by Carol Hubbard
As many states face serious fiscal times in today’s economic climate, they are seeking ways to reduce spending on major social programs. One of the biggest sources of state expenditure is on public health care programs, and specifically on Medicaid. Though better known as a public assistance program for millions of low- income people, Medicaid is also a vital source of health care coverage for millions of people with disabilities.
Currently, federal and state governments fund Medicaid jointly. Through the Federal Matching Assistance Program (FMAP), states receive federal matching funds depending on their population size and per capita income. FMAP is crucial to states in times of fiscal crisis because the funding automatically increases as the state takes on more Medicaid enrollees.
Recently, the Bush Administration and a number of states have started to explore avenues to reform the way Medicaid is funded and administered. President Bush’s 2003 and 2004 budgets proposed reforming Medicaid funding by essentially transforming Medicaid from an entitlement program into a block grant program. The open-ended financing system would end and states would receive one lump-sum payment each year.
These Medicaid reform proposals are detrimental to the disabled population who depend on Medicaid for their health coverage. Under a block grant system, states will have complete discretion in establishing eligibility requirements and determining which benefits to offer. States will also have the freedom to reduce services, while requiring beneficiaries to pay higher premiums and co-pays.
The group most in danger of losing all of their coverage is the “optional” beneficiaries. While states will still be required to provide health care services to “mandatory” populations, those offered to optional populations, namely children, the elderly and people with disabilities, are in serious jeopardy of being reduced or eliminated. Currently, almost 2 million people with disabilities receive health services under the “optional” category with over 66% of Medicaid spending going toward their care. If states are not required to offer comparable coverage, millions of low-income people with disabilities will be without the wide array of health care services they now enjoy under the current Medicaid system.
Florida, California, and New Hampshire have all expressed an interest in transforming their Medicaid programs in this manner. Florida Governor Jeb Bush has been the most aggressive so far in seeking a federal waiver from the Centers for Medicaid and Medicare Services (CMS), to “modernize” Medicaid by accepting a global cap on its Medicaid funding. Governor Schwarzenegger of California plans to present his plan for a Medicaid “redesign” to the state legislature for approval this summer.
Other states have decided not to reform their Medicaid program to save money, but instead are either reducing Medicaid services to beneficiaries or reducing their Medicaid rolls. In May, Mississippi sent out notices to 65,000 beneficiaries, most of whom are people with disabilities, informing them that they were no longer eligible for Medicaid. This month, Tennessee presented a plan that would greatly reduce the medical benefits provided under Medicaid. They seek to limit the number of prescriptions and doctor visits for all beneficiaries.
Unites Spinal Association opposes all of these measures to contain Medicaid spending. These proposals are shortsighted quick fixes that would have a long-term detrimental effect on the millions of people with disabilities who depend on Medicaid’s breadth of services for their health care.
Carol Hubbard is a Health Policy Analyst.
