US states slash Medicaid

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US states slash Medicaid
By Tom Eley
20 February 2010

US states are imposing major cuts to Medicaid, the health insurance
program for low income Americans jointly funded with the federal
government. The cuts are being enacted in response to huge budget
deficits in states throughout the country and a sharp increase in
enrollment fuelled by the unemployment crisis.

Cuts in Medicaid services are a critical compoenent of the attempts by
the US corporate and financial elite, led by the Obama administration,
to slash government health care costs and reduce care. On Thursday,
Obama established a bipartisan panel whose central purpose will be to
find ways to decrease spending on government health care and pension
programs, including Medicaid (See, “Obama appoints panel to slash
social programs”)

Some versions of the Democrats’ health care overhaul proposals include
an expansion of Medicaid eligibility, but without full support for
state governments. This will translate into further cuts to services
and ensure that larger numbers of Americans have access only to the
most limited and inadequate health care coverage, while the wealthy
continue to enjoy the best care money can buy.

Enrollment in Medicaid increased by 3.3 million between June 2008 and
June 2009 to nearly 47 million cases, according to a study released
Thursday by the Kaiser Family Foundation. Caseloads increased in every
US state. In thirteen states, enrollment shot up by more than 10
percent. According to a new study by Families USA, for every 1
percentage point rise in the US unemployment rate, 1 million people
become eligible for Medicaid and related programs.

With Medicaid already consuming about a fifth of most state
budgets—the same as the average outlay for education—both Democrat and
Republican governors and lawmakers throughout the country are
insisting on deep cuts in the services provided to Medicaid recipients.

Medicaid typically provides insurance to those who fall below the
official poverty level, but only within certain categories: children,
pregnant women, parents of young children, the disabled, and the
elderly who require nursing home care. The program’s reach varies
among the states, but the majority of Americans living in
poverty—three out of five according to one estimate—are not covered by
Medicaid.

Because emergency federal stimulus funding for Medicaid bars states
from narrowing eligibility requirements, states have instead targeted
medical services and payments to doctors for cuts. In recent years the
federal government paid between 50 percent and 75 percent of a state’s
Medicaid costs—the poorer the state, the higher the federal
proportion—but the stimulus package increased this share to between 61
percent and 85 percent, at a cost of $87 billion. These funds are set
to expire at the end of December unless Congress approves a $25
billion extension.

The additional federal funds have been grossly inadequate, and every
state faced Medicaid funding shortfalls in the current fiscal year,
according to the Kaiser Foundation study. In response, a number of
states are curtailing currently covered “non-essential” services.

Nevada’s Republican governor, Jim Gibbons, has proposed cutting all
Medicaid funding for adult coverage of eyeglasses, dentures, and
hearing aids. In order to save about $830,000, the state will also
“reduce the number of diapers provided monthly to incontinent adults
(to 186 from 300),” the New York Times reports.

Massachusetts will eliminate coverage for restorative dental service.
Last year a similar revocation of dental coverage in Michigan led to
the death of a 76-year-old woman, Blanche D. LaVire, who had been
diagnosed with abscesses and advanced periodontitis that required
surgery. She died while waiting for state bureaucracies to approve an
exception due to a mental health condition. (See, “Michigan woman dies
after Medicaid dental care is cut”).

Michigan, which eliminated not only dental but vision benefits for
adult Medicaid recipients in fiscal year 2010, is considering a bevy
of new cuts for 2011, including mental health services, prescription
drug coverage, treatment for deformities, and artificial limbs.

Similarly, New Mexico’s Democratic governor, Bill Richardson, is
proposing cuts to Medicaid that could include prescription drug
coverage, vision and dental care, hospice care for near-death
patients, and physical therapy.

Maine is moving to limit outpatient mental health visits for adult
Medicaid recipients to 18 per year and to cap outpatient hospital
visits at 15 per year.

Many more states have reduced the amount that they pay to doctors,
clinics, hospitals, and nursing homes who treat Medicaid recipients.
Already Medicaid is rejected by many health care providers because it
tends to pay at a level far below private insurance and Medicare.
These reimbursement cuts ensure that fewer Medicaid patients will be
able to find treatment, and those clinics and hospitals that do so
will be further driven to reduce costs and quality.

Among the states likely to enact major cuts for Medicaid reimbursement
are New York, Texas, Pennsylvania, Maine, Louisiana, Maryland,
Missouri, Virginia, and Vermont. Maine is contemplating a 10 percent
across-the-board cut, and New York Governor David Paterson is
proposing to slash $400 million from Medicaid reimbursement.

After Kansas’s Democratic governor, Mark Parkinson, imposed a 10
percent cut in provider payments beginning January 1, Dr. C. Joseph
Beck, a Wichita ophthalmologist, ended treatment for his Medicaid
patients. “I’m out, I’m done,” Dr. Beck told the New York Times. “I
didn’t want to. I want to take care of people. But I also have three
children and many employees to take care of.”

Some states are cutting essential services that, by triggering the
removal of federal matching funds, will effectively double the funding
cut. Tennessee’s Democratic governor, Phil Bredesen, is proposing cuts
that would set up a $10,000 limit on inpatient hospital care, a sum
easily surpassed by serious car accidents, heart attacks, and
treatment for serious illnesses. Bredesen would also impose limits on
specific hospital services, including X-rays, laboratory services and
doctor’s office visits, the Times reports.

Arizona’s Republican governor, Jan Brewer, has proposed kicking
310,000 adults without dependent children off Medicaid rolls and
scrapping the state’s Children’s Health Insurance Program (CHIP), a
program that secures federal matching funds for states that subsidize
health insurance for children from low-income households that earn
more than the income cutoff for Medicaid. The state has already frozen
enrollment in CHIP.

California governor Arnold Schwarzenegger has proposed reducing adult
eligibility for the state’s Medicaid program, Medi-Cal, from 133
percent to approximately 72 percent of the official poverty threshold,
and to reduce eligibility for children and pregnant women from 200
percent to 133 percent of the poverty level. If enacted, these
restrictions would cost an estimated 250,000 people their health
insurance within six months.

Schwarzenegger has also threatened to end the state’s CHIP program,
Healthy Families. The cut would affect nearly 900,000 children now
enrolled in the program. California lawmakers are already moving to
cut eligibility in CHIP from 250 percent to 200 percent of the federal
poverty level and to impose increased premiums of $14 per child, even
as private insurance costs in the state skyrocket. The legislature
will also likely eliminate CHIP vision coverage.

The cuts enacted against Medicaid and CHIPS will disproportionately
affect the most vulnerable sections of the population, especially
children.

Yet America’s children are in desperate need of high-quality health
care. According to a recent study whose results were published in the
Journal of the American Medical Association, over half of all US
children will suffer from a chronic illness during their childhoods, a
two-thirds increase since the 1980s. Much of the increase is
associated with obesity, asthma, and diabetes, conditions strongly
linked to poverty and other environmental factors. (See, “Majority of
US children suffer chronic health conditions, study says”)

The reductions to Medicaid services and providers, even as the
program’s rolls swell, demonstrates the basic incompatibility of the
right to decent health care with the profit drive of America’s
financial aristocracy. Having enriched themselves before, during, and
after the financial crisis of their own making, the financial
elite—acting through their two parties—are now demanding “tough
choices” and “discipline” by cutting what remains of the nation’s
limited social safety net.

http://wsws.org/articles/2010/feb2010/medi-f20.shtml

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