Without More Federal Help, States Might Cut Medicaid

Washington – Unless Congress bails them out, states probably will have to cut health coverage for low-income families and others without insurance, a new report says.

Lawmakers included higher Medicaid reimbursement funds for states in last year’s economic stimulus bill, but the money will expire next Dec. 31.

Without an extension, most states won’t be able to ensure that eligible Medicaid beneficiaries will be served, according to Families USA, a nonpartisan health advocacy group, which issued the report Thursday.

“At the same time Congress is considering health reform, a more immediate crisis is looming that will cause many to join the ranks of the uninsured within the next year,” said Ron Pollack, the group’s executive director.

The report says that a six-month extension of the increased reimbursement rate also would help spur business activity and create jobs.

Medicaid is a health insurance program for the poor whose costs are shared by the federal government and the states. Income eligibility varies from state to state.

As states wrestle with tough budgets because of the economy, they’re scrambling for ways to save money.

In California, Gov. Arnold Schwarzenegger has proposed cuts that would drop 250,000 children, pregnant women and parents from the state’s Medicaid program.

Florida might tighten eligibility in a way that would eliminate 19- and 20-year-olds from Medicaid, as well as some expectant mothers.

Kansas already has cut Medicaid reimbursement rates to doctors, hospitals and other health care providers by 10 percent.

“If providers decide not to participate in Medicaid, or not take on any more Medicaid patients because the rates are too low, we have a lot of concerns about assuring access to care,” said Peter Hancock, a spokesman for the Kansas Health Policy Authority, which administers the state’s Medicaid program.

President Barack Obama’s proposed budget for fiscal 2011 contains extra Medicaid funds for every state. The House of Representatives also recently passed a jobs bill that includes a six-month extension of the higher reimbursement rate.

The Senate hasn’t taken any action yet but it’s expected to debate its own jobs legislation next week.

“The taxpayer credit card is maxed out,” said Sen. Kit Bond, R-Mo. “I understand states are already struggling, but this is precisely why the federal government shouldn’t be imposing more unfunded mandates on states as the Democrats have proposed in their massive health care bills.”

Medicaid advocates say that states need to know soon whether Congress intends to help, because they’re involved in 2011 budget talks now.

“They’re in very dire, dire straits,” said Ann Kohler, the director of health services for the American Public Human Services Association. “They are looking at ways to survive. State revenues will lag about three or four years behind the (economic) recovery, so they’re not going to be out of this for some time. This money is critical.”