States Cut Medicaid Coverage Further

Among the states with the gravest financial problems -- and pressures on Medicaid -- is California. In July, Medi-Cal, as the program there is known, slashed by 10 percent the rates it pays hospitals, nursing homes, speech pathologists and other providers of health care. It tried to lower payments to doctors and dentists, too, but they have sued to block the decreases.

Gov. Arnold Schwarzenegger (R) has asked the state legislature to approve other cuts, including an end to dental care for adults, about 1 million of whom use it now, and a sharp reduction in care for recent immigrants.

At two hospitals run by NorthBay Healthcare, midway between San Francisco and Sacramento, about one patient in five is on Medi-Cal. The rate cuts translate into a $4 million loss this year. In September, the health system closed a rehabilitation program for children that provided physical therapy, speech therapy and other help to about 300 young patients at a time -- with 100 more usually on the waiting list.

"It was heart-wrenching to have to go out and announce," said Steve Huddleston, NorthBay's vice president of public affairs.

The strain has spread through the Washington area. The District's Medicaid rolls have risen by 5,000 in the past year to nearly 150,000. To cope, the District made $20 million worth of changes to the program and a separate fund for people who are uninsured, including postponing an increase in payments to primary-care doctors.

In Maryland, Medicaid enrollment has jumped by 8 percent in the past year, and the state has pared $82 million from the program for this year, reducing planned increases in payments to nursing homes, managed-care organizations, private nurses and home health aides. With a larger state deficit forecast for next year, Gov. Martin O'Malley (D) is expected to propose deeper cuts in his budget next month, probably including a lengthy delay of the state's biggest Medicaid expansion in years: a planned extension of coverage to 100,000 parents and other adults.

In October, Virginia eliminated a small fund for indigent patients. For the coming year, Gov. Timothy M. Kaine (D) has just proposed $245 million in cuts from the nearly $3.3 billion that the commonwealth devotes to Medicaid, including reduced payments to hospitals and new limits on home health care.

Rhode Island's approach has been the most far-reaching to date. This week, it announced an agreement with U.S. health officials that would, if the state legislature consents, change the entire financial basis of the program. The state would forfeit its Medicaid entitlement and accept a total of $12 billion in federal money over the next five years. In exchange, Rhode Island would win uncommon freedom from federal rules, allowing it to enroll all its Medicaid patients in managed care, cover less treatment and expand care for elderly patients at home, instead of in more-expensive nursing homes.

In South Carolina, Medicaid officials last week announced the third round of cuts since August. They are "real unpleasant stuff," said Jeff Stensland, spokesman for the state's Department of Health and Human Services. The program will stop paying for most dental care for adults, eliminate nutritional supplements, cut home-delivered meals from 14 a week to seven, curtail mental health counseling, stop building wheelchair ramps and pay for fewer breast and cervical cancer screenings.

Edna McClain, founder of Hospice Care of Tri-County in Columbia, S.C., helped coax state health officials to expand Medicaid to cover nursing care and other support for dying patients in the mid-1990s.

She was stunned this month when an e-mail arrived from South Carolina's Department of Health and Human Services informing her that as of Jan. 1, Medicaid no longer would pay for new hospice patients. And after March 31, it would stop covering most people on Medicaid already in hospice care.

With a $500,000 hole in her budget, she worries about how to care for low-income hospice patients, including a 47-year-old man whose weakened body is dangerously retaining fluid as he awaits a liver transplant.

The day after she received notice from the state, McClain composed a letter and fired it off to 107 state legislators. "They can at least hear from me," she said. But she knows, she said, her protest is too late to make a difference.

Staff writers Chris L. Jenkins, Lisa Rein and Nikita Stewart contributed to this report.