Budget season was supposed to have ended last week for all but four states, but a record number of legislatures went into overtime as fiscal chaos reigned. One thing for sure is that when the dust settles, the nation's uninsured population will have risen by more than 1 million.
Despite an infusion of $10 billion through the federal tax cut law, a profusion of new waivers and previous cuts in eligibility, state Medicaid programs remain in shambles. The state share of the program rose some 8% in fiscal 2003 and may grow 5% in 2004, according to the National Governors Association and the National Association of State Budget Officers. Cuts undertaken last year and set to take effect this year will have a serious effect on hospital emergency rooms, doctors' reimbursements and nursing homes' futures. Worse off, of course, are the poor people who no longer have access to healthcare.
Before the 2004 budgets went into effect, 37 states had enacted emergency spending cuts of $14.5 billion during fiscal 2003. States continue to cut funds across the board, including Medicaid. The program remains the fastest-growing part of state budgets, the result of rising prescription drug costs and growing numbers of beneficiaries. Many joined the program because of the slumping economy, while others were added in the 1990s as the program was expanded by states eager to cover more of the uninsured.
The effect on providers is significant to put it mildly. In California, home to the worst fiscal crisis-an incredible $38 billion deficit-the state already has stopped making Medicaid reimbursements while legislative activity has ground to a halt amid partisan bickering. Half of the state's hospitals have some form of long-term-care services, which stand to take a $65 million hit. In 2002, the state's hospitals provided $3.6 billion in uncompensated care, and that surely will rise under any budget scenario that plays out.
In Pennsylvania, Children's Hospital of Philadelphia alone stands to lose $9 million this year from a $250 million reduction in Medicaid in that state. Hospital officials were pressing Gov. Edward Rendell to tap the state's share of the increase in federal matching funds made available as part of the federal tax cut package, but the state had no budget at deadline.
In Texas, the final budget plan slashed eligibility for the State Children's Health Insurance Program by so much that 169,000 children from low-income families will lose their coverage within two years, according to the Center for Budget and Policy Priorities, a Washington-based advocacy group. Texas also trimmed funds for home care under Medicaid by 15%.
In Tennessee, eligibility changes would drop more than 200,000 needy people from Medicaid. In Oregon, 100,000 would lose coverage.
Meanwhile, President Bush continues to press for his Medicaid reform proposal, an effort to give states even more flexibility to shift funds within Medicaid in experiments designed to save money while covering as many people as possible. The 10-year plan calls for an increase in federal contributions for several years through a flat payment instead of a match, after which funding would actually decline.
At the same time 1 million people are losing all Medicaid coverage, states are cutting critical services for those who remain, which will only cost the healthcare system more in coming years. Many, for example, are paring dental services for children. That may not sound significant, but consider that poor oral health has a significant effect on overall health, development and learning.
It makes you wonder about the priorities of a nation, when it can afford tax cuts for those who have access to the healthcare system but can't even pay for basic coverage for those who need it most.