More Cuts in Medicaid

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" More Cuts in Medicaid "

>From the New York Times:

Rising Costs Prompt States to Reduce Medicaid Further

September 23, 2003

By ROBERT PEAR

The New York Times

WASHINGTON, Sept. 22 - Struggling through a third

consecutive year of fiscal distress, states have again

squeezed Medicaid, the nation's largest health insurance

program, by scaling back eligibility, cutting benefits,

increasing co-payments and freezing or reducing payments to

doctors and hospitals.

Vernon K. , former Medicaid director of Michigan, said

today that soaring health costs and plunging state revenues

had forced virtually every state to take action to slow the

growth of Medicaid, the health program for 51 million

Americans.

Economists and state officials said the cutbacks indicated

the intense pressure on the states as a result of declining

tax receipts.

The outlook for Medicaid remains grim, the officials said,

because state revenues are expected to grow much more

slowly than the economy, and inflation in health care is

not expected to abate in the coming year.

" The fiscal crisis facing states is far worse than the

condition of the nation's economy, " said J. Boyd,

director of fiscal studies at the Rockefeller Institute of

Government, an arm of the State University of New York.

State tax revenue dropped sharply even as the nation's

economic output grew at a slow pace in the past year, Dr.

Boyd said.

Mr. interviewed officials in all 50 states in an

annual survey conducted for the Kaiser Commission on

Medicaid and the Uninsured, a private group created by the

Kaiser Family Foundation.

In the 2003 fiscal year, Mr. said, 25 states

restricted eligibility for Medicaid, 18 reduced benefits,

and 17 increased co-payments. Moreover, he said, 21 states

cut payment rates for one or more groups of health care

providers.

For example, Mr. said, Medicaid payment rates for

doctors were cut in 5 states and frozen in 36, while rates

for hospitals were reduced in 9 states and frozen in 22.

The federal government and the states share the costs of

Medicaid. Federal Medicaid spending soared 13 percent in

the 2002 fiscal year, to $147.5 billion, and has increased

again in 2003, though at a slower rate, 9.2 percent, the

Congressional Budget Office said.

A sluggish economy and rising unemployment have reduced

incomes for millions of families, increasing the number

eligible for Medicaid.

Twenty states reported that increased enrollment was the

biggest factor driving up the cost of Medicaid. Sixteen

cited prescription drug costs as the biggest factor.

F. Holahan, director of health policy research at the

Urban Institute, said increased enrollment of the elderly

and the disabled accounted for nearly 60 percent of the

growth in Medicaid spending in the past two years.

The Medicaid director in Ohio, Barbara Coulter ,

said the recent Medicaid cuts had unquestionably caused

hardship for some. But, she said, Congress averted deeper

cuts by providing the states $20 billion in temporary

fiscal relief, including $10 billion for Medicaid.

For years, doctors have complained that Medicaid paid them

less than most other insurers. Dr. Fleischman,

medical director of the Venice Family Clinic in Los

Angeles, said payments were so low that many doctors

refused to take Medicaid patients.

" We will be issuing Medicaid cards, " Dr. Fleischman said,

" but it won't mean anything because people cannot get in to

see a doctor. In parts of Los Angeles, children have to

wait weeks to see an ear, nose and throat doctor, a

neurologist or an orthopedist. "

Nearly all states reported taking action to rein in

prescription drug costs in the past year. Thirty-two

expanded the list of medications requiring special

approval, known as prior authorization. Fourteen

established lists of preferred drugs for certain conditions

and discouraged doctors from prescribing other medicines.

Four required greater use of low-cost generic drugs. Five

imposed monthly limits on the number of prescriptions that

could be filled. Fourteen established new or higher

co-payments for drugs.

Medicaid officials said they needed to be careful in

clamping down on the use of prescription drugs.

Day, the Medicaid director in Kansas, said

psychiatric drugs accounted for at least 30 percent of his

state's Medicaid drug spending. " Those drugs have been a

miracle for people with serious, persistent mental

illness, " Mr. Day said.

N. Mendelson, president of Health Strategies

Consultancy, said, " Prescription drugs account for 15

percent to 25 percent of total Medicaid spending, and

Medicaid drug spending has increased much more rapidly than

the rest of the program. "

http://www.nytimes.com/2003/09/23/national/23MEDI.html?ex=1

065303435 & ei=1 & en=dee69096a2dbfa93

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Copyright 2003 The New York Times Company