Massachusetts, North Carolina Consider Reducing Services, Restricting Eligibility in Medicaid Programs

Under "mounting fiscal pressure," Massachusetts lawmakers plan to begin a "major examination and retooling" of MassHealth, the state's Medicaid program, which represents about one-fourth of the state's budget, the Boston Globe reports. Program costs for this year are estimated at $5.4 billion, a 50% increase over 1998. In the next year, the program is projected to grow by $600 million (Klein, Boston Globe, 3/3). About 300,000 Massachusetts residents have enrolled in MassHealth in the past four years, and state officials predict that enrollment in the program will increase by more than 10% next year. MassHealth covers about one million state residents ( AP/Worcester Telegram & Gazette, 3/4). State lawmakers hope to avoid "major cuts" to MassHealth but said that "there may be no other way to significantly reign in costs." A special state House committee plans to issue recommendations for MassHealth reforms by the end of the month, and acting Gov. Jane Swift (R) will issue a "Med Reform" proposal in the next few weeks. State Senate budget negotiators also are looking to administrative savings, as well as reductions in waste and fraud. In addition, state lawmakers might propose additional copayments and deductibles for some MassHealth beneficiaries (Boston Globe, 3/3).

North Carolina Problems
In North Carolina, Medicaid reform will be the "No. 1 task" for state lawmakers when they resume session in May, the Raleigh News & Observer reports (Gardner, Raleigh News & Observer, 2/22). State health officials told members of a state legislative budget subcommittee in a meeting last week that the program faces a $249 million budget deficit in fiscal year 2003 as a result of increased enrollment and use of services. North Carolina spends about $2 billion per year on the program, which covers about 1.2 million state residents. The cost of the program has increased about 20% per year over the past decade, a rate "much faster than inflation" (AP/Winston-Salem Journal, 2/28). State lawmakers may reduce reimbursement rates for doctors, hospital and drug companies. However, physician groups have warned that a reduction in reimbursements may prompt doctors to "stop accepting Medicaid patients," and drug makers "are lining up to resist" proposals to reduce reimbursements for some prescription drugs under Medicaid. Hospitals have said that they "already operate on the brink of collapse" and warn that reduced reimbursement rates could "lead to deficits and even bankruptcies." State lawmakers also may restrict eligibility for Medicaid beneficiaries, but the move would "raise the hackles" of health care advocates and state lawmakers with large populations of Medicaid beneficiaries in their districts (Raleigh News & Observer, 2/22).