The Gutting of Medicaid

A program essential to the health, even the survival of many of our most vulnerable citizens has been targeted for massive cuts by the Bush administration and the Republicans in congress. The poor, the elderly and disabled children will be particularly affected by these cuts and in many states are in a more tenuous situation than ever before. These groups may fare a bit better in North Carolina than in other states, but the possibility of a negative impact looms in the future.

The President's Budget Reconciliation Bill sparked anger when it was first introduced in early 2005. Health care professionals immediately saw the danger signs for the segments of our population who can least afford health care.

Mark Johnson, a family physician in Seattle, wrote a guest column for the Seattle Post Intelligencer in March of 2005. He had this to say:

We have a health care crisis in this country, and something needs to be done about it. Taking people's health care away is not the answer. Thousands of organizations around the nation, including hospital associations, nursing homes, mental health institutions and the Washington Association of Family Physicians, have implored the president and the Senate to reject these cuts. All those organizations recognize that Medicaid offers the only viable, cost-effective solution for millions of families.

Balancing the budget on the backs of our nation's most vulnerable while giving tax cuts to the wealthiest Americans is unconscionable. I urge Washington Sens. Maria Cantwell and Patty Murray to take leadership in the Senate to oppose these shortsighted and unethical cuts.

The House voted on the bill in December and then after changes again in January of this year. The final bill places many of the changes in the hands of individual states, allowing them to raise premiums or reduce coverage as they see fit.

Robert Peterson of Our Spectrum and BlueNC interviewed Verla Insko the state representative from North Carolina's 56 District. "Rep. Insko is eminently qualified to answer questions on potential Medicaid cuts, as she Vice-Chairs the Appropriations Committee; Chairs the Appropriations Subcommittee on Health and Human Services, the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities and Substance Abuse; is a member of the Health, Environment and Natural Resources Committee; and, serves on the Joint Legislative Oversight Committees on Education and Health, where she Chairs the Access Subcommittee of the House Select Committee on Health Care." The information she gave sheds some light on what might happen to Medicaid in North Carolina. Peterson's questions and Insko's responses follow.

With regards to Medicaid, how many North Carolinians use its services? How is that number trending over time?In SFY 2004, Medicaid covered 1.5 million North Carolinians or 17.7% of the state population. Here are the growth rates for the last five years: 1999-2000 3.78% 2000-2001 10.92 2001-2002 2.62% 2002-2003 4.12% 2003-2004 4.50% Growth in Medicaid is directly related to the state of the economy. In some cases it is a leading indicator that the economy is in trouble.

What kinds of people use Medicaid? How many children? How many handicapped children? How many handicapped adults? Medicaid covers certain categories of poor people. In NC, the financial eligibility categories are complex so I will just mention the groups that are covered if they meet the financial criteria: pregnant women and children under 19, families with dependent children and the aged, blind and disabled. See [below] for more in eligibility.In SFY 2004, the state served 870,000 children and 241,000 disabled adults and children (children counted in both categories)

The Federal Budget Reconciliation Bill increases the amount of co-pays, deductibles, and premiums that Medicaid patients must pay. How will this affect North Carolinians? {author note: I would like to thank Rep. Insko for correcting me on this, my interpretation was that the payment changes were made by the Federal Government with other changes left to the state}The Budget Reconciliation bill authorizes states to increase co-payments, deductibles, and premium for Medicaid. These are optional state plan changes that do not require waivers so the changes easier to implement; but, states are not mandated to make changes.

The Federal Bill also eases restrictions on what states must cover, what changes does this allow the state to make? Medicaid has three service levels: the required package, optional services which states add by simply amending their state plan, and waivers which require a review and approval by CMS. The federal action moves some of the required services to the optional package. North Carolina has one of the best Medicaid programs in the nation because we have voluntarily chosen to add many of the optional services and because our Medicaid rates are relatively high. Problems that we can and should address include our general unhealthy life style and unnecessary diagnostic tests. . If the public outcry is strong enough, we can retain our current services.The Budget Reconciliation Act allows states to provide medical assistance through benchmark equivalent coverage and through wraparound services. It also allows states to limit the benefit available to certain categories of people. This is fairly complex. For more details see this document.

