A bill that could help Delaware unlock $100 million more for the state’s beleaguered Medicaid program got a welcoming reception in committee Wednesday. Photo by Pixabay/Pexels.
Delaware hospitals have agreed to fork over a 3.58% tax on patient revenues so the state can qualify for another $100 million more in federal Medicaid funding.
The deal they agreed to will help expand Medicaid programs at a time whenstate officials have sounded alarms about the $2 billion — and rising — cost of healthcare to the state. It’s one-third of the Delaware’s annual budget.
Right now, $1 billion of that is Medicaid money, which largely aids poorer families with acute and long-term care, but also the elderly, disabled and some people with severe health problems or medical needs, regardless of their income.
The arrangement will see the state send some of the new federal money back to the hospitals in direct lump-sum payments, according to the agreement cut with Sen. Sarah McBride, D-Wilmington, head of the Senate Health Committee, and Rep. Kerri Evelyn Harris, D-Dover/Magnolia, head of the House Health Committee.
Senate Bill 13, dubbed the Protect Medicaid Act of 2024, would mark the largest ongoing infusion of funding in Delaware’s Medicaid program since the Affordable Care Act, which went into effect in 2010, McBride has said.
She detailed the provisions of the bill in Wednesday’s meeting of the Senate Health and Social Services Committee. Committee and public comments were enthusiastic, with the exception of some questions from Republican members.
The bill seemed destined to be passed on to the Senate, but Senate committees do not vote in public. They wait until members have signed the back of the bill and then post on the state website what the votes were. As of 5:30 p.m., those votes had not been posted.
Delaware’s Medicaid program now serves 1 in 3 people in Delaware, McBride said.
It pays for the care by using $2 from the state to match $3 from the federal government.
But the state has not been taking advantage of a federal program used by 46 other states, which required an assessment on hospitals to access more federal money.
The agreement essentially allows the state to borrow money from the hospitals to qualify for the additional federal money, McBride said.
The hospitals’ money will go into a new Medicaid special fund called the Hospital Quality and Health Equity Fund that the state will use to trigger the release of the federal matching funds.
The directed funds sent back to hospitals are designed to help the hospitals better serve Medicaid patients, which organizers hope will improve the health of Delawareans.
SB13 will require that the new money “isn’t just utilized to maintain the status quo of the Medicaid system, but rather is felt by patients here in Delaware,” McBride said.
It requires that any money not sent in directed payments be used to enhance current Medicaid programs and benefits or establish new benefits within Medicaid.
“So that could be increasing reimbursement rates. It could be expanding coverage to new populations. That could be expanding coverage for new forms of care that Medicaid doesn’t currently cover,” McBride said.
About 10% could be used for budget smoothing, a term lawmakers use for cash that helps out when times are lean or unusual demands are made on a program.
After the first year, the money should be used to maintain new benefits and could be used in other ways, McBride said.
The money would not be allowed to be shifted into another program — for example, filling potholes. It must stay in Medicaid.
The fiscal note with the bill estimates implementing the bill would cost the state $372,000 in the first year to modify Delaware’s revenue system to accommodate the money and programs and then $90,000 per year afterward for personnel and other costs.
Not all Medicaid money goes into doctor’s visits and medical procedures.
Some of it goes for home health care, and agencies that spoke during the meeting said they were thrilled that some cash may be available to pay their workers who help the disabled, medically fragile and elderly, particularly dementia patients.
Those workers haven’t had a raise in state contracts in 10 years and by January will be earning far less than minimum wage, the agency reps said.
