Proposed Medicaid Cuts Could Cost Massachusetts $100M Annually, Hurt Universal Health Coverage Efforts

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Health Insurance / Medical Insurance
Article Date: 15 Nov 2007 - 5:00 PDT

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A reduction in federal Medicaid spending proposed by the Bush administration could cost Massachusetts more than $100 million annually and hinder the state's efforts to ensure all residents have health coverage, the Boston Globe reports.

The proposed cuts would affect new physician training programs, rehabilitation programs for the disabled and support services for schoolchildren who require special care. They also could hurt the state's efforts to enroll uninsured children in Medicaid, which is a "critical part" of the state's health insurance law, the Globe reports. In addition, a proposal to limit federal funding for outpatient hospital care for all beneficiaries could eliminate or reduce payments for a broad range of services, including physician care, dental care, physical therapy and blood work, according to Massachusetts Hospital Association Vice President Joe Kirkpatrick.

Kirkpatrick estimated the potential loss "in the $10 million range." Massachusetts' annual budget for Medicaid is $8 billion, about half of which is federal funds. According to the Globe, the proposed cuts could force the state to limit some services or cover more of the costs at a time when the state already "faces rising costs for its landmark health insurance initiative." State Medicaid Director Thomas Dehner said, "Without those services, certain individuals will get worse and end up costing us all more money. It is very bad policy."

However, Dennis Smith, director of CMS operations, said, "Over time, states have found different ways to shift their cost of Medicaid over to the federal government. It's our responsibility to push back" to ensure federal funding is being used only for "medically necessary services for Medicaid-eligible people." The cuts do not require congressional approval, but federal lawmakers have imposed a moratorium until May 2008 on the proposed cuts to physician training and limits to state funding options (Dembner, Boston Globe, 11/13).

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