October 1995

PlusCare Rescued from the Minus Column

by Martin Ackley, Consultant for Health Policy

A 1990 Michigan gubernatorial candidate characterized Wayne County’s unique health care program for the indigent, now called PlusCare, as "a model for the country." PlusCare provides managed health care for poor people who are not eligible for Medicaid. It was the first program of its kind in the nation.

When he was in the Michigan Senate, this same gubernatorial candidate—John Engler—helped create CountyCare, PlusCare’s predecessor, which enabled spending for indigent health care in Wayne County to be cut by more than $14 million while continuing to serve 54,000 people. As governor, however, Mr. Engler has twice attempted to eliminate state funding for the county program.

Both times the program has wrenched itself free from the budget-cutting axe. In 1992 a compromise produced a new PlusCare program in Wayne County, which lowered state funding for it from $42 million to $7.5 million and leveraged federal Medicaid matching dollars to help make up the difference. Most recently (three weeks ago), after the governor, by vetoing a $7-million General Fund (GF) appropriation, underscored his unwillingness to have any state GF money contributed to the program, PlusCare rallied sufficient legislative support to garner $4 million.

To Wayne County officials, the summer veto of the already-pared-down GF appropriation for the program was an attack on PlusCare and the people it serves. To the Engler administration, it was a move to pursue a financial strategy that would net the state an increase of $16 million and still maintain the PlusCare program.

"The administration had no interest in ending PlusCare," said Michigan Medicaid Director Vern Smith. "It’s an important program that’s doing a fine job.

"The executive recommendation removed the $7 million from the program so it could be financed entirely by county and federal funding and make available to the state the use of a [technical financing scheme] that would have resulted in $16 million of net GF profit to the state. The final agreement of $4 million just diminished the opportunity for the state to earn funds."

Pitching with a Full Count

The PlusCare program has three sources of funding: federal, county, and state. Last year, the $51.5 million program had $29 million in federal revenue, $15.5 million from Wayne County, and $7 million from the state. Wayne County reported that 42,000 people were enrolled in the program, but state Medicaid officials saw evidence of only 33,000. At an annual cost of $1,000 per person, the $35 million (reflecting only federal and county funding) presented in the governor’s budget recommendations "looked like enough to run the program," according to Smith.

Medicaid, however, was counting only people who had enrolled in the PlusCare program through the Michigan Department of Social Services (MDSS) offices. Not being counted were several thousand enrolled through the Wayne County Patient Care Management offices.

"At one time, [PlusCare] had around 58,000 enrolled," said Patti Kukula, director of Wayne County Patient Care Management. "That dropped to around 43,000 in 1991, after the cut in GA [General Assistance]. Those people [who were cut] are still out there, but they don’t want to come in [to the MDSS office] and sign up for PlusCare. Before, they came in to get their GA check and while they were there they would sign up."

Wayne County Patient Care Management is aggressively reaching out to find eligible persons not enrolled in PlusCare. Workers are posted in the emergency rooms of Harper-Grace, Detroit Receiving, and St. John hospitals every Friday and Saturday from 4:00 P.M. to midnight, signing up uninsured, non-Medicaid eligible patients. Some 40 applications are filed each weekend; usually, about 20 of the applicants actually qualify.

"We go to them," Kukula said, in describing why their enrollment is growing, "We have a two-page form, compared to the 28-page Medicaid form, and we have a four-day turnaround [from application to eligibility decision], as opposed to 45 days for Medicaid. In some cases, we can get people qualified the same day.

"We’re trying to keep health care costs down. These are the people in emergency rooms who have nonemergency problems and are clogging up the system. By diverting people into primary care, we’re making a dent in the number of uncompensated ER visits in area trauma centers." Wayne County officials estimate that PlusCare spares area hospitals approximately $20 million of uncompensated care. Without the program, emergency rooms would be flooded with more than 8,000 visits by indigent persons each month.

PlusCare contracts with three health maintenance organizations in Wayne County (Health Source, Master Care, and Total Health Care) to provide primary health care, emergency care, prescription drugs, chemotherapy and radiation treatments, dental extractions and dentures, and, every two years, eyeglasses. Forty hospitals and some 1,200 health professionals participate.

The PlusCare program was established in Wayne County in lieu of the state-run State Medical Program for indigent people that operates in the other 82 counties and provides only basic ambulatory care. Prior to PlusCare, the state’s share of funding for indigent health care in Wayne County was nearly $43 million a year.

Whereas the Medicaid program costs around $148 per month per recipient, the PlusCare program costs $83 per month. The average PlusCare recipient is an African-American male about 35 years old, who is a Detroit resident and a former GA recipient. The number of women enrolled has increased from 10 percent three years ago to around 20 percent today.

Nothing to Fear but Federal Block Grants

PlusCare has been saved for at least one more year, with the help of legislators who either (1) don’t want to see thousands of poor people denied medical care or (2) don’t want to see area emergency rooms teeming with unpaying customers.

And what of the future? "My biggest fear is [MDSS] gets block grants and they eliminate us," Kukula said.

Although the shape of federal Medicaid block grants still is being forged and hammered out by Congress, their reality seems all but certain. The only question remaining is the form they will take.

A straight Medicaid block grant will provide a flat amount for each state to spend on health care for the poor, and it will be unencumbered by the federal restrictions and regulations that accompany the current program. There will be few or no requirements on who gets covered, what services they will receive, or what each state must spend. In short, states will be able to create their own Medicaid program, free of federal intervention.

Also being discussed is a capped entitlement block grant much like the current Medicaid system, wherein the federal government matches state funding. Michigan currently covers 43 percent of Medicaid funding and the feds 57 percent, with no limit on the total spent. Under the capped entitlement proposal, the feds will cover no less than 60 percent of state spending, but there will be an upper limit on the amount of federal Medicaid dollars reimbursed to each state.

A capped entitlement program would exert a lot of pressure on a state’s Medicaid program planning. Although the feds would be reimbursing a larger percentage of the program costs, every dollar spent over the cap would have to come from the state GF.

Smith said it is uncertain whether block grants will threaten the PlusCare program, but he indicates that if there were straight block grants, with few mandates and restrictions, funding for PlusCare could be on the table.

"Clearly, what we need to do is look at what we’re spending [on Medicaid programs]," he added. "It all goes back to the value of PlusCare, and nobody in the administration is saying PlusCare is not a good program."