Analysis: Medicaid cuts may limit care for new 2014 enrollees
Aug 11, 2011, 11:15 a.m.
By David Morgan
WASHINGTON (Reuters) - Three years before Medicaid is due to cover millions of uninsured Americans, state funding cuts may already be undermining how much care the government health program for the poor will offer new enrollees.
Two dozen states from California to Maine plan to cut at least $4.7 billion from their Medicaid plans following four straight years of budget shortfalls, according to data provided separately by the nonpartisan Center on Budget and Policy Priorities and the consumer advocacy group Families USA.
The cutbacks sought include reductions of up to 15 percent in reimbursement rates for doctors, hospitals and other care providers, higher co-pays for beneficiaries including children and the loss of optional benefits such as preventive care and dental and vision services.
Several states hope to restrict eligibility under enhanced Medicaid plans that offer services beyond the basic mandate.
Arizona is leading that charge. It suspended new enrollments for adults without children as part of a $500 million savings package. The freeze bars access for the next three years to an estimated 100,000 people.
As Congress seeks new ways to cut the deficit ahead of a November deadline, further cuts to the $427 billion Medicaid program are also looking more likely at the federal level.
The growing pressures mean access to healthcare services under Medicaid may be restricted, despite its role in expanding health coverage to 32 million more people under President Barack Obama's healthcare law. Medicaid and the Children's Health Insurance Program, which covers children who do not qualify for Medicaid, are due to add 17 million people who are now uninsured beginning in 2014.
Steep reimbursement cuts mean that doctors, clinics and hospitals may respond by restricting or eliminating access to Medicaid beneficiaries.
"The provider rate cuts are going to mean that fewer providers will offer Medicaid services by the time we get to 2014, and that's bad. It pulls in the opposite direction of where healthcare reform's trying to go," said Mike Leachman of the Center on Budget and Policy Priorities.
FEDERAL MONEY MAY NOT COMPENSATE
There is little hard data to measure the effects cuts are having on the 60 million people who already rely on Medicaid, which is funded jointly by federal and state governments but administered by the states with federal oversight.
However, the volume of state cuts to Medicaid providers this year prompted the Obama administration in May to publish new guidelines for safeguarding federally mandated healthcare access levels while reducing costs.
"We do see a lot of rate cuts," said a senior administration official, who spoke on condition of anonymity. "Some of them are going to be more temporary, some of them are going to be more permanent. Some of them are going to hold and some of them may not hold based on access concerns."
"We ought to proceed in a thoughtful way, both we at the federal level and states at the state level," the official said.
The Obama administration is also working with more than a dozen states on plans to control costs and eliminate inefficiencies. Their focus is on the 28 percent of Medicaid recipients whose chronic ailments generate a huge share of the costs.