Kilili: Babauta’s figures on Medicaid awards outdated

U.S. Delegate Gregorio Kilili C. Sablan described as outdated and incorrect the figures presented Wednesday by Commonwealth Healthcare Corp. chief executive officer Juan N. Babauta on the Medicaid program.

He said the $5-million cap has already been removed by the federal government and the reimbursement ratio has been changed as well beginning this 2011.

The Medicaid program is a federal/state program administered by the states and funded by both the federal and states revenues through the 50-50 matching funds. Each year, federal cap is set at $5 million which requires an equal amount from the CNMI government. Any expenses in excess of $10 million is shouldered by the state.

Babauta said Wednesday that he wants this $5 million cap removed and the reimbursement rate be changed to as low as 75-25 matching rate to help the CNMI government address the increasing number of clients under the Medicaid program, which yearly has only $10 million (from federal and state) funds combined.

But according to Sablan, annual federal Medicaid grant to the CNMI is no longer capped at $5 million as what Babauta believes.

“Rather than being eligible for just $40 million for the eight years from 2011 to 2019, the Northern Marianas is now eligible for $140 million during that same period. The additional $100 million became fully available on July 1,” Sablan told Babauta in his letter dated Dec. 7.

“[I’m] sincerely hoping that [the] CNMI will use the money wisely and will spread its drawdowns over the eight years so [the] CNMI will not run short of Medicaid funds at the end,” he stated in the letter.

Sablan said in fact, the CNMI is expecting $18.233 million in total Medicaid grants in FY 2012.

The congressman also informed the CEO the history behind the changes in federal grants under the said program.

He said it was in 2009 when U.S. Congress increased the Medicaid grant to the Commonwealth by 30 percent to $6.474 million under the provision of Section 5001 of the American Recovery Reinvestment Act which, he said, was one of his first votes in Congress. Sablan told Babauta, a Republican, that every Republican voted against the said measure.

In 2010, the Medicaid grant was raised again through the section 1204 of the Health Care and Education Reconciliation Act, commonly known as Obamacare. Under this law, additional $100 million to the CNMI was provided from July 1, 2011 through Sept. 30, 2019.

He said as soon as this became law, the CNMI in fact, has quickly taken advantage of the new Obamacare money and drew down $8.1 million in the first three months it was available.

“And the Commonwealth has submitted its budget for FY 2012, projecting that in addition to the base amount of $5 million another $12 million of the Obamacare Medicaid funds will be used in the current year. On top of this $17 million, the NMI is also eligible for $861,000 from State Children’s Health Insurance Program (S-CHIP) and smaller amounts for information technology and administration. So the total federal Medicaid grant funds expected by the Commonwealth for FY 2012 is $18.233 million,” Sablan explained in his letter to Babauta.

Sablan also announced that the CNMI will also be eligible for another $9.5 million between 2014 and 2019 by virtue of Obamacare and these funds may be added to the Medicaid grant to help low-income persons, or, if the Commonwealth chooses to establish a health insurance exchange, the $9.5 million may be used to subsidize private health insurance premiums for the middle class.

On the reimbursement ratio of 50-50, Sablan said the federal-CNMI match for Medicaid grants has been changed to 55-45 ratio through section 2005 of the Patient Protection and Affordable Care Act. The 45 percent share for the CNMI, he said, saves the Commonwealth $7 million over the 2011 to 2019 period. Efforts to further lower the CNMI matching share, he said, will continue to be among his goals in Congress.