Unites States facing sudden decline inthe tax revenue amid the pandemic are announcing deep cuts to their Medicaid programs just as millions of newly jobless Americans are surging onto the rolls.
The state officials are worried that they’ll have to cut benefits for the patients and payments to health providers under the safety net insurance program for the poor unless they get more federal aid.
State Medicaid programs in the last economic crisis cut everything from dental services to podiatry care — and reduced payments to hospitals and doctors in order to balance out spending on other needs like roads, schools and prisons. Due to Obamacare’s expansionin recent years, program enrollment has increased largely asper the Medicaid officials
Matt Salo, the head of the National Association of Medicaid Directors said, “The looming crisis facing Medicaid programs “is going to be the ’09 recession on steroids. It’s going to hit hard, and it’s going to hit fast.”
Medicaid programs, among the largest budget items in most states, provide health insurance to roughly 70 million poor adults, children and people who have disabilities or are pregnant. The federal government on average pays roughly 60 percent of program costs, with poorer states receiving a higher share. States have the latitude to adjust benefits, payments to health care providers and eligibility requirements with oversight by the federal government.
Medicaid naturally faces heightened demand as economic conditions are worsen. But that leaves states facing more need at the same time that they have less money.
Ohio Gov. Mike DeWine, a Republican, said Tuesday,“The cruel nature of the economic downturn is that at a time when you need a social safety net is also the time when government revenues shrink,”
Last week, the majority of a $229 million spending cut made by Colorado Democratic Gov. Jared Polis came from Medicaid, though new federal funds will forestall an immediate reduction in benefits or payments to health providers. State legislative committee staff has warned Medicaid enrollment there could spike by 500,000 by the end of the year.
The portion of state budgets devoted to Medicaid spending has grown quickly since the last recession, making it a riper target for cuts. Medicaid spending on average accounted for 15.7 percent of state budgets in fiscal 2009, a number that jumped to 19.7 percent in fiscal 2019.
Medicaid enrollment data in some states often lags, making it difficult to determine how much national sign-ups have climbed since jobless claims began surging two months ago. Some states have begun to report notable surges, however, and larger increases are expected in the coming months.
Arizona in the last two months saw 78,000 more people enroll in Medicaid and the Children’s Health Insurance Program, which receives more generous funding from the federal government. Virginia has seen a 20 percent increase in enrollment applications since mid-March.
In New Mexico, where 42 percent of the population was already enrolled in Medicaid, sign-ups in the first two weeks of April surged by about 10,000 more people than expected before the pandemic.
New Mexico’s top Medicaid official said the budget is a significant concern for a state heavily reliant on oil and natural gas. She worries a prolonged economic downturn could force the state to roll back pay increases to Medicaid providers enacted last year, and another planned pay raise for next year is almost certainly off the table.
States that accepted the temporary Medicaid payment increase from Congress are barred from cutting back enrollment while they’re receiving the enhanced funds. That leaves states with the option of cutting benefits or provider payments to find Medicaid savings, which could ignite fierce brawls in state capitals.
Michigan state Rep. Mary Whiteford, the Republican chairwoman of a health care appropriations panel, said the state’s Medicaid enrollment could increase from 2.4 million to 2.8 million by the end of the year.
Brian Sigritz at the National Association of State Budget Officers said, “Before the pandemic, states had socked away $72 billion in rainy-day funds but that figure was easily dwarfed by the $150 billion Congress provided to state and local governments in an earlier package, and it’s far short of what states are now demanding.”
Further added, “Now, we’re looking at greater declines than what we saw during the Great Recession and increased spending, If there aren’t more federal funds, states will have to look at cutting funding for key services: public safety, education, health care. That’s where the money is.”
Pic Credit: https://www.caring.com/caregivers/medicaid/