Friday, February 19, 2010

Proposed Cuts to Maryland Medicaid Threaten Access to Health Care

The following is an editoral comment from Professor Todd Eberly.

As Gov. Martin O’Malley proposes cutting $123 million from Medicaid for the 2011 budget in addition to the $179 million cut from fiscal 2010, a recently published study that I co-authored found that Medicaid has improved access to medical care and reduced racial and ethnic disparities among children and adolescents in Maryland.

Medicaid has proven to be crucial to the health and well being of our children. It provides health insurance for 23 million children every month in the U.S. and nearly 400,000 in Maryland. Unfortunately many states, including Maryland, have had to make cuts to the program in recent years to balance their budgets. According to the Center for Budget and Policy Priorities at least 29 states have made cuts to their public health programs. Given that public health programs like Medicaid and the State Children's Health Insurance Program (SCHIP) account for approximately 25% of a given state's budget (in Maryland it's 27%) it's understandable why they have become the targets of cuts. President Obama's budget proposal holds the promise of additional Medicaid funds for states, but that would be only a one time fix, and in these tight budgetary times there is no guarantee that the funds will be approved by Congress.

In Maryland, the need to close the state's $2 billion budget gap must be balanced with the simple fact that Medicaid has improved the lives of thousands of children.  At a time when access to affordable health care is falling, it would be a shame to see the state forced to make even more cuts to a program so essential to the health of our young people.

Due to federal rules that govern the Medicaid program, the state cannot cut benefits or deny eligibility, doing so would mean the loss of federal money - in Maryland we receive about $0.62 in federal funds for $0.38 in state funds that we spend on Medicaid and our SCHIP (called MCHP). So what Maryland and other states are doing instead is cut reimbursements to providers. In other words, those who provide care for Medicaid patients will be paid less. The net effect of the lower reimbursement will be decreased access to care for folks on Medicaid - including 400,000 Maryland children. Facing the prospect of reduced payments providers will react by seeking to avoid providing care. Though the Maryland cuts target hospitals many physicians may well decide to stop seeing Medicaid patients out of fear that their already low reimbursements will be cut at a future date.

My study also showed that black and Hispanic children in Maryland are more likely to live in areas with fewer providers participating in the program. The continued reductions in reimbursement to hospitals and the potential that this will discourage physicians from seeing Medicaid patients may serve to exacerbate an existing problem. This could undermine the success that Medicaid has experienced with regard to reducing disparities in health care access among children in the state.
The most frustrating part of all of this is that fact that cuts are not needed. There are alternative means by which the state could fill the budget shortfall. One proposal would add an additional $0.10 to the excise tax on alcholic beverages generating $200 million per year. Given the upcoming 2010 election, many members of the General Assembly have said that tax increases of any sort are off the table for the current legislative session - but the proposed cuts to hospital reimbursement rates will be paid for by Maryland taxpayers. According to a report at CenterMaryland the proposal from the state "will allow hospitals to raise the rates they can charge patients with private insurance... to generate revenue to offset the decrease in Medicaid payments." In other words, the Medicaid cuts will be offsett via higher prices charged to the privately insured. Make no mistake, this is a tax, but it's a tax implemented with no political price as no legislator will be forced to vote for it. This approach will not prevent providers from refusing to treat Medicaid patients; rather it sets the stage for the very real possibility that Medicaid patients will suffer reduced access AND the privately insured will pay higher prices for care.
This approach to budget savings amounts to little more than a stunning act of political cowardice that will result in reduced services to those least able to protest while shifting the potential cost to taxpayers in a way that seeks to avoid any political accountability. Marylanders deserve better from their elected leaders.

The paper, entitled “Managing the Gap: Evaluating the Impact of Medicaid Managed Care on Preventive Care Receipt by Child and Adolescent Minority Populations” examined the impact of Maryland's Medicaid program on 260,000 children as the program was expanded during the past decade. The study was published in the Black History Month edition of the Journal of Health Care for the Poor and Underserved.