Bobbi Peck, a bouncy and alert 6-year-old from Federalsburg, Md., was born with a cleft palate, a defect in the roof of her mouth that makes it difficult for her to talk.
Although her family could not afford corrective surgery and follow-up therapy, it appeared until a few months ago that their daughter's handicap might be corrected because of the Crippled Children's Program in Maryland, which provides help to parents in paying for expensive medical care.
"She can be a normal child if we can get these operations done," her mother, Patricia Peck, said. "She can have a chance in this world."
But Bobbi Peck's long-term future is no longer certain.Cuts in federal health-care funds may force state officials to revise eligibility standards for the Crippled Children's Program, and the Pecks, whose income is about $10,200 a year, may no longer qualify for any aid.
The Pecks' uncertainty as they try to plan for their daughter's future is one reflection of a profound change in the federal government's commitment to caring for the health needs of its poorest citizens.
In recent years the federal government has become the nation's largest provider of health care, paying more than one-quarter of all costs and devoting one-tenth of its total budget to everything from medicines to surgery. Now for the first time, under prodding from President Reagan, federal officials are questioning whether the nation can afford that commitment and are taking steps to reduce it.
Last year a budget-conscious Congress cut more than $2.8 billion from federal expenditures for health care. More than half came from Medicare, the nonwelfare health program for 29 million aged or disabled Social Security recipients. The cuts mean higher out-of-pocket costs for these people and a squeeze on some doctors and hospitals. The rest of the cuts came from programs designed to aid those below or just above the poverty line, signaling to families such as the Pecks that the days when the federal government could be counted on are over.
On top of the cuts already voted by Congress at the administration's request, Reagan is expected to announce about $5 billion in additional health care cuts in his fiscal 1983 budget message on Monday. As they have in the past, administration officials will argue that "tighter" programs force patients, hospitals and states to be more cost conscious, thereby reducing inefficiency, waste and frivolous use.
For the most part, the current cuts have not meant ending programs, but squeezing people out of them.
In Washington, for example, one part-time worker is trying to rush corrective surgery for her 12-year-old son's legs before the Reagan administration's welfare reductions toss the family off Medicaid. An elderly apartment dweller faces another year's wait for new dentures to replace those cutting into her jaw because fewer federal health dollars mean the city cannot expand its program to care for the 384 already on its waiting list for teeth.
"I'm trying to keep the staff as calm as I can, but we're angry about having to say 'no' to people for the first time," said James Speight Jr., director of East of the River, an inner-city health clinic in Washington supported by the federal government because it serves a poor area with few doctors. He's expecting a 12.5 percent cut in his clinic's $75,000 budget.
Medicaid, the federal-state program that takes care of about 21.5 million poor people of all ages, and costs the federal government and the states $32 billion a year (the federal share is nearly three-fifths), has been the most affected by the cuts. But a $300 million reduction in special grant programs is expected to lead to cutbacks in at least 30 categories ranging from maternal care to the special fund that Bobbi Peck's parents are counting on to pay for their daughter's surgery. See accompanying chart.
At least 1 million people initially will be forced off Medicaid because of changes in basic welfare laws that will make them ineligible for the Aid to Families with Dependent Children (AFDC) program, which automatically qualifies them for Medicaid as well.
The Department of Health and Human Services estimates the new welfare rules would cut Medicaid for 30,000 to 35,000 people in Maryland, 10,000 to 15,000 in the District, and possibly 20,000 to 24,000 in Virginia. In Maryland and the District, officials say most of these people will be able to continue benefits under special provisions for the "medically needy," which help people not poor enough for welfare, but too poor to pay their medical bills. Virginia, however, plans on eliminating its "medically needy" program for most categories of people in an effort to contain state spending.
Officials in other states are also in the position of making do with less, forcing them to make some difficult and emotional choices.
The Reagan administration, in effect, acknowledged the burdens imposed on the states when the president proposed last week making Medicaid a totally federal responsibility. That proposal, which would be contingent on the states shouldering all food stamp and welfare costs, would not take effect, if at all, until October 1983. In the meantime, without considering inflation, Medicaid payments to the states are being cut 3 percent in fiscal 1982, 4 percent the following year and 4.5 percent in fiscal 1984.
In dollar amounts, this means that Maryland, which had 330,000 Medicaid recipients in 1981, would have its federal Medicaid payments cut to $276.6 million from $279.4 million in fiscal 1982. The District, with 127,000 Medicaid patients, will get $99.5 million instead of $102.3 million and Virginia, with 350,000 Medicaid recipients in 1981, will receive $285 million instead of $294 million in the coming year.
