the Medicaid program is a particularly large part of the budget. It’s about when you look at all funds, and it’s a significantly large program in terms of total expenditures. It’s estimated at about $53 billion this upcoming fiscal year. So it is a pretty big target when you’re looking at how you control spending and costs within the state.

Q: Patient advocates are frustrated over Cuomo’s decision to put representatives of New York’s health care union and hospital lobby in charge of the new task force charged with finding ways to cut Medicaid spending. The Cuomo administration says that working with health industry players is more likely to win over lawmakers and move things forward, but consumer groups have accused Cuomo of letting special interests run the show. Can giving industry stakeholders this kind of control yield positive results?

A: Using an approach that involves providers that are affected by the cuts, I think is important. It is also very important to have the input of patients, because they are ultimately the ones that are affected by changes in the program. But using a process such as the one that New York is using – that models the Wisconsin approach by having the providers recommend where cuts should be made – [gives providers] a more vested interest in actually carrying out those cuts and participating in a more constructive way rather than a confrontational way. That being said, I know that the task force, the Medicaid Redesign Team as it’s called here, has added patient groups, the main one being a group called Medicaid Matters, that represent sort of a range of different constituencies – most notably consumers who use the Medicaid program.

Q: Cuomo cited New York’s Department of Health as a bloated bureaucracy. To what extent would consolidation of the department bring palpable improvements in cost and efficiency?

A: I think when Cuomo talked about the issue of a number of government agencies, he wasn’t just talking about the Department of Health. He was talking about the different agencies that deal with health issues. It is a fairly disparate system where you have the Department of Health, which is the primary entity responsible for the Medicaid program, but then you also have a state office for aging, an office for persons with developmental disabilities, and an office for alcohol and substance abuse services, and an office of mental health. I think he’s interested in seeing if there are ways that those offices can work together more efficiently and effectively to make services better for the people who are receiving them through these different agencies.

Q: In his State of the State address, Cuomo highlighted government consolidation and a pro-business approach as the pillars of his strategy for addressing New York’s $10 billion deficit – but didn’t outline an explicit plan of action. When it comes to reining in health care spending, what are the key details the administration still needs to address?

A. New York’s health care system overall is different than other state’s. We have a lot of academic medical centers in the state and we therefore serve as a place where a lot of doctors are trained and then they move elsewhere. There’s also a lot of innovation and medical research happening in New York. And it does make the overall health care economy different than it might be if you looked at a different state.

Also, there’s been a lot of attention focused on the Medicaid redesign team and a lot of what they’re doing is supposed to focus on how you can change Medicaid rates to drive more efficiency and better quality within the health care system, and that certainly is very important. As they say financing drives form in health care, so you really do have to look at what you’re paying for. But I think there probably are other things that would create a more business friendly environment in the state, but [Cuomo] did not outline them specifically during the State of the State.

Personally, I think that having more local health planning is an important part of making sure that communities can come together, because health care really is local in many senses. I’d be interested to see if they come out with some more details about how they might foster that in New York. They may look at trying to provide some regulatory and mandate relief to businesses as well. But of course this is just conjecture.

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Most Americans favor the idea of closing the federal deficit through spending cuts-but they are also loath to choke off funding for some of the nation’s costliest entitlement programs —Ìýincluding Medicare (56 percent oppose) and Social Security (64 percent oppose), according to a Ìýreleased by the researchers Tuesday.ÌýÌýMedicare and Social Security account for a third of all federal spending.

A finding that nearly half of Americans-47 percent-oppose cuts to Medicaid, the public health insurance program for low-income families, came as a surprise, said Drew Altman,Ìýpresident and CEO of the Kaiser Family Foundation. The Medicaid program has become a major point of contention for states opposed to its expansion under the federal health care law, and a number of states have cited Medicaid as a principle cause of their budget problems.

“While we have always believed that Social Security and Medicare [are popular], the standing of the Medicaid program with the public is actually very high,” Altman said.

To make matters more complicated, half of Americans now oppose the health care law, but most aren’t as enthusiastic about repealing, replacing or defunding it as GOP leaders are.

Researchers cited a lack of clear public consensus on federal spending, coupled with deeply partisan divides over the new health care law, as key findings.

The survey was completed in early January, just weeks prior to a vote by House Republicans to repeal the health law, a largely symbolic vote that fell along partisan lines. Public opposition of the health care law has swelled since December-half of Americans now oppose it, up from 41 percent. The survey also shows that the American public is almost as evenly divided about how Congress should proceed next-47 percent favor expanding the health law or keeping it the way it is now, while 43 percent favor repealing or repealing and replacing it with some other alternative.

