Is Utah the new Oregon?

August 19, 2005

This primary-care-only approach could make the Beehive State the new Medicaid model. Not everyone is convinced that's a good idea.

The doomsday scenarios centered first on Social Security, migrated to Medicare, and now focus on the nation's single largest health insurance program: Medicaid.

The state-federal partnership covers 53 million Americans, at an estimated combined cost of about $330 billion in 2005, according to a report prepared for the National Governors Association. (By comparison, Medicare's projected cost for this year is $327 billion, according to the Congressional Budget Office.) Between 2000 and 2004, Medicaid spending increased by more than 50 percent-the result of burgeoning enrollments and spiraling healthcare costs, with prescription drugs and hospital care topping the list of high-ticket expenditures. Cost increases hit state coffers especially hard during the recent recession, causing governors to scramble for ways to make ends meet.

And after flying under the Feds' radar screen for many years, Medicaid is now in the crosshairs of both the Bush administration and the GOP-led Congress. In May, the administration announced that-as part of the fiscal year budget resolution approved by Congress-it was establishing a Medicaid Commission, with both short- and long-term goals. Short-term, the commission has been asked to wrench $10 billion dollars in savings from Medicaid. Down the road, it must come up with ways to reform the program, in order to "ensure its long-term sustainability."

But not everyone is pleased. "They're institutionalizing a gradual degradation of the Medicaid program," says Judi Hilman, health policy director at Utah Issues, a poverty research and educational group, based in Salt Lake City.

Is the Utah model a harbinger of things to come for Medicaid? We took a closer look to find out.

Some coverage beats none at all, say supporters

In early 2002, Utah got the green light from Washington to implement the nation's first publicly funded primary care network (PCN), a reduced-benefit package aimed at previously uninsured parents and other adults with incomes between 50 and 150 percent of the federal poverty line. (Today, the income limit in Utah for a family of three is $24,135.) Residents previously insured under the Utah Medical Assistance Program-a 100 percent state-funded program that covered acute and life-threatening conditions for single, childless adults who don't qualify for Medicaid and have incomes below $337 per month-are also eligible for the program. Children from low-income families are covered under traditional Medicaid or the State Children's Insurance Health Program.

PCN enrollees are covered for:

Neither inpatient nor outpatient hospital care is covered. Specialty care-for providers other than FPs, GPs, IMs, ob/gyns, pediatricians, and nurse practitioners-isn't covered either. Instead, Utah hospitals agreed to donate up to $10 million in inpatient and specialty care to preauthorized PCN patients.

Most enrollees pay a $50 annual enrollment fee. They also pay a variety of copays, including $5 per physician visit, $30 per ED visit, and $5 for formulary prescriptions.