The Washington Post (Feb. 25) put the story under politics instead of health, which may show what's happened to the problem of health care in the United States: The National Governors Association declined to endorse the president's proposals on Medicaid reform unless they could get to see the fine print. The Post summarized the president's plan: "The president is offering states an approach that would temporarily help them with their financial predicament without actually providing additional money. States that chose to take part would gain an extra $12.7 billion for the next seven years, but their subsidies would be cut by the same amount for the three years after that. And for about one-third of the people on Medicaid -- those whom states are not required to insure under federal law but are covered anyway -- states would gain vast new freedom to restrict benefits, charge new fees, put people in private health plans, and subtract -- or add -- groups of patients."
The governors, most of whom are facing severe budgeted shortfalls during the coming year, might be expected to welcome any proposal that helps their near-term problems. The Center on Budget and Policy Priorities has estimated that for 2004, state budgets will show a deficit of $60 to $85 billion. The center has also reported that 11 states -- Connecticut, Massachusetts, Missouri, Montana, Nebraska, Nevada, New Jersey, Oklahoma, Tennessee and Washington state -- have already proposed cutbacks in health-care funding for the poor and disabled. This would represent a loss of health coverage for one million people, most of whom are the working poor, people who are fully-employed at close to the poverty level. In New Jersey, the income level for new applicants would drop from 200% of the poverty level to 25&endash;37% of the poverty level. The people affected are not the unemployed; they are workers in jobs that don't offer medical coverage and can't afford to buy private insurance on their own. According to the center, in Alabama a parent with two children is ineligible for Medicaid if her earnings exceed $3,048 a year. The Miami Herald reports that the Florida income level to qualify for Medicaid is under $650/month.
Even when Medicaid coverage is available, it may not translate into health care. In August 2002, the American Academy of Pediatrics issued a report saying that low reimbursement rates and slow payment made it financially impossible for pediatricians to accept Medicaid patients. The Olympian in Washington state reported on pharmacies that will no longer accept Medicaid prescriptions when Washington state cuts back on its reimbursement formula.
In December 2002, the National Association of State Budget Officers issued a report with a list of proposals for balancing state budget gaps. Under "targeted cuts" it suggests: Cuts to state employee pay raises, eliminate or reduce funding for lower priority programs or high priority programs (e.g., optional Medicaid services, drug treatment and rehabilitation programs for prison inmates, reduce flu vaccine stockpile, reduce pay for substitute teachers, delay school start date, support for people with developmental disabilities by reducing staff or closing offices, and reduce state assistance to the aged, blind and disabled, reduce programs for troubled youth). Also, defer or cancel capital projects."
The report also suggests expanding the tax base by putting sales taxes on activities not currently covered by taxes. This might include dating services, escort services, tattoos as well as home security and medical examinations. To their credit, the State Budget Officers do consider closing tax loopholes for corporations. And, in a nice example of double dipping, they propose raising tuition in state universities and then increasing the pressure on alumni for donations to support the school.
(As an aside, the Heritage Foundation, in September 2002, published budget balancing strategies that included sales of state-owned properties. The Foundation suggested that the proceeds of the sales could be used to reduce taxes.)
On Jan. 16, Kentucky Gov. Paul Patton proposed ending some Medicaid coverage for nursing home and at-home care, imposing fees for dental and some other health services and trimming reimbursements for outpatient hospital care, according to the Owensboro Messenger-Inquirer.
The inevitable cutbacks in Medicaid funding will hit children the hardest. In 2001, Medicaid covered 43.9 million people, 22.6 million of whom were children. Medicaid also funds about 50% of the nursing home care for the elderly and has been a safety net for hospitals which serve low income communities.
Cuts in Medicaid will not only hurt those who rely on the program for their health care, it will increase the downward economic spiral. The University of North Carolina estimated that Medicaid cutbacks, depending on severity, could cost over 9,000 jobs for healthcare workers in that state.
For 2001, the US Census Bureau estimated that 41.2 million people had no health insurance at all. This is almost certainly an underestimate, since the Census Bureau undercounts the homeless, who can safely be assumed not to have medical insurance. Add the uninsured to those who rely on Medicaid for their health coverage, and the total approximates one-third of a nation.
The governors were right to ask questions. It's not clear whether the administration is really concerned with the answers.
Sam Uretsky is a writer and pharmacist living on Long Island, N.Y.