Governor’s budget proposal – lots of cuts and a plan to reform HUSKY HMOs

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In her budget proposal released yesterday, the Governor proposed shifting the current HUSKY HMOs away from capitation back to a non-risk arrangement. For a few months in early 2008, the Governor ordered a similar switch from capitation to an Administrative Services Organization (ASO)-model, in which the HMOs administered the program for DSS but passed all the medical bills onto the state. There is evidence that the state saved money under that non-risk arrangement. At the time, the HMOs were paid $18.18 per member per month (pmpm) for those services; a back of the envelope calculation suggests that the state expects to pay about $15 pmpm this time. Under PCCM, a new alternative to HUSKY HMOs, providers are paid only $7.50 pmpm for services that include care coordination. The 2008 switch resulted from advocacy efforts for transparency and accountability in the program. This year’s switch is prompted by cost pressures. An audit by the Comptroller last year found that HUSKY was overpaying the HMOs by $50 million/year. The Governor estimates that switching HUSKY to an ASO model will save the state $29 million next year.
Unfortunately, the Governor’s proposal also includes copays on Medicaid services, eliminating coverage for non-prescription drugs, vision services for adults, cuts to subsidies and increased premiums in the Charter Oak Health Plan, increased premiums and copays in HUSKY Part B, vision and transportation cuts to SAGA, and cuts HUSKY outreach. Those cuts total $53 million. None of these cuts is necessary; we have thirteen ways to save money in CT’s state budget that improve health.
Ellen Andrews