States Targeting health care for low income families to patch up budgets

As the economy remains stagnated and budget deficits get worse for states, Governors throughout the country have begun targeting the health care of low-income families as a way to balance their budgets.

Many states are looking to Medicaid, a federally subsidized-state run program to provide health care for low income families, for savings. From 2007 to 2010 about 8 million people have joined their state’s Medicaid program due mostly to job losses. As part of the stimulus package, states have been receiving additional Medicaid funds for the past two yeas allowing states to avoid eligibility and benefit cuts. Those additional funds are set to expire this summer.

Already states across the country have begun limiting Medicaid services. Arizona has halted coverage of certain organ transplants, Washington has slashed vision and dental services and the Texas legislature is proposing a 29% funding cut to their Medicaid program. Governors are now looking for deeper savings that can be achieved by changing eligibility rules and kicking people out of the program.

However, as part of the 2010 health care reform law, states that cut their Medicaid eligibility before 2014 are ineligible for certain kinds of federal health care funding. All 29 Republican governors have asked the Administration to waive this “maintenance of effort” requirement. These governors have proposed converting the program to block grants to give them the flexibility to take away the health care coverage from low income families. Newly elected Republican Florida Governor Rick Scott told a National Governors Association meeting:  “You give me a block grant, let me do whatever I want, and I will cover the right people,”

Health and Human Services Secretary Kathleen Sebelius has responded that governors should seek to find savings through other means “such as higher co-payments and by purchasing prescription drugs more efficiently.”

-- Wall Street Journal / New York Times / Washington Post / The Hill