Those results are hardly unexpected and haven’t fluctuated much since the health care law was passed last March, according to Altman.

“In the bigger picture, given how stable public opinion on health reform has been I would not expect big changes in public opinion from any strategy,” Altman said.

“What will change things is the actual rollout of the law that will be the real test.”

Researchers also found that most Americans-62 percent-still oppose defunding the law, as Republicans in Congress have vowed to do.

“The public is really fed up with the contentious political environment that’s happening and they want government to function,” said Mollyann Brodie, director of KFF’s public opinion and survey research. “They may simply be saying that defunding the law is not the way government should work.”Ìý (note: KHN is a program of the foundation.)

In the months ahead, growing public aversion to “politics as usual” may signal a change in the tone of the health care debate. How politicians frame key issues of public interest-from reductions in federal spending to consumer protections in health insurance-will be key, said Robert Blendon, professor of health policy and political analysis at the Harvard School of Public Health.

Certain provisions of the health care law continue to carry public support-79 percent of Americans favor subsidies for low-income individuals to buy health insurance, and 85 percent support discounts on drugs in the Medicare doughnut hole, for example. Democrats will be challenged to convince a risk-averse public that the health care law’s key provisions will be beneficial in the long run, while Republicans may focus on the importance of economic austerity in balancing the budget and creating new jobs, according to Blendon.

“I think we’re going to see a shift from complete assault on health care to shifting the debate around reducing the deficit and spending,” he said.

In order to have any effect, Blendon added, that debate will need to focus on individual costs and benefits.

“We have to get back to real people’s lives not, ‘should we take 80 billion or 100 billion,'” he said.

Blendon and Altman said it is likely that neither Republicans nor Democrats will give ground on the health care law before the next presidential election in 2012. By then, many, but not all, of the health law’s provisions will have gone into effect, and the public may be in a better position to judge its true effects, they say.

“Who’s going to control the presidency and Congress?” said Blendon.

“I think there’s not a middle ground until that election is resolved.”

The telephone survey of 1,502 adults has a margin of sampling error of 3 percentage points.

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Public support for the mandate is shaky. Some Democratic senators –- such as Claire McCaskill of Missouri and Ben Nelson of Nebraska — have signaled a willingness to consider an alternative to the mandate.

Democratic pollster Celinda Lake says Democrats should just let the individual mandate go. “It’s not our issue,” she told KHN, adding that it should be left to the insurance companies “to make the argument for why they need it.”

Kaiser Health News reporters spoke with health policy experts about possible alternatives to the individual mandate, which also faces mounting legal challenges with 26 states joining in lawsuits opposing it. Is it time for Democrats to revisit this provision, and perhaps develop alternatives to it? If so, what mechanism could be used instead?

Edited excerpts of these conversations follow.

Ìý

Judy Feder, professor at the Georgetown Public Policy Institute and senior fellow at the Center for American Progress, a public policy think tank in Washington:

The requirement (that almost everyone have health insurance) is key to getting participation from the healthy as well as those more likely to be sick, people with preexisting conditions. That actually makes insurance effective in spreading risk so that we have people who are not sick helping people who are sick. That’s what insurance is about. So the mandate is really quite critical to making insurance work and that’s why it’s part of the law. That says to me that fighting for it is the right thing to do.

I’m not ready to go to alternatives. Others have talked about open enrollment periods that occur periodically, and then penalties or denied coverage for periods of time if people don’t enroll. Those mechanisms can encourage participation but I am skeptical based on analysis that they are as effective in assuring participation.

Medicare has a penalty for late enrollment, and you could imagine doing something like that for eligibility for insurance here. But think about if — as I’ve seen some propose — you’re not eligible to get any care or any subsidized care, what does that really mean? Would we deny care? Or does it mean a continued subsidy with people responsible for other people? It’s a very problematic approach.

Ìý

Robert Laszewski, a long-time health insurance industry executive and consultant and president of Health Policy and Strategy Associates:

I think the Democrats would be smart to get rid of the individual mandate. It is by far the most unpopular part of the bill, and they would do well to replace it with something else.

One provision of the individual mandate would exempt people if insurance on the exchange costs more than 8 percent of their income. This would exempt most people in the middle class, other than people who get coverage from their employers. This mandate is not terribly effective toward its stated goal of maintaining the integrity of the health insurance market.

The mandate doesn’t work politically, it may not work constitutionally, and it doesn’t maintain the integrity of the market.