The Reagan administration has argued that it is up to the states and private institutions to take up the slack if they choose to. But many states are unable or unwilling to do so. Additionally, states like Virginia are using the federal cutbacks as an opportune time to rein in their own spending on health care, which has been swollen by inflation and growing demand.
Lois Gatewood, of Woodbridge, Va., is one who has been caught by a zealous state response.
There is no safety net for Gatewood, a 73-year-old diabetic with failing eyesight, as she precariously makes her way alongside four lanes of busy traffic on her twice-weekly journey to buy insulin.
She cannot afford the $4 cab fare from her trailer home and rarely can find a neighbor with a car to drive her. And, as she discovered when she collapsed in the drugstore one day recently, the Reagan administration's budget cuts mean she cannot afford the tiny $9.40 bottles of life-sustaining medicine either.
"What's people like us going to do?" agonized the sobbing woman, who swooned into a chair at the store out of weakness and anxiety over payment when she learned her Medicaid card no longer was honored and she would not be eligible for the state's medically needy program.
Gatewood lives on a bare bones, $388-a-month budget from Social Security, scrubbing all her clothes by hand and forgoing the use of her oven because she can't afford to repair it. A friend owns the trailer and lets Gatewood occupy it as long as she pays the $145 monthly lot rent and the fire insurance, a bill she has been unable to pay for three months.
Her Medicaid card first was pulled in July, when the annual Social Security cost-of-living increase inched her over the eligibility cutoff. She then was partially covered by Virginia's medically needy program, which paid for her medicine after she spent $300 of her own money, which took her four months to achieve. But now that help, too, is vanishing.
"We have no hidden resources that we can reach into," declared Dorothy Herman, a paralegal for the elderly in Manassas, who spends her days trying to explain to Gatewood and others in desperate financial shape why they can no longer depend on the government for help. "We can't give people the name of some magic church fund. All Lois knows is that she's had episodes of passing out in diabetic coma and she's not going to have enough money for insulin."
Besides eliminating the needy program, state officials have also been making basic cuts in the Medicaid program.
Hundreds of Virginians have been sent letters from nursing homes requesting that they begin taking care of their elderly relatives this spring when the aged residents are dropped from Medicaid rolls because of stricter eligibility. Virginia is taking these actions, not merely to absorb the federal cut, but to reduce its own outlays as well. Maryland and the District of Columbia expect to absorb the cuts at least for this year and make do without service reductions.
All three jurisdictions, however, will be hit hard by losses for the grant programs.
Although in dollars the Medicare and Medicaid reductions are the largest component of the health cuts, the slashes in the special grant programs will have a particularly harsh impact on the poor, especially in the inner-city areas.
The special grant programs are "the cutting edge" of health care for the poor and disabled who cannot benefit from private health insurance, according to Richard Hegner, special assistant to Maryland Secretary of Health and Mental Hygiene Charles Charles R. Buck Jr.
Many of these programs are designed to help people who are poor, even desperately so, but for a variety of reasons don't qualify for Medicaid; others are for people who are not quite poor enough for Medicaid. Health experts at the Department of Health and Human Services have testified before Congress that, in fact, between 14 million and 17 million people in the U.S. who are under the poverty line are ineligible for Medicaid.
Many are being served by these special programs, which include federal grants to the states and localities or to special health groups for clinics where low-income pregnant women can get pre-and-postnatal treatment and infant and pediatric care for the child; special centers for surgery and other remedial treatment of handicapped children; programs for pregnant adolescents; programs to combat hemophelia, sudden infant death, genetic diseases, lead poisoning, drug abuse, alcoholism and mental illness; money to put health-care clinics in neighborhoods where there are few doctors, and grants for family planning.
In general, the cuts are 20 to 25 percent of the 1981 program levels, but if certain one-time grants to research and other health institutions within Maryland and the District are counted they appear much larger.
Maryland health secretary Buck told a congressional committee that the cuts will mean "a cut in programs for high-risk pregnant mothers at a time when our infant mortality is the 12th worst of all states in the nation . . . a cut in drug-abuse programs at a time when we are experiencing a real and frightening heroin epidemic."
Hegner, his aide, said in an interview that the grant cuts would affect mainly Baltimore because that's where the bulk of poor, unserved people are in the state. Hypertension centers, crippled children's centers, maternal and child health clinics, all such would be threatened.
Bill Harton, assistant commissioner for administration of the Virginia Department of Health, said most of the federal cuts would not have any impact until next July 1 when the state's new fiscal year starts.
But he said officials already are tentatively planning to reduce family planning services, trim services to crippled children, freeze or shift employment in a number of programs.
