Virginia officials are moving to ban nearly 50,000 indigent patients from the Medicaid rolls and to slash medical benefits to 12,000 children. These reductions are part of a nationwide effort to slow the soaring costs of the federal health care program for the poor.
The human dimensions of the planned cutbacks are outlined in figures put together by the state: At least 800 elderly and bedridden patients would be forced to leave their nursing homes. More than 35,000 aged, blind and disabled people just above the poverty line would lose all their medical benefits. And the 12,000 children from low-income families would no longer receive free hospital care, eyeglasses or other key medical services.
The proposal to end Medicaid benefits for nearly 20 percent of Virginia's 286,000 poor recipients still must go through a day of public hearings, now set for next month. But Virginia health officials say they need to close a $103-million gap between Medicaid costs and planned expenditures over the next two years, and that they expect these reductions to take effect next April. No action by the legislature is required.
What's about to happen in Virginia is reflected to a lesser extent in Maryland and the District of Columbia, as well as across the country. Local officials increasingly are using more flexible rules devised by the Reagan administration to cut back on Medicaid services. Maryland already is declining to pay for Medicaid patients who are hospitalized more than 20 days, while the District of Columbia has decided to cut Medicaid payments to hospital clinics and emergency rooms by as much as 25 percent.
John Buckley is one of the thousands of patients who would lose Medicaid benefits in Virginia. At 58, he has diabetes, is blind in one eye and both his legs have been amputated. He gets $402 a month from Social Security for the years that he worked in the restaurant supply business, but $211 of that goes for his senior citizen apartment in Arlington and the hot meal the building provides every evening. Despite his financial difficulties and medical needs, Buckley is above the welfare line, and therefore the state has the option of eliminating his Medicaid benefits.
"They're taking money from people like myself, who aren't able to do anything," Buckley said. "How can I pay for my insulin and prescription drugs and doctor bills? If I were able to, I'd be out there working, even in a part-time job."
The impact will be felt by more than just the poor. Spokesmen for hospitals throughout the Washington area say the cutbacks will force them to raise their fees for private patients.
All this is part of an effort to slow the phenomenal growth of the Medicaid program, the cost of which has more than doubled from $13.9 billion in 1976 to $33.2 billion this year. The federal government pays about 56 percent of the tab, with the states picking up the rest.
Still, the Virginia cutbacks, which are designed to save $42 million this year, cannot be attributed entirely to the federal budget. Congress ended up cutting the federal share of Medicaid by only 3 percent this year, a net loss to Virginia of just $11 million.
It is the new freedom provided by the Reagan administration that is allowing Virginia to cut the size of its program. Like other states, Virginia still must provide coverage for all welfare recipients and must offer certain services to children and pregnant women. But now the states can eliminate from coverage some of the patients classified as "medically needy" -- those who make too much to qualify for a welfare check, but are still poor enough to receive Medicaid.
Half the states have been providing this optional coverage, but they had to offer the same benefits to all their medically needy patients. Now they can stop covering some of these patients, exclude children over 18, or refuse to pay for certain services.
The states also can devise new methods of payment for doctors, hospitals and nursing homes. And they can limit "freedom of choice" by requiring that Medicaid patients be treated only at certain hospitals, an option now being studied by both Maryland and the District. These alternatives are supposed to give the states more leeway to save money, and they are expected to have a substantial impact.
Joseph Chilcote, 75, has spent the past year at Camelot Hall, a modern, five-story nursing home on Lee Highway in Arlington. A bald, compact man with a stooped walk, Chilcote has had two brain operations and a third on his colon, and he needs continual medication and a special diet. His closest living relative is his sister, Peggy Cockrill, 77, who is confined to a bed down the hall.
Chilcote, who worked for 23 years as a Navy engineer, receives a pension of $1,028 a month -- not enough to pay for his nursing home care, but more than the $500 a month in personal income that Virginia has proposed as the new Medicaid limit for nursing home patients.
"They told me I'll be cut off," Chilcote said. "I'll be out. I don't know where we'd go. We've sold our house and all our friends have moved away. I'm worried and so is Peg."
"You don't get very good sleep thinking about these things," his sister added from her bed. "I'm scared to death that things will get worse under Reagan."
Chilcote is hardly alone, for the new rules would bar Medicaid payments to 40 other patients at the 240-bed nursing home. "Most of these people are in wheelchairs, some are paraplegics, and most need continual supervision and medication," said Bill Fiochetta, the home's administrator. "I hope these people will be given some consideration."
Robert Treibly, director of Virginia's Medicaid program, said there is little the state can do. "We're not particularly enthusiastic about cutting out services to the aged, blind and disabled, but we have no choice," he said.
"We hope they'll get more charity care, that people in their family will help out, and that hospitals will share some of the burden."
But Harley Tabak, who runs Annaburg Manor in Manassas, insists this approach is unrealistic. "They don't understand the amount of care these people need," he said. "Some of these people don't have any family. And some of them have been here 10 years. This is their home."
