Tue July 31, 2012
The Future of Medicaid in Utah - Part 2: The Spenddown
Utah lawmakers will decide in their next legislative session whether or not to expand Medicaid under the guidelines outlined in the Affordable Care Act. Unlike Medicare, which is a federal program for the elderly, Medicaid is a partnership with states that provides a healthcare safety net for those in need.
But qualifying for Medicaid is not automatic. The income and eligibility requirements are complex and the state employs dozens of people to help make those determinations.
On a typical morning inside a brown brick office building near the Salt Lake City airport, dozens of staffers in the Utah Department of Workforce Services call center are talking to people applying for the many different Medicaid programs. Some are for pregnant mothers. Others are for people who need nursing home care, or for women who discover they have breast cancer after a routine screening.
About 34-percent of the people who apply are turned down for one reason or another, but call center manager Melissa Presley says that’s not their goal.
“We want to help people,” Presley tells KUER. “We want to get people services and we want to make sure people are taken care of. These staff out here don’t do these things for the money. They do it to help people. They have good hearts and they want to help people.”
It’s not always families in poverty who need the help. Sometimes, It’s those who’ve had catastrophic health problems or who’ve exceeded the lifetime coverage limits of their private insurance.
Bobbi Mathews lives in a large home in West Jordan, but it seems empty without her daughter Katie, who passed away two years ago at the age of 15. For most of her life, Katie needed round-the-clock care.
“She was born with DiGeorge Syndrome,” Bobbi explains. “She had a lot of costs. She had surgeries, home health, a lot of prescriptions, things like that. And when she reached the age of 9, she reached her cap on her medical insurance, which was two-and-a-half million. So then we were forced to seek other options.”
Those options included borrowing against their home and running up thousands of dollars in debt while they waited to qualify for a Medicaid program for children who depend on technologies such as oxygen to survive.
“They were really nice,” Bobbi says of the Medicaid eligibility workers. “They just said they were full and didn’t have an opening at the time. When they had one, [they] would just give us a call. In the meantime, were just scrambling to pay what we could ourselves. And then, after that two-year waiting period, there was an opening. And usually, it was because another child had passed away, which you don’t like to think about.
The Affordable Care Act eliminates the lifetime maximums on private health insurance. If the law had been in effect during Katie’s lifetime, the Mathews wouldn’t have needed any help from Medicaid. As it is, they’ll be paying off the money they borrowed for many years to come.
Other families make sacrifices just to qualify for Medicaid when their needs aren’t covered by private insurance.
Tammy and Dallyn Zundel of Orem have a daughter with another rare genetic disorder, eosinophilic gastroenteritis. Their private insurance refused to cover a special amino acid formula that is the only food Ashley can eat that doesn’t make her horribly sick. It costs about $1400 a month.
“Our church stepped in,” Tammy says, “and neighbors stepped in, even did fundraising for us, did a garage sale, did a bake sale.”
When that wasn’t enough, the Zundels sought help from Medicaid.
“It’s amazing, when they get the right, proper treatment,” Tammy continues, “how well their disease is managed. Which is what we weren’t getting from our insurance. We weren’t allowed to have that kind of effective, proven treatment, so we had to go find it, the coverage, elsewhere.”
That’s the good news. But the Zundels find themselves stuck in what’s called a “spenddown.” To qualify for Medicaid, they had to reduce their family income by about 20%. Her husband earns about $47,000 a year as an art instructor, supporting a family of five. The program’s income limits keep Tammy from getting a job. They have to be careful not to keep too much money in savings and they can’t have too much equity in the cars they drive. Their older children couldn’t have jobs while they were in high school without risking their family’s eligibility for Medicaid.
Grateful as she is for the help, Tammy also believes the spenddown is holding them all back.
“I don’t want to be forced to take jobs that depend on what the income is,” she says. “I feel like – my husband has a master’s degree and I’m working on a bachelor’s right now. And I would like to be able to know that we, as a family, can meet our financial potential and our personal potential without being dictated off of what eligibility is for Medicaid.”
Jason Cooke from the Utah Health Policy Project believes those spenddown requirements work against Medicaid clients who could otherwise do a better job of supporting themselves.
“Asset tests are inherently barriers to people getting into the system,” Cooke tells KUER. “When you look at the kinds of things that are asked, people have to have a car, for example, to get to work. Or don’t we want these people to work? Of course we do. They want to work for the most part. They want to be in jobs if they can find jobs.”
The Zundels might also benefit from the Affordable Care Act. It eliminates asset tests for Medicaid, and since it doesn’t allow insurance companies to deny coverage based on pre-existing conditions, it could allow them to shop around for a private insurance plan that covers the special formula Ashley needs to survive.
In addition to a decision on the expansion of Medicaid, the state of Utah is required to set minimum standards for health care coverage under the Affordable Care Act. That process is underway now in the legislature’s Health Care Reform Task Force, with a recommendation due on September 1st. Tammy Zundel has been actively lobbying to make sure those standards included the specialized diet her daughter needs. And what’s included in that basic health care plan could make a big difference in the future to the families who depend on Medicaid today.
Utah Health Policy Project website