Dr. R. Dale Hunsacker, director of the Virginia division of family health services, said, "We are cutting back on some services but we have no hard data yet. In maternal and child health, some will simply have to be absorbed by the private sector. We'll go back to the days when doctors and hospitals served people free."
One federal program that will be affected provides funds to open clinics in medically underserved areas--areas that lack doctors and medical centers. Generally, these are extremely poor areas, often in the inner city, but they may also be rural areas without physicians. Nationwide, nearly 900 are being funded.
Now, with program money being cut, HHS is reclassifying about 90 areas that have centers to eliminate them from the program. In Washington, three centers, Shaw and Upper Cardozo, which are linked, and East of the River in Anacostia will not be shut down, according to HHS officials, but all are likely to suffer some loss of federal funding because the money for this program is being cut nationwide from $327 million in 1981 to $248 million in 1982.
City hospitals and clinics will be affected by cuts in both Medicaid and the block grant program.
Children's Hospital in Washington, for example, is going to lose large amounts of money under the federal reductions and has begun scratching elsewhere for revenues.
Clinic services within hospitals are the first target. Children's Hospital is trimming services in dentistry, psychology, social work, staff training, the facility's chaplain program and the sexual abuse team.
"There are no more ways to twist and lean to make up this deficit," said hospital spokesman Harold Krantz, who said the hospital is sliding deeper into debt to keep its 110-year-old open-door policy alive. The hospital predicts a $1.5 million yearly loss from the new Medicaid cuts, which will be added to its $5.5 million customary debt each year.
In response to the federal cuts, the hospital has expanded its collections department, requiring payment up-front from overseas patients, among other items.
Mercy Hospital in Baltimore says it will have to absorb $400,000 in Medicaid cuts or force infants being treated to face "certain death" by removal from the hospital after 20 days of care. The hospital's board of trustees, from a separate endowment, also has been supporting three community health clinics at a cost of $350,000 a year; but now that the hospital faces huge losses on Medicaid, it may be unable to keep supporting the centers.
Even a hospital with no special charitable mission may be adversely affected by the Medicaid and Medicare cuts in reimbursements for hospital care. The Fairfax Hospital Association, which runs three nonprofit hospitals in Northern Virginia (Fairfax, Commonwealth and Mount Vernon) gets about 28 percent of its billings from Medicaid and Medicare, below the national average for hospitals of 33 percent.
Hospital officials estimated that a cut of 10 percent in Medicare-Medicaid payments would cost them $2.4 million and force them to recoup the costs by raising daily fees by $19 for non-Medicare-Medicaid patients.
As with other budget areas, federal officials hope that the private sector will pick up the slack. In many cases, the reduction will make private services more expensive. Because hospitals are getting less revenues from the government for people they feel obligated to continue serving, rates may rise for the private patients. A corresponding jump in private health insurance is forecast, as more of the burden shifts to those holding policies.
But just as Gatewood, the diabetic Virginian, cannot find private help to pay for her medicine, private health-care facilities aren't able to take up the slack from the federal cuts.
"This is the big fallacy with Reaganomics," said Betsy Finley, a volunteer at the Washington Free Clinic, which has had a one-third increase in patients since Oct. 1, the date the federal budget cuts took effect.
"Look at us," she said, pointing to the threadbare couches and makeshift cubicles full of aged equipment set up in a church gymnasium. "We can't begin to handle anyone extra."
Still, clinics such as hers in many cases are the only alternative for low-income patients no longer able to receive the same level of care.
James Payne, 72, of Northeast Washington, for example, used to depend on a Veterans Administration hospital for his monthly high-blood pressure medicine and treatment, but was told recently he was being "transferred" to the Zacchaeus Clinic, an inner-city "free" clinic on N street NW, because of overcrowding.
The basement facility, located next to a burned-out building, operates two days a week with cast-off medicine, a "wish list" of supplies taped to the waiting-room wall and one volunteer doctor.
"It's ludicrous for the federal government to be sending people to us," said Pam Lucas, one of the clinic's coordinators. "We've had to turn away people since October because we don't have enough money to see them."
The clinic managed to add Payne to its load, but the switch has been traumatic. He lost his ride to the doctor, as he previously begged transportation from a neighbor who also used the VA hospital. Managing the two long bus rides across the city is exhausting, and fears over the rough neighborhood made his medical condition worse, he said.
"The attendants are very nice, but you don't know whether you'll come out of that environment alive," the former ambulance driver and Navy reservist said. "It's terrible when it's dark, with all those prostitutes around and men hanging around the porches. I don't have a choice, though. It's my medication or my life."