Stephen outlines financial estimates for Medicaid plan

Health and Human Services Commissioner John Stephen has released long-awaited financial estimates for his controversial plan to reform Medicaid.

According to Stephen, during the next two years, his GraniteCare plan would save about $13 million in state money — 7 percent of the $180 million loss in federal Medicaid reimbursements that led him to study how best to overhaul the system.

But Stephen noted that by 2010, the savings would be $142 million in state dollars and an equal amount in federal spending that would be saved.

Based on Stephen’s forecast, the state over the next five years would make $200 million in investments to bring about these savings, which would include $94 million in new initiatives.

Stephen projects the reform would reduce the annual increase in spending on Medicaid from 11 percent to 8 percent.

Stephen has estimated the federal government could give the state as much as $50 million a year in the early years to implement these changes.

All of these changes would not require higher co-payments from those who now receive services or cut anyone off a program they are now on, Stephen stressed.

“We hope to dispel the notion that GraniteCare is built on service cuts or reductions in eligibility,” he said. “This plan is based on changing the way we deliver services to make the Medicaid program sustainable for years to come.”

Gov. John Lynch has yet to embrace the proposal. As a candidate he attacked the idea during the campaign, but afterward said he would take a look at whether the changes were feasible.

In November, the Legislative Fiscal Committee voted to give Stephen permission to negotiate with the Bush administration over the details of GraniteCare. Lynch and the Legislature must approve any proposals from those talks.

The proposal’s most controversial change would tighten up requirements to gain admission into nursing homes and thereby reduce the number of beds by 1,400 over the next five years.

By 2010, the number of seniors in nursing home beds would be 3,577. There are 4,850 living in nursing home beds now, and that number without reform would rise to 5,110 by 2010, Stephen said.

The number of seniors in the state’s home-based community care would double from 2,040 in 2005 to 4,827 in 2010, according to projections.

Stephen also wants to create a “single entry” network managed by the state for all residents who suffer from mental illness.

Giving families medical savings accounts would encourage them to make investments to prevent serious illness to children, Stephen said.

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