There are a number of things you can do with scheduled open enrollments and increasing premiums for people who don’t purchase right away. We should let anybody buy health insurance, any time they want — but if they don’t buy it at the first enrollment, there should be a significant waiting period for preexisting conditions. So if you don’t buy insurance right away, you can’t expect to have your preexisting condition covered.

Ìý

Paul B. Ginsburg, president of the Center for Studying Health System Change, a health policy research organization based in Washington:

As far as the political discussion goes, I would say that in this moment in time, Republicans don’t seem to be very interested in searching for compromise, so I don’t think that this would be the time for Democrats to come out and propose an alternative to the individual mandate. After the repeal votes, then perhaps an environment might come up for compromise. Replacing the mandate with another policy that will accomplish the same thing would be a concession the Democrats could make to preserve the important parts of reform. My concern is that there’s going to be an inclination, whether it’s a mandate or an alternative to a mandate, of not making it strong enough and thus not succeeding in creating a viable insurance market for individuals where there’s guaranteed issue.

From a strictly policy perspective, the mission here is to get healthy people into the risk pools within the exchanges as well as sick people — that’s the reason why some type of incentives or coercion is needed. Having a mandate is not the only way to do it. There are other ways. Politicians are likely to err on the side of not being forceful enough to meet the requirements of a market where there’s guaranteed issue. Most analysts believe that our current individual mandate is too weak to carry out its mission.

One (possible incentive) would be (to have) an initial period to enroll in insurance without (assessing their medical conditions). If you don’t enroll then, then you would, say, face two years’ exclusion of coverage for preexisting conditions. In other words, (it would be a mechanism) to get away from people’s ability to just sign up anytime to get health insurance, because that’s not viable.

Another possibility would be — for all those people who have incomes less than 400 percent of poverty — to reduce those subsidies for those who do not enroll right away. There’s precedent for this in the Medicare program. For those people who are eligible for Part B but do not enroll when they do not have a reason not to, if they decide to enroll later on they pay a higher premium for the rest of their lives.

Ìý

Tom Miller, resident fellow at the American Enterprise Institute, a conservative public policy research center:

(Considering alternatives is) a necessary strategy for desperate incumbents with bad poll numbers trying to seek reelection. For the administration, they will hold onto the individual mandate because they actually believe in it.

Sometimes the argument is made that we can’t do all these things in insurance regulation and coverage without forcing people to buy insurance. You should back up a step and say if we have to force people to do something, maybe we shouldn’t be doing it. But, they never want to acknowledge that part.

An alternative is to provide a positive incentive to people to want to buy insurance and stay covered, and reward them for it. So they think of it as not a penalty for being late, but as a benefit for doing the right thing in a responsible manner and you get these enhanced protections. That’s using incentives in a voluntary and private market place.

Ìý

Kavita Patel, a health policy expert and former Obama White House adviser:

I don’t think (altering the provision is) an effective strategy, and I do think the administration should wait for the courts. I can tell you that leading up to the passage (of the health law), a lot of people in the administration took a long look at the (Constitution’s) Commerce Clause (which has been cited by opponents of the individual mandate) and what would be legal.

I think for the health policy implications, it’s important to remember what the individual mandate means. It’s the only way to make sure that everyone is on a level playing field, so we don’t have to roll back the preexisting condition ban. The things that are great about the (health law) are not just in silos, they have to be connected, and the individual mandate is the one thing that holds them together.

At the very least, (if the Democrats choose to revisit the individual mandate) we’d have to talk about implications for having just a children’s mandate or some kind of mandate for (people who retire before they are eligible for Medicare), which would have to be paired with some way to extend (them) Medicare benefits.

Ìý

Dr. Jonathan Oberlander, professor of Health Policy and Management at the University of North Carolina at Chapel Hill:

(Democrats) are, in the short term, wedded to the individual mandate, for better or worse. I’m not sure that any of the alternatives have been discussed so far are very compelling and so if you don’t have very compelling alternatives, then you’re stuck with the policy that you brought to the dance-and that’s the individual mandate. The big point is this: I don’t think the Democrats want the debate to be about the individual mandate. If (it) is and that’s the central focus, they’ve got a problem because that is the least popular provision of the new law.

We have to step back and ask what the purpose of the individual mandate is, and it’s really to induce healthier Americans to sign up for health insurance, and if we don’t have that, we’re going have some very unstable risk pools that could potentially jeopardize the stability of the exchanges. It’s hard to induce people to sign up for health care coverage without a penalty. Asking nicely is not enough. So if you’re talking about alternatives, most of the alternatives that are going to have any effectiveness are going be other forms of penalty.

