Medical spending

Thursday, May 24, 2007

It seems to me that the Missouri Legislature and Gov. Matt Blunt have achieved a three-year cumulative budget record that has been good for the state.

The just-passed fiscal year 2008 budget, which begins July 1, is a $21.4 billion operating budget that includes record amounts for education and health care as well as a tax cut for senior citizens. It also sets aside $200 million for a rainy-day fund.

The rainy-day fund and the following list of health-care allotments (among other items) could only be achieved by the first-year action of Governor Blunt's term which addressed the runaway medical costs that were taking over the Missouri budget. The new budget includes:

* $26.5 million increase to improve care delivered to seniors and disabled Missourians in nursing-home settings.

* $40.6 million increase to modernize the state's Medicaid payment system.

* $6.7 million increase to provide child care for working families who earn less than 127 percent of the federal poverty level. This funding ensures no qualified family will have to wait for child care.

* $5.7 million increase to provide additional placements through the Adoption Subsidy and Subsidized Guardianship programs, which provide permanent homes for abused and neglected children.

* $5 million increase for enhancing information technology at federally qualified health centers (FQHCs) by building an electronic health records system

* $3.3 million increase to contract with county prosecuting attorney's offices for the enforcement of obligations for delinquent child support payments from parents.

* $3.2 million increase to provide an increase in payments to service providers of residential care for abused and neglected children.

* $2.1 million increase to assist the state's child welfare program in achieving national accreditation.

* $6.4 billion total funding for Medicaid.

The Medicaid funding level reflects $886.5 million in new funding and includes:

* $94.9 million for rate increases in managed care, hospice, NEMT Premiums and Clawback.

* $69.9 million for increases in pharmacy needs.

* $19.7 million increase for durable medical equipment.

* $129.4 million for MO HealthNet.

The MO HealthNet funding includes:

* $52.9 million for physician-related rate increases.

* $20.2 million increase for medical care for employed disabled clients.

* $17.5 million to provide an annual health risk assessment for MO HealthNet recipients.

* $13.2 million increase to make health-care coverage affordable to lower-income Missourians.

* $7.8 million increase to expand health-care coverage for children through the State Children's Health Insurance Program (SCHIP).

* $2.9 million increase to fund pay-for-performance incentives to providers participating in the Chronic Care Improvement Program.

* $1.7 million increase to extend health-care benefits to foster children until their 21st birthday.

House Speaker Rod Jetton of Marble Hill, Mo., has 1 1/2 years remaining in his role as leader of the Missouri House in what has included a list of successes (along with the normal criticism that's followed every speaker in my memory, which comes from the media and opposition focus on his every action). More on this later.

In a letter to newspapers addressing criticism of his Social Security tax-cut legislation (which passed in a compromised version) he made the following observations:

"If it moves, tax it." That is how Ronald Reagan summed up government's approach to the economy and taxation. In 1984, the government found something that was moving but they hadn't taxed yet -- the retirement income of senior citizens. So they decided to tax that as well. But we're putting an end to those shenanigans once and for all.

"The government taxes our wages during our working years, telling us that it will be there for us as sustaining income when we retire. Then, when we retire and get the money that was supposedly being saved for us ... the government taxes it again as income. Only this time, we'll never get it back.

"The overwhelming majority of other states have ended this practice. In fact, coming into this session we were one of only 15 states that still taxed Social Security benefits as income.

"Now, the liberals and the media would like you to believe this is a small tax that only affects the very wealthy. That's just flat wrong. The state is taxing the Social Security benefits of more than 250,000 Missourians who are over the age of 65.

"If you are an individual senior making more than $25,000 per year, or a retired couple making more than $32,000 per year, you were subject to the tax. Now, the media and liberals say only the wealthy will benefit from this tax cut. I guess that means someone making $30,000 a year is 'wealthy.'

"Here's the other problem with those income guidelines, they aren't indexed to inflation. So, as benefits increase over time, more and more seniors become subjected to the tax.

"Thankfully, with some responsible spending and booming economy, Missouri is enjoying a budget surplus. Ending the Social Security benefits tax will only cost the state $100 Million.

"The simple fact is that this surplus money does not belong to the government. It belongs to the people. We need to find a way to get it back to the taxpayers who need it most. Ending taxes on retirement benefits does just that.

"Now, this doesn't mean we want to repeat the mistakes of liberal legislatures from the past and spend ourselves back into budget crisis. That's why we left $200 million in this year's budget unspent.

"Unfortunately, the final bill we ended up passing is not perfect. The only way we could get the state Senate to pass the bill was to agree to phase in the tax cut over 6 years instead of doing away with it completely here and now.

"At the end of the day, this proposal helps seniors by stopping state government from hijacking their rightful income. It's a proposal we can easily afford and it is simply the right thing to do.

"We know cutting taxes and controlling spending works for other states and the federal government, but opponents of tax cuts don't think it can work for Missouri. They were wrong about raising taxes, and they are wrong about cutting taxes."

Also passed this year was the authority given to the Missouri Higher Education Loan Authority (MOHELA) to provide $375 million in funding for new state-of-the-art learning centers for Missouri students. This includes completion of the promised state funding for Southeast Missouri State University's River Campus in Cape Girardeau.

MOHELA also has announced that it will reduce 9,300 freshman Pell Grant loans by $500 each for a total loan forgiveness cost of $4.6 million.

This year Governor Blunt recommended the state more than double funding for need-based scholarships to provide thousands of middle-class families access to scholarships every year. His proposal created the Access Missouri Scholarship to combine the state's two need-based scholarship programs into one new program called Access Missouri. The program offers a scholarship solution that will level the playing field for all applicants and ensure that Missouri's neediest students receive aid. Access Missouri will also make it easier for Missouri families to plan for college because the scholarship will be more predictable. Blunt's recommendation would provide a substantial increase in need- based scholarship funding taking the current program from $27.5 million to more than $72.5 million.

In addition, the governor has recommended $40 million in new funding for colleges and universities and a three-year plan that increases funding by more than $110 million.

Gary Rust is chairman of Rust Communications.

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