States seek ways to balance Medicaid budget, contemplate dropping out of program

Kaiser Health News: "As budget-weary state officials contemplate dropping out of the state-federal Medicaid program, a potentially game-changing question has arisen in Washington: Would poor people who lose Medicaid be eligible for subsidies to buy private coverage in an insurance exchange beginning in 2014? Cindy Mann, director of the federal Center for Medicaid and State Operations, last week said the U.S. Department of Health and Human Services was considering the question. The answer could determine whether states or the federal government will be responsible for the health care of millions of low-income Americans. Currently, states and the federal government share the cost of caring for 49 million low-income people in Medicaid, and the new health care overhaul law is scheduled to add another 16 million beginning in 2014." Legislators who created the law didn't intend to make potential Medicaid beneficiaries eligible for the federal subsidies, experts say (Werber Serafini, 11/15).

CQ HealthBeat: "Texas officials are threatening to drop the state's Medicaid program, and health policy experts at a panel discussion sponsored by House Republicans Monday said that other states facing major budget problems could well be contemplating the same thing once the health care law goes into effect in 2014. Panelists also warned of scenarios in which nearly half a state's population would end up on the Medicaid rolls or states could lose control over who is deemed eligible for Medicaid programs if the federal government establishes a health care exchange. Rep. Michael C. Burgess, R-Texas, said at the session of the Congressional Health Care Caucus that there is already a changed atmosphere in Congress when it comes to the health care law (PL 111-148, PL 111-152), and a new willingness to probe its many details" (Norman, 11/15).

Lexington (Ky.) Herald-Leader: "Gov. Steve Beshear announced Monday changes to save more than $142 million in the cash-strapped Medicaid program over the next two years. The changes include expanding the use of private contractors to run managed health care programs outside of Louisville and are expected to balance the state's Medicaid budget by 2012. The $6 billion program, paid for through state and federal dollars, currently serves nearly 816,000 poor or disabled people. That's roughly one in five Kentuckians. Beshear is asking lawmakers to move $139 million intended for Medicaid in fiscal year 2012 to fiscal year 2011. The savings generated from his plan will create the money needed to run the program in 2012, he said" (Musgrave, 11/16).

The Associated Press/Bloomberg Businessweek: "Despite lavish spending by a Medicaid contractor, Gov. Steve Beshear said Monday he wants to enlist more private-sector businesses and groups to manage portions of the state program that provides medical care for more than 815,000 poor and disabled Kentuckians. Beshear told reporters at a Capitol news conference that contracting with private managed-care organizations could help plug a $100 million deficit in the Medicaid program and prevent cuts to medical services that other states have implemented. Beshear's proposal came a week after the release of a state audit that found Passport Health Plan, a Medicaid contractor serving the Louisville area, had spent heavily on luxury hotels, meals, salaries and lobbying over the past three years" (Alford, 11/15).

The (Baton Rouge, La.) Advocate: Physicians, hospitals and other health-care providers want the Jindal administration to drop its plan to let private insurance companies run part of the state's Medicaid program for the poor. Instead, the groups are working on an alternative provider-directed, patient-centered plan for Louisiana similar to one in North Carolina that has no insurance company involvement. At issue is how the state government should revamp its system for delivering health care for the state's poor. The revamp affects about 800,000 of the state's 1.2 million Medicaid recipients, mainly children under the age of 21" (Schuler, 11/15).

The (Charleston, SC) Post and Courier: "If left unchecked, government-run health insurance for the poor in the state will start draining the cash South Carolina has to pay for its other top priorities, including public schools and law enforcement. The state's Medicaid program is projected to cost $228 million more than lawmakers budgeted to spend on it this fiscal year. And the shortfall at the state Department of Health and Human Services is just a preview of the budget crisis awaiting the state in July. That is when the $1 billion in federal stimulus cash that's propping up this year's $5 billion spending plan runs out. ... Lawmakers said they will have to find some way to balance the books after they return to session in January, cutting unnamed programs and services to keep the Department of Health and Human Services afloat" (Wenger, 11/15).

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This article was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.