Ìý

Mark Pauly, health care economist at the Wharton School of Business at the University of Pennsylvania who helped develop the concept of an individual mandate while serving as an adviser to President George H.W. Bush:

There are two purposes of the individual mandate — one that I agree with and one that I don’t. The one I agree with is its intention to close the gap with people who are relatively high income. The reason that I think is troubling is to prop up the community rating with no preexisting exclusion because if people can wait until they get sick, then obviously that will collapse. That’s not a good way to protect high risk people.

I would prefer to have a mandate to mop up for the well-off uninsured, but I think in the short run we could make a lot of progress with the generous subsidies that are aimed at bringing in the great bulk of the uninsured. Then, we could see where we are and then we could talk about an individual mandate to round up the stragglers. I’d prefer to have one to be safe, but if people are going to get themselves all up in an uproar, then why don’t we use the effective tool – subsidies – first and see if we really need it.

The individual mandate has become this enormous distraction which could run the risk of sinking the whole ship. If you had to throw it overboard to save subsidies and exchanges, I would sure throw it overboard myself.

(Penalties could work as an alternative if they were) bad enough or strict enough. But then you run the risk of what if people don’t respond to the penalty, then they’re out and uninsured. My preferred solution would be to have a really attractive high risk pool and be done with it. After all, most people are not high risk. Plus, this is guaranteed renewability so they never get themselves in that pickle.

Ìý

Robert D. Reischauer, president of the Urban Institute:

The Democrats should stick with the policy that they and virtually every health care expert have said is the most effective way to cover the uninsured while holding down the growth of costs. All the other policies are distant second bests. I don’t think there is an alternative strategy especially if the government is fiscally constrained. If you had money to throw at the problem, then you could bribe people to participate but we don’t have the resources nor should they devote resources to something that can be effectively done through a regulation enforced with penalties.

Ìý

Kaiser Health News reporter Jenny Gold contributed to this article.

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That’s according to a released today by the Kaiser Family Foundation (KFF), which tracks trends in enrollment procedures, eligibility rules and cost-sharing practices in Medicaid programs, the joint federal-state health coverage for low-income people. (KHN is a project of the KFF.)

“Unlike other insurers, Medicaid is designed to expand its reach in difficult times,” said Cindy Mann, who directs the Center for Medicaid, CHIP andÌýSurvey & Certification within the federal Centers for Medicare & Medicaid Services (CMS). Mann called the findings of the KFF report “heartening.”

Job losses prompted by the continuing economic recession last year swelled the ranks of the country’s uninsured — estimated at 50 million in 2009 — as a growing number of families turned to Medicaid and the Children’s Health Insurance Program (CHIP) for health coverage. Were it not for extra federal funds provided as part of the stimulus package in 2009, many cash-strapped states would have slashed coverage in 2010, according to the report.

Instead, only two states-Arizona and New Jersey-did so, leveraging exceptions in the policies designed by the federal government to prevent coverage reductions. Other states sought to keep costs down without narrowing eligibility rules–by eliminating benefits, raising premiums, or increasing copayments. Those changes were “modest” overall, according to the foundation’s report.

In addition, 13 states made Medicaid coverage available to a wider segment of the population, and six states used federal funding from the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) to fund coverage for lawfully residing immigrant children or pregnant women.

Oregon expanded income eligibility for children from 200 percent to 300 percent of the federal poverty level, and now allows families above that limit to buy into the program at full cost. Colorado also expanded eligibility for children, pregnant women and parents last year under its own Healthcare Affordability Act.

“There was huge pent-up demand and unmet need among parents of our low-income children,” said Joan Henneberry, echoing a key finding of the Kaiser Family Foundation report. Henneberry, who is the executive director of Colorado’s Department of Health Care Policy and Financing, said most of the new entrants into the state’s newly expanded Medicaid program were adults.

But in most other states, health coverage for parents and childless, non-disabled adults was marginal or nonexistent last year, the KFF report found. Childless adults make up 60 percent of the uninsured population, while those with children account for 24 percent, according to the foundation. The remaining 17 percent are uninsured children.

“Access to care for parents does not come close to matching that of children, and for non-disabled adults it lags even further behind,” said Tricia Brooks, a senior fellow at the Georgetown University Health Policy Institute Center for Children and Families and a co-author of the report.

Parents in a family of three making $18,310 per year-100 percent of the federal poverty level-didn’t qualify for coverage in 33 states last year, the study found. As of January 2011, only six states and the District of Columbia provided Medicaid benefits to adults without dependent children.

