States Continue To Limit Medicaid Services, Benefits To Offset Budget Deficits
Many states are "turning to more dramatic means" to balance their Medicaid budgets, including limiting patient benefits and reducing eligibility, after having exhausted one-time funding mechanisms, according to a report released yesterday by the Kaiser Commission on Medicaid and the Uninsured, CongressDaily/AM reports (Rovner, CongressDaily/AM, 9/20). The report, titled "Medicaid Spending Growth: Results From a 2002 Survey," found that, faced with increasing prescription drug costs and rising beneficiary enrollment in part because of the declining economy, an "overwhelming majority of states are implementing Medicaid cost control strategies." Forty-five states took actions to limit Medicaid spending during fiscal year 2002, and 41 states said they plan to take similar actions in fiscal year 2003, the study, which was conducted by Health Management Associates, found. More specific findings from the 50-state survey include:
- Forty states plan to limit prescription drug spending through cost controls in FY 2003, compared with 32 states in FY 2002.
- Twenty-nine states reported they would reduce or freeze Medicaid provider rates in FY 2003, compared with 22 states in FY 2002.
- Fifteen states plan to reduce Medicaid benefits in FY 2003, compared with eight states in FY 2002.
- Eighteen states said they would restrict Medicaid eligibility in FY 2003, compared with eight states in FY 2002 (Smith et al., "Medicaid Spending Growth: Results From a 2002 Survey," September 2002). According to the report, three states made "deep cuts" in Medicaid eligibility standards for FY 2003, including Massachusetts, which removed 50,000 long-term unemployed adults from its program; Missouri, which cut 17,000 adults from Medicaid; and Nebraska, which cut 12,750 adults and 12,600 children from its program (Olson, Omaha World-Herald, 9/20).
- Fifteen states plan to increase copayments charged to beneficiaries for services other than prescription drugs in FY 2003, compared with four states in FY 2002 ("Medicaid Spending Growth: Results From a 2002 Survey," September 2002).
Vernon Smith, former Michigan Medicaid director and now a principal at Health Management Associates, said Medicaid eligibility reductions are usually a "bellwether of how severe a budget situation is," adding, "We're literally in a situation where states cannot sustain their Medicaid programs in their current form" (CongressDaily/AM, 9/20). The report is available online. Note: You must have Adobe Acrobat Reader to view the report.
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.