June 11, 2003
The Honorable David M. Walker Dear Comptroller General Walker: As you know, Medicaid fulfills a key role in providing coverage to populations who otherwise would have difficulty obtaining health insurance. Serving low-income families with children and individuals who are aged, blind, or disabled, the program generally provides a broad package of benefits that includes not only preventive and acute care services but also services designed for chronic and long-term care needs, such as care in a nursing home. Many states’ Medicaid programs also cover long-term care services for persons with chronic illnesses or disabilities who are residing in the community, such as personal assistance with daily activities, and respite care, which provides relief to the beneficiary’s primary caregiver. In recent years, states have expanded eligibility for Medicaid coverage and – concurrent with the advent of the State Children’s Health Insurance Program (SCHIP) – facilitated program participation by simplifying program enrollment. Such efforts across the Nation to expand and facilitate entry into Medicaid and SCHIP programs likely contributed to reductions in the number of uninsured in 2001. Decreases in the numbers of uninsured, however, have been short-lived, and states are currently struggling to balance their budgets. Because states’ revenues are sensitive to the business cycle, Medicaid and SCHIP services have become particularly vulnerable to budget reductions during economic downturns, while enrollment in both programs generally increases as newly uninsured individuals look to Medicaid or SCHIP to provide health coverage that is otherwise not available. Based on the severity of states’ current fiscal constraints, some researchers estimate that as many as two million beneficiaries may be affected – either losing access to benefits or losing eligibility altogether. States may also look to beneficiary cost-sharing provisions as a means of reducing their Medicaid and SCHIP program spending. Cost-sharing for individuals covered by private insurance is a well-recognized strategy designed to constrain use of health care services by making consumers more aware of the costs of their care and more directly responsible for charges associated with obtaining care. For persons with limited disposable income, however, cost-sharing can inhibit access to necessary primary and preventive care – and place individuals at risk for a higher incidence of complicating illnesses and hospitalizations. Recent reports indicate that over 20 states reported that they planned or have already acted to implement Medicaid cost-sharing, and states are considering increases in cost-sharing requirements in SCHIP as well. To better understand the impact of Medicaid cost-sharing plans upon the individuals’ access to care, we request that GAO review states’ policies for cost-sharing in their Medicaid and SCHIP programs. In particular, please (1) evaluate how cost-sharing policies vary across different Medicaid and SCHIP programs, by eligibility group and income level, (2) assess the policies and experience of states and providers in collecting premiums, copayments and coinsurance from Medicaid and SCHIP beneficiaries, and (3) determine the extent to which states or the Centers for Medicare & Medicaid Services (CMS) have evaluated the implications of cost-sharing provisions on states’ cost-containment strategies or beneficiaries’ ability to access care. We also ask that your staff meet with Committee staff at a mutually agreeable date and time to further refine this request. Please have your staff contact Bridgett Taylor or Amy Hall, Committee on Energy and Commerce Democratic staff, at 202-226-3400 to arrange this meeting. Thank you for your attention to this matter. Sincerely,
HENRY A. WAXMAN SHERROD BROWN
cc: The Honorable W. J. "Billy" Tauzin, Chairman The Honorable Michael Bilirakis,
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