Revise Medicaid?

Model in Utah May Be Future for Medicaid
By KIRK JOHNSON and REED ABELSON

Published: February 24, 2005


SALT LAKE CITY - Anyone looking for clues as to how the Bush administration might overhaul the Medicaid system should come to Utah and read the fine print of Tony Martinez's health insurance plan.

Mr. Martinez, 56, was homeless and without any health coverage a year ago. Now, under an experimental plan of partial insurance devised under Michael O. Leavitt when he was governor of Utah, Mr. Martinez can see a doctor or go to the emergency room for only a small fee.


But he and his wife, Lisa, are not covered at all for the potentially catastrophic costs of extended hospitalization or specialty medical treatment, from dermatology to oncology. For those services, they must rely, as they did when they were homeless, on charity.

And that brings the story back to Mr. Leavitt, who as President Bush's new secretary of health and human services is now leading a drive to change how Medicaid works and often points to Utah as an illuminating example that other states might consider - although it is an innovation that policy experts, doctors and advocates for the poor are deeply ambivalent about.

In Utah, Mr. Leavitt's plan departs from the traditional Medicaid program on two main fronts. First, it spreads out a lower, more basic level of care to more people, and reduces coverage for some traditional beneficiaries by imposing co-payments for services. And second, it relies on the generosity of doctors and hospitals to provide specialty services free of charge.

In doing so, the state has in many ways reframed and reshaped the national debate over Medicaid and health care for the indigent, experts say, broadening the focus from the question of who does and does not have health insurance, to what constitutes basic health coverage.

Many academics and health care analysts say they also worry that substantial state-by-state Medicaid experiments could fracture and fragment a system that while never without its critics, has evolved into an anchor of health coverage for the poor since its introduction in the 1960's. Medicaid could create a landscape of winners and losers determined largely by whether they are lucky enough not to become seriously ill.

Mr. Martinez, for one, considers himself a winner. From no insurance, he now has some, and he considers that a victory. "We can go to sleep at night and not worry," Mr. Martinez said. "For me it's been great because I'm healthy and not on a lot of meds."

While Mr. Martinez sees the glass as half full, Wudeh Noba, a day care worker in the same Utah program, the Primary Care Network, sees the glass as half empty. The convoluted rules and co-payment schedules frighten her so much that she has ignored her doctor's advice to have a mammogram and find treatment for her migraine headaches because she is so worried about running up costs that she cannot afford on her $7-an-hour salary. Ms. Noba, a refugee from Senegal, might have insurance on paper, but she does not remotely receive the care her plan supposedly provides.

Part of what is driving the debate is cost. Medicaid, the combined federal-state program for low-income people, now costs more than $300 billion a year, with a growth rate that federal and state governments alike consider unsustainable. The Bush administration has proposed cutting $60 billion from the projected federal Medicaid spending of $2.8 trillion over the next decade and has said that states should be granted more flexibility.

Mr. Leavitt also seeks to address the problem of people without any insurance at all.

He has said in his recent speeches and in testimony before Congress that while no state will be the blueprint for the Medicaid overhaul, a main goal of the administration is to provide coverage for those now left out of the system, by spreading that coverage around and, perhaps, reducing benefits for some people now covered. Repeated requests to interview Mr. Leavitt were unsuccessful.

"Wouldn't it be better to provide health insurance to more people, rather than comprehensive care to a smaller group?" Mr. Leavitt asked in a speech this month. "Wouldn't it be better to give Chevies to everyone rather than Cadillacs to a few?"