Ir­ra­tional pro­pos­als

States are mis­guided in their moves to slash the Med­i­caid safety net

Modern Healthcare - - Opinion -

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


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