ATLANTA (AP) — As Medicaid prepares for a vast expansion under the Patient Protection and Affordable Care Act of 2010 (PPACA), the 47-year-old entitlement program for the poor is facing increasing financial pressure.
Deficit-burdened states are chipping away at benefits and cutting payments to doctors.
Nearly every state has proposed or implemented a plan in its current budget to rein in costs, and many are considering additional cuts in the year ahead.
For the tens of millions of poor and disabled who rely on the program — approaching nearly one in five Americans — the cuts translate into longer waits for doctors, restrictions on prescription drugs, a halt to vision and dental care, staff cuts at nursing homes, and dwindling access to home health care.
Ruth Wohlforth, 70, is among those feeling the effects.
Her $700 monthly income makes her a "dual eligible," meaning that she qualifies for both Medicare and Medicaid, but she says her benefits have been reduced, she's being forced her to make co-pays for the first time on prescription drugs, and she now has to drive about 30 minutes from her home near the southern tip of New Jersey to see a doctor. Some of her friends have been assigned to doctors in Philadelphia.
She said she feels lawmakers are not aware of the real-world consequences of their spending cuts.
"I've seen so many people in tears, and they don't know what to do," Wohlforth said. "People that are older than I am, and are in worse shape, they get befuddled by the whole thing. They don't know where to go for help; they just feel they're not being listened to."
States are reshaping the Medicaid landscape even as the need has grown along with joblessness during the recession.
The $427 billion-a-year program, a combination of state and federal funding, also had been targeted for additional cuts at the federal level this year as members of Congress sparred over how to reduce the nation's debt. But funding seems safe for now after a special committee failed last month to reach an agreement on how to cut overall spending.
Already, many changes at the state level have been dramatic and are testing the legal bounds of what Medicaid must provide:
- Arizona, for a time, eliminated coverage for transplants for Medicaid patients. Hospital officials in the state blame at least one death on the halt in coverage. Gov. Jan Brewer, R, restored transplants but is prohibiting thousands of low-income, childless adults from entering the program and has increased fees for those who smoke and the obese.
- New Jersey Gov. Chris Christie, R, is pushing a plan under which only the poorest would qualify for coverage. A parent of two making more than $103 per week would no longer be eligible for coverage.
- The U.S. Supreme Court will decide whether California has the right to continue cutting payments to physicians and other Medicaid providers to help close the state's ongoing budget deficit.
Cuts to provider fees, as in California, have been the most frequently used tactic by states to save Medicaid costs. A recent survey by the National Association of State Budget Officers found that 33 states wanted to reduce provider rates and another 16 sought to freeze them.
California was granted permission by federal officials to make broad cuts to reimbursement rates to its Medicaid program, known as Medi-Cal, in October. The cuts include a 10% reduction to payments for outpatient services for doctors, clinics, optometrists, dental services, medical equipment and pharmacy. They are intended to save the state an estimated $623 million.
A coalition of trade associations representing doctors, pharmacists and chain drug stores has filed a lawsuit seeking to stop the cuts. Doctors who care for Medi-Cal patients say they already have been subjected to multiple pay cuts, and some say they no longer will be able to serve the state's neediest patients.
About 70% of Dr. Douglas Tolley's practice in Yuba County, Calif., is covered by Medi-Cal. The 64-year-old obstetrician, who practices in a largely agricultural region about 40 minutes north of the state capital, said he is the old-school sort of doctor who "was brought up in a time when doctors took care of all comers."
Yet he has seen his income steadily drop over the last 18 years — down one-third from what it was when he started.
"Everybody understands that doctors are basically small business people, and we have to meet our cost plus make a living." Tolley said. "Just meeting our cost doesn't mean staying in business."
Even more state cuts could be on the horizon. In Maine, Gov. Paul LePage, R, recently proposed removing 65,000 residents from the program, citing a state Medicaid shortfall estimated to reach $221 million through mid-2013. The LePage says he will not consider using a tax increases to make up the difference.
State officials, who are required to balance their budgets, argue they have no choice but to cut into Medicaid after four straight years of budget deficits. With state and federal funds combined, Medicaid makes up 22% of total state spending, the largest single portion of most state budgets, according to the National Association of State Budget Officers.
Critics say the moves are shortsighted.
