Paul Dioguardi, the Health and Human Services Department’s director of inter-governmental affairs, said he was confident states that have been slow so far will be able to catch up, in part by borrowing the models of states that move more quickly.
Also starting in 2014, the federal law will expand Medicaid to Americans with incomes higher than most states have allowed until now. For now, the number of people on Medicaid under states’ existing eligibility rules is straining the ability to pay for them.
Medicaid is a shared financial responsibility of federal and state governments. During the past few years, the nation’s economic crisis has simultaneously depressed states’ revenues and increased Medicaid caseloads. In 2009, to help stimulate the economy, the federal government began giving states extra money for Medicaid. That temporary help runs out this month.
A new report by the National Governors Association and the National Association of State Budget Officers makes clear that the burden of Medicaid on states remains heavy. For the current fiscal year, 43 states have taken action to contain their Medicaid costs. Two dozen have reduced payments to doctors, hospitals or other providers of care; 23 have sought to lower spending on prescription drugs; and 20 have restricted certain services that the program covers.
For the coming year, 45 governors proposed further cuts, the report says, without specifying which reductions were adopted by legislatures. Thirty-three governors proposed to reduce provider payments, 25 to restrict benefits and 21 to require Medicaid patients to pay more for their care.
For instance, in Maryland, where Medicaid enrollment has grown by 11 percent in about the past year to nearly 920,000, the General Assembly has just ordered cuts to the program’s $7 billion budget totaling about 1 percent, according to the state’s Medicaid director, Charles Milligan. The state will reduce by 2 percent its payments to managed-care organizations — the way most of Maryland’s Medicaid patients get care. It will cut by 1 percent the program’s pay to doctors, private-duty nurses and home care aides. And hospitals and nursing homes will be charged a new fee of 2 percent to 3 percent to take part in the program.
Donald Berwick, administrator of the federal Centers for Medicare and Medicaid Services, noted that his agency has been trying to help states find ways to cope with their Medicaid budgets. But, he said, “I think they will be under pressure for some time.”
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