Study: Most States Cut Medicaid Funding
By LAURA MECKLER The Associated Press January 13, 2003
WASHINGTON (AP) - States facing tight budgets and growing Medicaid costs are
cutting back on prescription drugs and dental care while increasing
co-payments for people who use the program, an independent study released
Monday says.
The study found that all states except Alabama have cut spending or plan to
cut spending this year on Medicaid, the health insurance program that serves
42 million poor, disabled and elderly Americans. That includes 32 states that
made cuts when the fiscal year began last summer and have found it necessary
to cut yet again.
``For most states, there aren't any easy solutions left,'' said Diane Rowland,
executive director of the Kaiser Commission on Medicaid and the Uninsured,
which released the study.
Based on a 50-state survey, her group found that 45 states plan tighter
controls on payments for prescription drugs, 37 states plan to reduce or
freeze payments to doctors and hospitals, 27 states plan to restrict
eligibility for the program, 25 states plan to cut benefits such as dental or
vision care and 17 states plan to increase co-payments required of
beneficiaries.
That's on top of similar cuts made last year.
On average, Medicaid spending is projected to grow by 9 percent this year,
almost twice as fast as legislatures assumed when writing their 2003 budgets,
the survey found.
Overall, states are facing massive budget shortfalls totaling at least $60
billion going into the next fiscal year. Medicaid makes up an average of 15
percent of state budgets.
Legislation introduced last week would provide $10 billion immediately to help
states with Medicaid costs. A similar bill, sponsored by Sens. Susan Collins,
R-Maine, and Jay Rockefeller, D-W.Va., was approved easily last year by the
Senate but never passed the House.
During the fiscal crisis of the early 1990s, states were more willing to cut
spending on education and to raise taxes than they are now, which puts
Medicaid at particular risk, said John Holahan of the Urban Institute, who
authored a companion study looking in depth at seven states.
In addition, in the early '90s, states had one-time options that are no longer
available, such as funneling patients into cost-saving managed care plans.
Cutting Medicaid spending is particularly painful for states because the
program is financed jointly by state and federal governments. That means
states forgo federal money with every Medicaid dollar they cut from state
budgets.
Medicaid covers 30 million people in low-income families, including one in
five U.S. children. It also provides health and nursing home payments for 7
million people with disabilities and supplements Medicare for 6 million
elderly living in poverty.
While most beneficiaries are children and their parents, the bulk of the money
is spent on the elderly and disabled.
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N.Y. urged to take cue from business to hold down health care, drug
costs
By BRIAN McGUIRE Schenectady Daily Gazette Reporter January 14, 2003
ALBANY - Seniors reeling from the high cost of prescription drugs are not
likely to find relief until New York implements a plan that excludes certain
drugs and charges higher premiums to higher-income clients, the director of a
Washington-based philanthropy told legislators and lobbyists at the state
Capitol Monday.
Speaking at a panel organized by the AFL-CIO task force on prescription drugs,
Heinz Family Philanthropies Executive Director Jeffrey Lewis outlined a plan
for affordable, universal prescription drug coverage for seniors that he said
would help solve the problem of escalating drug costs and its corollary - a
rising number of uninsured New Yorkers - by consolidating the state agencies
that administer health care and by developing a list of "preferred drugs" from
which clients may choose.
"My recommendations focus on the needs of the state," Lewis said by phone from
a hotel room in New York City last night.
"I would recommend that New York apply a business model to the public sector."
Lewis has been in conversation with the United Federation of Teachers since
Massachusetts' implementation in 2002 of the Heinz plan to Overcome
Prescription drug Expenses, or HOPE.
That plan made Massachusetts the first state in the country to offer universal
prescription drug coverage to residents 65 years old and older. As the
legislature prepares to deal with a deficit of several billion dollars, many
lawmakers are looking at cuts to health care as a way to close the gap.
Joseph Glazer, president of the Mental Health Association of New York, said he
was not familiar with the Heinz proposal but warned against plans that limited
the types of drugs available to patients.
"You're not talking about the difference between Tums and Rolaids," Glazer
said.
But Lewis said his analysis would allow for a government to make all drugs
available to patients with mental illness. "It may mean saving $50 million
instead of $100 million," Lewis said.
"But at least people would know why they weren't saving as much money."
Legislators will be considering changes to the state's existing prescription
drug plan, EPIC, in the upcoming legislative session.
Gov. Pataki's spokesman, Joe Conway, did not respond to requests about the
Massachusetts plan in time for this article.
The U.S. Supreme Court is currently considering two cases that will determine
whether drug makers can be forced to lower prices for the uninsured. Lawyers
for the pharmaceutical industry are already lobbying to block the measures,
arguing that health care decisions should be decided at the federal level.
Source:
http://www.dailygazette.com/business.shtml#story03E00005
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