The Editors
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Medicaid, the health and long-term care coverage program for low-income Americans, faces drastic changes that could have profound consequences for both the old poor and the newly poor. Medicaid is jointly financed by the states and the federal government. In an effort to balance their budgets, states are considering deep cuts into the primary safety net for some of the nation’s most vulnerable people, including the elderly and disabled. Among these are formerly middle-class people who have turned to Medicaid for help after losing their jobs and their insurance in the economic downturn. The complex health care bill that is expected to be voted on as this editorial goes to press raises reimbursements but does not adequately address long-term underfunding of Medicaid.

Congress will be considering how best to handle this difficult issue in the weeks ahead, as time runs out for renewal of the American Recovery and Reinvestment Act, last year’s economic recovery legislation, which extended federal stimulus support for state Medicaid programs. The act expires on Dec. 31. In exchange for receiving these funds, states have agreed not to stiffen eligibility requirements. But if the Recovery Act legislation is not extended, deeper cuts in state budgets could cause hundreds of thousands to lose their Medicaid benefits entirely, and eligibility requirements could be tightened. With the 2011 fiscal year beginning this coming July, about half the governors have assumed that fiscal relief may not be forthcoming from the federal government and are consequently proposing draconian cuts.

In a report released in early March, the nonprofit Center on Budget and Policy Priorities cited the example of Arizona’s governor, Jan Brewer, who has proposed dropping 310,000 recipients from the state’s Medicaid program, including several thousand patients with mental illness. Similarly, the governor of California, Arnold Schwarzenegger, is contemplating slicing a quarter of a million people from that state’s program. Both governors, moreover, are also considering complete termination of their states’ children’s health insurance programs if expanded federal aid is not forthcoming this December. Such a move would end coverage for over a million low-income children if Congress fails to act. Moves of this magnitude would undermine the very concept of state-federal cooperation on which Medicaid is built.

The Budget and Policy report notes that during a recession, as people lose their jobs and private health coverage, the number of people who become eligible for Medicaid increases greatly. The Kaiser Commission on Medicaid and the Uninsured has found that between June 2008 and June 2009, enrollment grew faster than in any period since the program was created in 1965. Over 3.3 million more people were added in the year between June 2008 and June 2009. Every state had increases in enrollment, and 32 grew twice as fast as in the year before. Sadly, however, at the very time that Medicaid is most needed, states are weighing the possibility of sharp cuts as they struggle to balance their budgets in the face of falling revenues caused by the weak economy.

A number of states have already cut benefits in some areas of service that they formerly provided. Thus Michigan, Nevada and Utah have ended coverage for dental care, for eyeglasses and other ancillary services. Almost 40 states have also reduced or frozen reimbursements for hospitals and nursing homes. Tennessee’s governor has gone so far as to cap inpatient hospital reimbursements at $10,000. Moreover, with Medicaid reimbursement rates already far below those of Medicare, some doctors are refusing to accept more Medicaid patients. Compounding the overall problem, many states have cut their Medicaid administrative staffs, even as the number of applications has increased dramatically.

Because of the recession, the crisis is already at the door. It is clear that without more federal support many states cannot afford to continue the Medicaid they currently offer, which in many cases is already inadequate. How then can health care reform succeed when current proposals require states to accept 15 million more Medicaid recipients by 2019, while full federal support for that expansion will wind down by 2017? A funding formula must be devised that will not only accompany states through this immediate national health emergency but will also establish a credible, long-term structure for Medicaid funding that ensures the program’s reliability even during times of economic distress.

An increase in taxes for the wealthy and for corporations is inevitable, and a serious reduction in defense funding must be undertaken to bring the national accounts into balance. Until those politically difficult steps are taken, health care for both poor and middle-class Americans will remain in a state of permanent crisis. In the short term, however, the Recovery Act must be renewed with a view to propping up the Medicaid system.

Comments

lLetha Chamberlain | 3/22/2010 - 11:19pm

As a veteran forty-year RN-and having worked in all types of healthcare in several cities in this country... as well as having subjected to "modern medicine" extensively as a patient... I note that since American's (and this at one time included myself) are not willing to learn to eat properly and in healthy amounts, want to take medicine for every ache and pain-and go to the doctor for it expecting such (medicines are the cause of many problems for which doctors give even more medicine and testing),,, having once had twenty official dx after having been in a 1 million dollar-loss motor vehicle accident (hit by an uninsured driver-from whom there were no funds to "sue") so all the costs were shouldered by both my insurance, as well as my funds (I was in a rehab unit for two years)-I now know the depth of issues surrounding all.

We take medicines for EVERYTHING-wrong, wrong, wrong!  Off all the meds I was on (but it has to be done by someone knowing what to do!), now I only deal with my orthopedic problems and feel like a new woman.  I take no pain meds, but rely on both nutritional knowledge and occasional American herbs.  My 104y/o great aunt, a graduate of my nursing school decades prior... said to me the secret of her longevity was: "I use food as medicine"... and never took any medicine at all during her lifetime.  Since my medicines had been costing $1400/mo-I was extremely eager to divest myself of them... for they were causing heart problems, fibromyalgia, asthma, severe pain in all joints and muscles, gastric reflux disease with esophogeal spasm, severe cramping in legs and feet (so that I could bearly sleep), hypothyroid, sleep apnea, irritable bowel syndrome, weight gain... etc. etc-all deleterious effects of medicines, as it turned out.  I also found myself (very unlike mild-mannered me) beginning to lose my temper at nothing, impatient, restless, and ended up toxic on my thyroid replacement (which had been increased 50% six months prior to all this).  I had continually for three years been telling the docs my issues were due to medicines-and continually ignored and mocked.  I was considered a "complex patient"... my word, it was all so easy in the end (and I am not complex at all).  Because of my experiences, I am working with the Regional Medicare-Medicaid Director to look into the issues of the chronically ill... to stop the waste and fraud being perpetrated on American taxpayers by the drug companies, the compliant physicians and hospitals, and proclaiming to my fellow American's "get off those meds and eat properly."