Notice that Representative Insko says, "if the public outcry is strong enough we can retain our current services." Why would we need a public outcry when Democrats control both houses of the legislature and the Governor's office in North Carolina? According to Peterson, Medicaid cuts have been proposed before in this state.

....... in the preliminary 2005-06 budget, the Democratically-Controlled, North
Carolina Senate voted to cut Medicaid services for the blind, disabled, and the elderly (Word Document). A strong grassroots effort stopped this from happening, but many of those same Senators, might take Medicaid back to the chopping block again this year. For the Democratic Party to even suggest cutting services for these people is reprehensible. What makes it unDemocratic is that the last time the Senate attempted to cut Medicaid they also put in place tax cuts for the wealthiest North Carolinians and for corporations.

If this can happen in North Carolina imagine how quickly more conservative states will move to gut Medicaid for the poor, elderly and disabled in their states. With an election year coming up it may not happen right away and it may not happen all at once. Small changes can slip under the radar and won't make news, but it's these small changes that can make a difference in the lives of the most fragile members of our community.

Peterson gives a good list of where a state legislature might start cutting or limiting services:

One area that can be limited by states is the Early and Periodic Screening,
Diagnostic, and Treatment (EPSDT) service. This is a program aimed at taking care of our most vulnerable population - children. Included among those are our handicapped and disabled children. The things that had previously been mandatory, which are now optional?
Screening Services -- Screening services must include all of the following services: Comprehensive health and developmental history, Comprehensive unclothed physical exam, Appropriate immunizations, Laboratory tests, Lead Toxicity Screening.
Health Education -- Health education is a required component of screening
services and includes anticipatory guidance.
Vision Services -- At a minimum, include diagnosis and treatment for defects in vision, including eyeglasses.
Dental Services -- At a minimum, include relief of pain and infections, restoration of teeth and maintenance of dental health;
Hearing Services -- At a minimum, include diagnosis and treatment for defects in
hearing, including hearing aids; and
Other Necessary Health Care -- States must provide other necessary health care, diagnosis services, treatment, and other measure described in section 1905(a) of the Act to correct or ameliorate defects, and physical and mental illnesses and conditions discovered by the screening services.
Periodicity Schedule -- Periodicity schedules for Periodic Screening, Vision, and Hearing services must be provided at intervals that meet reasonable standards of medical practice. States must consult with recognized medical organizations involved in child health care in developing reasonable standards
Diagnosis -- When a screening examination indicates the need for further evaluation of an individual's health, provide diagnostic services.
Treatment -- Health care must be made available for treatment or
other measures to correct or ameliorate defects and physical and mental
illnesses or conditions discovered by the screening services.

Early screening is essential, especially for children with special needs. An illness or disability can financially cripple a family that has a good health insurance program. Imagine what it can do to a family with no health insurance. A much worse scenario is one where a family simply does not know of an underlying health issue with their child because they no longer have access to early screening.

According to Dr. Johnson cuts in Medicaid probably don't save as much money in the long run as many politicians would lead you to believe.

Medicaid cuts may be penny-wise but they are pound-foolish. Treating an abnormal
pap smear in the office is much cheaper than treating cervical cancer in the
operating room. Nationwide, Medicaid is one of the most cost-effective sources
of health coverage among both private and public plans. Spending growth in
Medicaid and in private coverage is comparable -- even though Medicaid
disproportionately provides services to individuals who require more and
costlier care.

If cutting Medicaid benefits doesn't save that much money and if it opens fragile segments of our society to even greater risks why would any state consider doing it? Why gut a program that is essential to the health and welfare of our elderly, poor and our disabled children? It's beyond comprehension, but that's exactly what President Bush has proposed while at the same time pushing to make his tax cuts for our wealthiest Americans permanent. Shortly after the 2005 budget was finally passed, the 2006 budget was delivered to Congress. Once again, Medicare and Medicaid are on the block.

Republicans in Washington opened the door, so it's up to us to make sure that our states do not try to gut Medicaid while we aren't looking. Contact your state legislators and let them know you are watching to make sure they don't take away essential services from those who need them the most. Voting for Democrats this fall is a big step toward making sure Medicaid remains available for those who need it, but as witnessed in North Carolina that isn't always enough. Contact your state and federal senators and representatives and let them know that you do not want to put our nation's disabled children at even greater risk.

Update: I failed to provide a link to this WaPo article.