States Consider Further Cuts To Medicaid Programs Amid Continuing Recession

Main Category: Medicare / Medicaid / SCHIP
Article Date: 06 Jan 2009 - 3:00 PDT

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The Washington Post recently examined how many states "are being forced to curtail" Medicaid services "as they struggle to cope with the deteriorating economy." Medicaid, which provided health coverage to 50 million U.S. residents in 2007, is the largest or second-largest expense in every U.S. state, the Post reports. According to the Post, 19 states have lowered payments to hospitals and nursing homes, eliminated coverage for some treatments and excluded some beneficiaries from the program completely. Eighteen of these states, as well as six others, are considering additional reductions for fiscal year 2010 in preparation for the possibility that additional money will not be available, the Post reports.

Many states are suspending coverage for services not required by the federal government, such as physical therapy, eyeglasses, hearing aids and hospice care, and a few states are requiring that beneficiaries pay a larger portion of the cost of their care. The Post also examined financial issues facing the Medicaid programs of California, Maryland, Rhode Island, South Carolina, Virginia and Washington, D.C.

Diane Rowland, executive vice president of the Kaiser Family Foundation and executive director of the Foundation's Commission on Medicaid and the Uninsured, said the financial crises facing Medicaid programs are exacerbated because of a milder recession earlier in the decade, when states implemented many "cuts that were making the program more efficient." She added, "Now they are making ... cuts to the core."

According to the Post, governors and state legislators "have been pleading with Congress" and President-elect Barack Obama's administration for financial help with Medicaid. Congressional Democrats and Obama have proposed providing additional funding to the state Medicaid programs in an economic stimulus package. Lawmakers have suggested $100 billion for the programs, which would increase the portion funded by the federal government over the next two years. In addition, some lawmakers also are considering allowing people who have recently lost their jobs to enroll in Medicaid, with the federal government paying for the entire cost of their coverage (Goldstein, Washington Post, 12/26/08).

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