Under the federal health overhaul law, Medicaid eligibility will be extended to adults who earn up to 133 percent of the federal poverty level-with an option for individual states to expand eligibility if they choose to. Unless states decide to expand their current Medicaid coverage rules, most adults will have to wait until 2014, when most of the health law’s provisions kick in, to find affordable health coverage.

Under the federal stimulus act, states received a temporary boost in the share of Medicaid costs covered by the federal government. As a condition of receiving the funds, states were locked into a “maintenance of effort” requirement-prohibiting them from making their Medicaid programs’ eligibility rules or enrollment procedures any stricter than they were as of July 2008.

Those terms will end when states stop receiving stimulus funds in June, but similar provisions in the new health law will take their place.

Several state officials have called those requirements excessive. Last week, 33 governors sent letters to federal leaders criticizing the maintenance of effort provisions, saying they “prevent states from managing their Medicaid programs for their unique Medicaid populations.”

The governors are requesting that federal leaders remove the restrictions immediately-but state Medicaid officials and health care advocates fear that move would pave the way for states to reverse the coverage improvements they’ve made thus far.

“If the protections for Medicaid and CHIP are dismantled, the success we’ve achieved in covering a record 90 percent of children will be very much at risk,” Brooks said. Instead, she said, governors “should request that extra financial help for Medicaid be extended.”

This is one of KHN’s “Short Takes” – brief items in the news. For the latest from KHN, check out our News section.

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The poll, conducted between Dec. 1 and Dec. 6, shows that roughly 42 percent of Americans say they are at least somewhat favorable to the new health care law, while 41 percent say the opposite. Those numbers haven’t changed much since April, when 46 percent of Americans described themselves as “very favorable” or “somewhat favorable” toward the law and 40 percent said they felt somewhat or very unfavorably.

Within that division, however, are subtle demographic shifts in partisanship. While seniors continue to be more averse to the new health law than younger Americans, the December poll shows the percentage of people 65 and older who harbor a “generally unfavorable” opinion of the health law is lower than at any point since the law’s passage, at 40 percent.

According to Mollyann Brodie, who led the polling effort, the 16 point drop in the percentage of unfavorable seniors since April is notable, but it’s unclear why they’ve softened their opposition in recent months.

She speculated that the interest in other news events may play a role. “Now we’re hearing about deficit reductions and [other] impacts on Medicare. It’s just a change in the agenda of what people are discussing these days,” Brodie said.

“I think it’s important to know you’re not talking about a monolithic group-seniors who identify as Democrats tend to like the law, and those who identify as Republicans tend not to like it.”

Confusion about the law persists, according to the survey. While 66 percent of Americans report they understand how the Affordable Care Act will affect their family, 41 percent of those who stand to benefit the most from the law – uninsured Americans under age 65 – say they don’t understand how the law might affect them, compared with 26 percent of the insured. Members of households making less than $40,000 per year were also twice as likely as those from wealthier households to report that they didn’t understand the impact of the law on themselves.

Americans most frequently cite newspapers, radio, online news, and cable news as their primary source of information on the Affordable Care Act, but the foundation’s latest survey suggests that trend may change, with health insurers and employers playing a larger role in informing the public.

Kaiser’s poll shows that one in four Americans want to repeal parts of the law, while another one in four favors repealing the law in its entirety. But the survey’s authors noted that in previous months even those in favor of complete repeal have shown favor for some of the law’s more popular provisions, such as the requirement that insurers sell policies to individuals with preexisting health conditions.

The poll also found that one in five respondents want to leave the law as it is and the same number want to expand it.

The Kaiser poll of 1,207 adults has a margin of error of plus or minus 3 percentage points. (KHN is a project of the Kaiser Family Foundation.)

Meanwhile, another Ìýby ABC News and The Washington Post paints a slightly different picture, suggesting that 52 percent of Americans oppose the health care law. It found that of those seeking repeal, 30 percent favor partial repeal, and 29 percent favor a complete repeal.

That poll also revealed that trends in for or against the law fell sharply along ideological lines-with 86 percent of Republicans, 47 percent of independents, and 27 percent of Democrats reporting opposition to the law. The Post-ABC News poll of 1,001 adults has a margin of error of 3.5 percentage points.

The release of the two polls coincide with a court ruling today by U.S. District Judge Henry Hudson of Richmond, Virginia, against the constitutionality of one of the law’s key provisions; the mandate that almost every American purchase insurance. Pitted against conflicting rulings from two other judges, the decision paves the way for what is likely to culminate in a final ruling by the Supreme Court.

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