States Cutting Optional Medicaid Benefits, Increasing Beneficiary Cost-Sharing to Reduce Expenses
The Los Angeles Times today looks at how states, facing tight budgets and soaring health costs, are cutting back on their Medicaid programs. Many states are moving to scale back optional Medicaid services -- those not mandated by federal Medicaid law -- such as prescription drug and catastrophic coverage, while increasing beneficiary cost-sharing. The cutbacks come as state lawmakers, who were eager to expand Medicaid when the economy was flush, now say they can no longer maintain a program that often accounts for 20% of a state's overall spending. "There needs to be a total rethinking of Medicaid and who it's intended to serve," Dennis Braddock, Washington state's Medicaid director, said. The following are some examples of how states have begun to trim the program:
- California: Gov. Gray Davis (D) has proposed charging Medicaid beneficiaries a $5 copayment for some services and cutting provider reimbursements.
- Florida: Gov. Jeb Bush (R) has proposed that adult beneficiaries with catastrophic illnesses "pay their own bills until they have sunk into extreme poverty."
- Illinois: Gov. George Ryan (R) has cut provider reimbursements, which could force nursing homes and hospitals to either close or stop accepting Medicaid patients.
- Missouri: Gov. Bob Holden (D) has proposed eliminating home health services for 9,000 disabled beneficiaries.
- North Carolina: Medicaid has stopped covering infant circumcision.
- Vermont: Senior beneficiaries "soon may have to buy dentures on their own or go without."
- Utah: The state received a waiver last month allowing Medicaid to cover more uninsured residents while at the same time eliminating some benefits and charging annual fees and copayments for beneficiaries at the top of the income scale.
Patient advocates say that these cuts will have dire consequences for many beneficiaries. Criticizing Utah's reforms, Leighton Ku of the Center for Budget and Policy Priorities said that "decades of research shows that copayments make a big difference in utilization rates. With premiums, a fairly large number of people will drop off the program." But state officials counter that it is impossible for states to continue funding Medicaid programs at their current level and also have enough money to pay for other state programs, such as education, roads and schools -- especially in a recession. And because of its size, Medicaid is often the first program that states target when budget cuts are required. Glen Rosselli, undersecretary of the California Department of Health and Human Services, said, "Generally speaking, when large reductions are needed, you do what Willie Sutton said was his reason for robbing banks: You go where the money is" (Simon, Los Angeles Times, 3/5).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.