RICHARD KUEBBING | 3/21/2010 - 12:30pm

Medicaid and Medicare and Social Security are underfunded.  But they are part of a long standing Congressional tradition of unfunded or underfunded entitlements.

In isolation, each appears fixable with just some more funding.  Taken together they represent bankruptcy - financial and ethical.

The point is fast approaching when we will no longer be able to steal money from our children and grandchildren.  We have reached or are about to reach the tipping point where moneys collected now are insufficient to fund today's expenses for Medicare.

C Walter Mattingly | 3/20/2010 - 3:56pm

Raise corporate taxes to pay for medicaid? Is America even aware that the US right now has the second highest corporate tax rate in the nations of the developed world, second only to Japan? And that may be one developed nation in worse deficit shape than the US. Does America know what state has the highest income tax rate for high earners in the US? Yes, California. And that is the state in most danger of default on its sovereign debt. That is where exhorbitant tax rates on corporations and the most talented will take us: accelerated economic decline.

Fact is, we are going to have to tax the middle class entitlements to pay for some of these needs. Good luck with that. When Obama proposed to tax only those family insurance benefits that exceeded $24,000, which is about the total annual income for a family of 4 at the poverty level breakpoint, the unions defeated this attempt to tax their cadillac benefits. No, at some point we have to recognize the contribution that the middle and upper middle class must pay: in addition to taxing the cadillac health plans, also all tax deductions on mortgage interests on McMansions and half a million plus mortgages, etc. The class warfare idea of soaking the rich will not take us far enough and in the end will contract our economic growth.

THOMAS FARRELLY | 3/20/2010 - 12:34pm

Yes, Medicaid is in trouble, as is Medicare, and it seems we are about to add millions of people to Medicaid while supposedly taking half a trillion dollars away from Medicare.

Is it not obvious even to the editors of America that we cannot continue to import poverty from Latin America and the rest of the Third World?

E.Patrick Mosman | 3/19/2010 - 2:52pm

On a recent visit both of my doctors, one a specialist, advised that if the Obamacare bill with its draconian cuts in Medicare passes they will be forced to stop accepting new Medicacre patients and will begin phasing out their current patient list. Both stopped accepting Medicade patients some time ago as the reimbursement rate is less than $10.00 per visit. One is considering leaving the medical profession and going into medical research. Having lived in four European countries with socialized medical care what one has leaked out about obamacare seems to have taken the worst of each. The challenge is to name one federally run program that is cost effective, efficient and competitive, Medicare, Medicade and Social Secuurity are already bankrupting the nation and the States, the Post Office would be in Chapter 7 if it was an exchange registered company and the DOE and EPA are preparing to impose theri own draconian regulations which will seriously. impair if not destroy the American economy.

As Norman Thomas , the long time Socialist party Presidential candidate predicted: "The American people will never knowingly adopt Socialism. But under the name of 'liberalism' they will adopt every fragment of the Socialist program, until one day America will be a Socialist nation, without knowing how it happened."

TM Lutas | 3/19/2010 - 1:58pm

As Catholics, bottom line we must have an adequate provision for the poor and we are not wealthy enough to do so. We can lie to ourselves and pass laws and allocate funds we don't actually have but that's simply not christian charity. It's delusion and this editorial is a symptom of this culture of delusion. 

When we governmentalize solving a problem, we gain certain benefits, universality being chief among them. But with that universality comes painful costs, chief among them poor cost control and poor rates of improvement via innovation. After a few decades, we end up worse off than if we had not kicked private provision off the scene and replaced it with a government solution. This is the phase that we find ourselves in with Medicaid. 

My MD wife prefers to provide charity care than to go through Medicaid's bureaucracy. A lot of doctors do. The reimbursement rates are so low that it's less painful to simply let the money go than to deal with the system. But the reimbursement rate is so low because we aren't rich enough to provide decently for the poor's medical needs. The money isn't there and the tax rates needed to pull in those kind of funds are economy destroyers. 

So the middle class who don't pay much attention think that the problem is solved when it isn't. The government feels good about itself. It's got a program after all and that will manage things so not too many people will die unnecessarily. And good christians with inferior economic education are roped in to advocate tax after tax to pay for a program that is broken by design and is just not going to get fixed until it is replaced by something sustainable. 

Medical care provision for the poor needs better than being shunted off to a Medicaid ghetto. Catastrophic coverage via subsidized or wholly paid for insurance and subsidized health savings accounts whose savings do not impact their eligibility for further aid would put the poor on an even footing and educate them to shop for a good deal, allowing societal help to stretch further and help more people. Unfortunately that sort of sustainable and truly charitable approach does not compute with this editorial board. 

Christopher Scott | 3/19/2010 - 12:34pm
So how much money did we dump in Iraq and continue dump in Iraq & Afghanistan? Where is the fiscal conservative outcry for this incalculable borrowed deficit spending for these ill-advised efforts? Where is the payback and what are the benefits for this enormous cost to the American taxpayer? There is no doubt that the cost of that war as well as the unchecked greed on Wall Street which created the real estate and commodity bubbles have left this country (and the world) with this huge financial mess.

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