States consider cuts to Medicaid to ease tight budgets

Several news outlets report on states' efforts to cut Medicaid costs.

The New York Times: For Governors, Medicaid Looks Ripe for Slashing
Hamstrung by federal prohibitions against lowering Medicaid eligibility, governors from both parties are exercising their remaining options in proposing bone-deep cuts to the program during the fourth consecutive year of brutal economic conditions. ... the election of tough-minded governors, the evaporation of federal aid, the relentless growth of Medicaid rolls and the exhaustion of alternatives have made the program, which primarily covers low-income children and disabled adults, an outsize target. ... The governors are taking little joy in their proposals. And many of them, particularly the Republicans, are complaining about provisions of last year's health care overhaul, and of the stimulus package before it, that require the states to maintain eligibility levels in order to keep their federal Medicaid dollars (Sachs, 1/28).

Kaiser Health News: States May Face Showdown With Feds Over Cutting Medicaid Rolls
Financially strapped governors, Congress and the Obama administration could be headed for a showdown over the Medicaid health care program that covers 48 million poor, disabled and elderly people nationwide. Arizona's governor has already asked for permission to drop people from the joint federal-state program, which states say is eating up huge portions of their budgets. But to do so, they need the green light either from Congress or the Obama administration (Werber Serafini and Appleby, 1/28).

The Associated Press/Bloomberg: Nursing Homes, Advocates Warn Of Mass Closures
As the (Texas) Legislature grapples with a revenue shortfall of at least $15 billion — $27 billion by some estimates — one of the most agonizing cuts being proposed is slashed reimbursement rates for nursing homes, hospitals and physicians that offer Medicaid. Advocates say about 550 nursing homes in Texas, serving about 45,000 patients, depend on Medicaid. "We are not crying wolf. Pieces of the sky are falling," said Tim Graves, president and CEO of the Texas Health Care Association. "There's no way the major nursing home stream in Texas can be cut by a third and not cause significant bankruptcies, closures, widespread displacement of patients and frontline health care workers will just be going to unemployment lines in local communities (Castro, 1/28).

Austin Statesman: Medicaid Cuts Could Lead To Higher Taxes, Insurance Premiums
Even if you don't rely on Medicaid, Texas lawmakers' proposed cuts in the health care program could cost you money. Cutting Medicaid could have outcomes beyond fewer services for the poor, several local officials in the health care industry said. Notably, taxpayers in Central Texas could end up with increased local taxes and higher insurance premiums, according to several Central Texas health care professionals. Tom Banning, the CEO for the Texas Academy of Family Physicians, said the proposed cuts don't equate to savings. Rather, there is simply a shuffling of expenses. "This has the potential to be the biggest cost shift to local governments that Texas has ever seen," Banning said (Eaton, 1/28).