Spotlight Exclusives

State Lawmakers Eye Medicaid Cuts to Close Budget Gaps

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In an effort to remedy state budget deficits, lawmakers in cash-strapped states are drastically cutting Medicaid payments to doctors. The result, as reported in a revealing New York Times article, is an increasing number of doctors who are now declining to accept patients covered by Medicaidthe government funded health insurance for the poor and disabled.

The cuts to Medicaid provider payments are striking because the program already reimburses doctors at rates lower than Medicare and private insurers. As a result, fewer doctors are accepting patients enrolled in Medicaid. Consequently, low-income patients cannot readily access the health services they need while emergency rooms increasingly are taking in patients who do not need immediate care.

As Rebecca Curtis, mother of a two-year-old son, said in the New York Times:

“I called four or five doctors and asked if they accepted our Medicaid planIt would always be, No, I۪m sorry.۪ It kind of makes us feel like second-class citizens.”

Medicaid costs are shared by the states and the federal government, with states in control of spending, eligibility requirements, benefits and provider payments. But because the American Recovery and Reinvestment Act restricts states from making changes to eligibility requirements, states are targeting Medicaid benefits and provider reimbursements to reduce costs and close budget gaps. According to the Times, Michigan reduced provider reimbursements by 8 percent and cut dental, vision, podiatry, hearing and chiropractic services for adults.

But Michigan isn۪t alone. Other states are also cutting back on reimbursements to medical providers. For example, Kansas lawmakers are proposing a 10 percent cut in provider payments. And this past weekend, Virginia legislators passed a $70 billion budget, which includes a 4 percent reduction in Medicaid reimbursements for fiscal year 2011, which starts July 1.

The cuts come at a time when millions of unemployed Americans, who formerly relied on their employer-based health care coverage, are turning to Medicaid. According to a study by the Kaiser Family Foundation, Medicaid enrollment rates increased by 3.3 million people from June 2008 to June 2009the largest ever one-year increase in Medicaid participation.

State lawmakers facing crippling budget shortfalls see the reimbursement reductions as crucial to alleviating the impact of the recession on their state۪s economy. But in their efforts to curb deficits, policymakers shouldn۪t forget that for millions of low-income and disabled Americans, Medicaid is an important lifeline.

Posted by Helina


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