States take whacks at Medicaid funds

WASHINGTON — States from Rhode Island to California are being forced to curtail Medicaid, the government health insurance program for the poor, as they struggle to cope with the deteriorating economy.

With revenues falling at the same time that more people are losing their jobs and private health coverage, states already have pared their programs, and many are looking at deeper cuts for the coming year.

Already, 19 states and the District of Columbia have lowered payments to hospitals and nursing homes, eliminated coverage for some treatments and forced some recipients out of the insurance program completely.

Many are halting payments for health-care services not required by the federal government, such as physical therapy, eyeglasses, hearing aids and hospice care. A few states are requiring poor patients to chip in more toward their care.

"It's not a pretty list at all," said Michael Hales, the Medicaid director in Utah.

Advocates for low-income Utahns covered by the joint federal and state government insurance plan, are keeping their fingers crossed that state lawmakers convening in January will take Gov. Jon Huntsman Jr.'s lead as they build the state's budget.

Cutbacks to balance the current budget will have to come first, but advocates say now is no time to make cutbacks, not only because a 13 percent increase in the number of people requesting coverage due to the economic downturn but also because federal matching funds of about $3 to $1 in state spending will be lost.

"The governor has taken great care in protecting critical services," said Lincoln Nehring, Medicaid policy director for the Utah Health Policy Project, a health policy research and advocacy group. But it won't hold without Congress, which must pass economic stimulus legislation that includes a temporary increase in the federal medical assistance percentage to help the state, Nehring said.

An FMAP increase will ensure that thousands of Utahns can continue to access the health care they need and the increase will sustain thousands of high-paying Utah jobs, which in turn will help the state get its economy moving again, Nehring said.

During September's special session, $8.5 million in general funds were cut from Medicaid, which resulted in a loss of federal matching funds totaling well over $19 million.

In announcing his budget plan earlier this month, Huntsman said creating more barriers to medical care doesn't make sense at a time when an estimated one in four Utahns generally cannot or won't get health insurance.