Iowa Republican Lawmakers Decline to Back Governor’s Proposal for Eliminating Medicaid Shortfall

Iowa Republican leaders said on Jan. 8 they will not support Gov. Tom Vilsack's (D) plan to use funds from several existing state accounts to cover an $18.4 million spending shortfall in the state's Medicaid program by Feb. 1, the Des Moines Register reports. Vilsack sent letters to lawmakers this week seeking support for his plan, which would divert money from a trust fund for the elderly, tobacco settlement money and an account to buy new state police cars. The shifting of funds would cover the $18.4 million reduction, which must be undertaken following a 4.3% spending cut "imposed on Medicaid as part of an across-the-board trimming" of the state budget. But Republicans said "tougher measures" -- possibly benefit cuts or enrollment reductions -- were needed to shore up the future of the Medicaid program and that Vilsack's plan would yield "only short-term" benefits. The program is currently running a $25 million deficit, exclusive of the required reduction. "We are saying at this time we don't think his idea is the best alternative. We haven't discussed how we're going to solve the long-term problem," Senate Majority Leader Stewart Iverson (R) said, adding, "It's not going to be pleasant. But when we don't have the money, what are we going to do?" Vilsack, however, said the alternatives to the proposed plan were "risky," including eliminating Medicaid coverage for 4,000 beneficiaries whose incomes slightly exceed the eligibility limit, cutting optional services such as dental and eye care and "reducing support" for nursing homes. "I sincerely hope [legislative leaders] would recognize the consequences of not doing this, which is that families are going to get hurt and providers are concerned about the low level of reimbursements," he said (Santiago, Des Moines Register, 1/9).

Panel Looks to Provider Cuts
Meanwhile, a panel from the state Department of Human Services on Jan. 9 proposed a 13.2% cut in Medicaid reimbursement rates to providers in order to produce the $18.4 million in savings, the Register reports. The panel said the move, which would begin Feb. 1, was made "reluctantly and in protest," but that their options were limited. The panel, however, did reject any elimination of coverage for beneficiaries. Human Services Director Jessie Rasmussen said the panel, which will hold a final vote on Jan. 16, hoped that lawmakers would later restore the reimbursements to providers. But doctors said the cut could lead many to stop taking Medicaid beneficiaries or to go out of business (Santiago, Des Moines Register, 1/10).