Tabak says his nonprofit nursing facility could not afford to take care of the 40 patients there who may lose their benefits. If these patients can't pay the average nursing home bill of $1,600 a month, he said, "they would have to go somewhere else."
The state health department says the new restrictions will eliminate benefits for 800 nursing home patients, but industry officials predict that hundreds more could be pushed over the $500-a-month limit once they get their next cost-of-living increase from Social Security.
The state's plan to cut off 35,000 aged, blind and disabled people such as Buckley will affect those whose high medical bills enable them to "spend down" their income to the qualifying level of $3,100 a year. Officials also plan to bar coverage for 4,200 children aged 18 to 21 whose families receive welfare checks from Aid to Families with Dependent Children (AFDC).
Another 12,000 younger children in AFDC families would be covered only for certain clinic services and laboratory tests, but Medicaid no longer would pay if they have to be hospitalized. About 8,000 adults in these AFDC families would lose all their benefits, except for prenatal and delivery services for pregnant women.
Treibly insisted that the changes will stop people from selling off their assets to qualify for Medicaid. As for AFDC children over 18, he said, "they could really get out there and work if they had to."
Last spring, the General Assembly approved some more modest measures, such as limiting payments to hospital clinics to 90 percent of their cost. But the current proposals don't need the legislature's approval, although they must go through statewide public hearings on Nov. 30 -- including one in the Massey Building in Fairfax -- and be signed by the governor.
Last week, the Medical Society of Virginia appealed to physicians across the state to help take care of the nearly 50,000 patients who will lose their benefits, but some health experts question how much free care these doctors will be able -- or willing -- to provide.
Similar questions are being raised in the District of Columbia, which is facing an estimated $10 million Medicaid deficit this fiscal year. City officials say they have decided to cut Medicaid payments to hospital emergency rooms and outpatient clinics by 20 to 25 percent, beginning next January.
At the same time, the city plans to increase Medicaid payments to private physicians from $12 to $20 for an office visit and from $30 to $45 for a complete physical. The idea is to get more poor patients to visit private doctors -- many of whom now refuse to handle Medicaid cases -- instead of going to more expensive hospital clinics.
Lee Partridge, special assistant to the director of the D.C. Department of Human Services, said she hopes the higher rates will persuade more doctors to care for the poor. The other main alternative, she said, would be far more painful.
"The two obvious options in terms of saving big dollars would be to terminate the medically needy, or to terminate coverage of intermediate-care nursing homes," Partridge said. "Or, since we can now pick and choose, we could just cover children.
"But what are you going to do with these people? It would create a real hardship. You can say you're not going to pay for their medical care, but then they just end up in the hospital again. There isn't an awful lot of room to cut. We're in a real box."
But officials at several D.C. hospitals say they are being singled out unfairly. Many say they will be forced to raise their prices, which now average $388 a day, eliminate certain medical services, cut back on clinic hours and lay off part of their staff. And some hospitals say they may have to turn away poor patients for the first time.
"We could lose almost 10 percent of our budget, bang, $70 million, just like that," said Harold Kranz, a spokesman for Children's Hospital, which has long offered a sizable measure of charity care.
"Right now we're looking at everything -- curtailing services, raising rates, cutting hours, all of them. And when Children's starts looking at its open-door policy, you know you're in trouble."
Some experts say that poor patients won't go to private doctors for fear of being turned away, and that few doctors will open offices in poor neighborhoods such as Anacostia, especially at night.
"Our emergency room is the family doctor to the whole community around us," said Jane Snyder, a spokeswoman for Washington Hospital Center. "They don't know any other pattern." She said the hospital eventually may have to consider restricting its charity care to patients from the surrounding neighborhoods.
What's more, said Barry P. Wilson, a spokesman for Blue Cross-Blue Shield here, insurance companies probably would have to raise their premiums to cover the rising hospital fees.
There also is growing concern at D.C. General Hospital, where some private hospitals already send their poorest patients, a practice that many now expect to increase.
"Many patients depend on D.C. General because they have nowhere else to go," said Robert Johnson, executive director of the city's public hospital. "There aren't enough physicians practicing in Ward 7 and Ward 8 to take care of these people. We could lose $1.5 million a year under the city's proposal and we'd probably have to cut back on services.
"And yet, we're the safety net for these people. When you start punching holes in the safety net, people will fall through."
In Maryland, officials have reduced most of their $80 million Medicaid deficit by refusing to pay for hospital stays beyond 20 days. Despite predictions of catastrophe, state health official John Folkemer said the new policy has been a success and that Maryland is paying for 15 to 20 percent fewer days in the hospital.
But Folkemer acknowledged that a few hospitals, which provide specialized care for the whole region, are absorbing most of the burden. "We're still taking care of these patients, who are overwhelmingly in intensive care units," said Ann Jones, a spokeswoman for Johns Hopkins Hospital in Baltimore. "But this policy will cost us $4 million in lost revenues this year, and we can't keep absorbing these losses."
Most of the patients, she said, are premature babies, children who have suffered traumatic injuries and long-term cancer patients.