Opinion Pieces Say Medicaid Cuts by Federal Government Will Greatly Harm California’s Safety Net
Two cuts in federal funding to California's health system announced by the Bush administration last week will further strain the state's 73 "safety net" hospitals, which are already "frayed by underfunding," according to a Los Angeles Times editorial. The first cut -- a $400 million reduction in the $17 billion the state receives for Medi-Cal spending -- is based on a formula that uses a state's per capita income, and thus is not a result of a "lack of love between Sacramento and Washington," as the Davis administration has said. But, the editorial states, the second cut -- the phasing out of the Medicaid loophole by 2010, which will result in the state receiving $300 million less in annual federal funds -- is "more overtly political and affects only the safety net hospitals." While CMS Administrator Tom Scully called the loophole -- under which states inflate their Medicaid expenses to public facilities and then receive additional matching funds -- the "single biggest scam in the history of the federal government," the editorial says that California's use of the loophole has "long been a legitimate tool to compensate underfunded hospitals." It concludes, "By all accounts, the state has put every penny of its extra cash into health care for poor people. California's punishment for the sleazy accounting of other states and for falling afoul of a thoughtless Medicaid spending formula will be greater misery for the poor -- and perhaps loss of lives" (Los Angeles Times, 11/3).
A San Francisco Chronicle editorial agrees with the Times' view of the closing of the loophole, saying that it is "economically shortsighted, if not inhumane, to rip holes in the nation's health-care 'safety net' for children and the poor in the depths of a recession." The editorial adds that the rule closing the loophole "punishes states indiscriminately, heaping an unfair burden on the hospitals that have been willing to treat the poor -- and potentially leaving many people without health care." The Chronicle concludes by commending the 48 of 52 Congress members from California who are "working to override the rule before it takes effect in February" (San Francisco Chronicle, 12/3).
Writing in a Los Angeles Times opinion piece, Gerald Levey and Harvey Kibel say that the $700 million in combined annual cuts resulting from the loophole closure and the formula adjustment for Medicaid funding levels "could devastate Los Angeles County's public and teaching hospitals." Levey, dean of the UCLA School of Medicine, and Kibel, chair of the public policy committee of the school's Board of Visitors, note that the formula for determining California's overall Medicaid reimbursement is based on the average income over the past three years of all state residents, and not on the number of low-income residents. They write that the $400 million cut is "based on a time when the economy was booming and per capita income rising," and that the "new level certainly will not reflect today's economic reality and the rising number of unemployed." They conclude, "The Hippocratic oath, which doctors swear to, reads in part: 'I will follow that regimen which, according to my ability and judgment, I consider for the benefit of my patients and abstain from whatever is deleterious and mischievous.' Washington should do no less" (Levey/Kibel, Los Angeles Times, 12/2).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.