States are misguided in their moves to slash the Medicaid safety net
It’s $4 billion here, $2.9 billion there, and likely billions more elsewhere.
Those are just some of the numbers being tossed around in recent calls for reductions in state Medicaid budgets. The first two come from proposals announced in Florida and New York, respectively.
In the Sunshine State, thanks to Republican Gov. Rick Scott’s budget blueprint, the forecast looks dark and gloomy for Medicaid beneficiaries and healthcare providers as he projects those big “savings” over two years, in large part through a shift of patients to managed care. Expect lower reimbursements to be part of the deal.
In New York, Democratic Gov. Andrew Cuomo is seeking deep cuts in the coming fiscal year to help close a projected $10 billion budgetary hole. It’s up to a special Medicaid redesign team to determine how those cuts will be executed.
Out West, Arizona has drawn fire for spending reductions already under way, with the state making headlines late last year when Medicaid patients urgently needing organ transplants were denied coverage because of the cutbacks. Patients have died waiting for transplants they can’t possibly afford. The state has requested a waiver from federal rules that would allow it to drop 280,000 beneficiaries from its Medicaid rolls without losing matching funds from Washington. And this is only the beginning. We all know that states are hurting, faced with unprecedented budget shortfalls thanks in large part to the lumbering economy. Revenue remains depressed as jobless numbers fall at a maddeningly slow rate, meaning vast numbers of people still depend on Medicaid.
While most indicators still point to an economic recovery, it sure doesn’t feel like one, especially for state comptrollers. As we reported last week, the Center on Budget and Policy Priorities projects that 44 states and the District of Columbia face a combined $125 billion budgetary shortfall in fiscal 2012. A report released in November from the National Conference of State Legislatures predicts that states are looking at an overall deficit of about $111 billion for fiscal 2011.
Despite these dismal numbers, we need to be reminded that Medicaid is a “safety net” program. Governors are taking a machete to what was already a frayed net. The saddest part is that so much progress in raising health insurance coverage had been achieved in recent years thanks to Medicaid expansions and efforts such as the Children’s Health Insurance Program. Fewer people than ever were falling through the cracks.
We also need to remember the dire predictions from foes of the health reform movement that one certain outcome of proposed changes to the system would be healthcare rationing. They wailed that it would be government bureaucrats making the calls on healthcare, not doctors and other providers.
Well, the rationing is under way, and it is indeed the bureaucrats (governors and state legislators) calling the shots on who gets healthcare and who doesn’t, at least for the Medicaid population. But the Patient Protection and Affordable Care Act didn’t deliver this mess. The states themselves have to accept much of the blame for their long-term lack of fiscal discipline. The Obama administration is not being uncooperative in trying to find solutions other than more dismantling of Medicaid. HHS Secretary Kathleen Sebelius has offered governors and state legislatures a lifeline in the form of greater flexibility in embracing innovative ideas to shore up Medicaid while protecting those in need. But don’t be surprised if those invitations are spurned.
States always have options when it comes to setting budget priorities. Their latest actions only mean more uncertainty for a vulnerable population.
DAVID MAY Assistant Managing