From: jfa@jfanow.org (Justice For All Moderator)

"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. Smith, 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 Donald 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. Smith 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. Smith 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. Smith 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.

John 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 Edwards,
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. Susan 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.

Robert 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.

Daniel 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=1065303435&ei=1&en=dee69096a2dbfa93

[note: the above link is broken into two lines.]

Copyright 2003 The New York Times Company