Kaiser Daily Health Policy Report Rounds Up Editorial Responses to State Medicaid Budget Shortfalls

The following briefly summarizes newspaper editorial comment on the actions state legislatures are considering to cover growing Medicaid budget deficits.

• Charlotte Observer: Cutting services or reducing eligibility are "bad choices" for solutions to North Carolina's Medicaid budget shortfall, the editorial states (Charlotte Observer, 2/27). According to state health officials, 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 (Kaiser Daily Health Policy Report, 3/6). The editorial says that the "obvious" solution to the budget problem is for the federal government to "provide more [financial] resources and more flexibility" to allow states to alter their programs. In addition, the editorial suggests that Medicaid expenses would fall if the federal government expanded Medicare to cover more home health care costs currently covered under Medicaid. The editorial adds that if the federal government does not make changes, state lawmakers will "have to do the job." The editorial notes that while lawmakers will be hesitant to raise taxes to cover the program's costs, "they should be equally reluctant to cut services or eligibility for this badly needed health care program" (Charlotte Observer, 2/27).
• Dallas Morning News: Short-term "solutions" to covering Medicaid budget deficits are not "tidy," the editorial maintains. At the state level, possibilities for reducing deficits include increasing copayments for services such as prescription drugs and physician visits. The editorial notes that the federal government also could increase states' flexibility under the program and could "pressure" drug companies into offering greater discounts, which is the "best immediate response." But until the financial situation improves, states will need to make "tough decisions," including asking Medicaid beneficiaries to "pay a greater portion" of the bill (Dallas Morning News, 2/28).
• St. Louis Post-Dispatch: Although the nation's governors have "demanded" federal assistance to cover rising Medicaid costs, "[t]hey're not likely to get it," the editorial says. In fact, the editorial asserts that President Bush has been "quietly moving" to limit federal matching funds for the program. In Missouri, for example, federal officials have proposed ending the current funding system, under which the federal government pays a percentage of the state's Medicaid costs. Federal officials have proposed switching to a capitation system, under which the state would receive a flat fee per beneficiary and would be responsible for any expenses beyond that rate. Such a plan, however, would put "hard-pressed state taxpayers" at an even greater financial risk, the editorial says. Noting that Bush has "been quick to talk about compassion and caring for children and the elderly," the editorial concludes that "Congress [must] ensure he walks the walk and comes up with the needed funds" for Medicaid (St. Louis Post-Dispatch, 3/4).
• Tallahassee Democrat: Florida lawmakers need to fund an "important Medicaid program" -- called the Medically Needy program -- because failing to do so would "mak[e] lousy business sense" and would not be "humanitarian," the editorial says (Tallahassee Democrat, 3/5). Florida's Medically Needy program covers uninsured residents who have serious illnesses and do not qualify for Medicaid. To counter increasing Medicaid costs, lawmakers cut the program last year, but later opted to fund it through June 30 (Kaiser Daily Health Policy Report, 2/27). Lawmakers now are reviewing the program, but advocates are "hardly optimistic" that it will receive funding, despite a plan by Gov. Jeb Bush (R) to keep the program. Bush's plan, while preventing the program's elimination, calls for dropping about 25,000 beneficiaries and requiring the remaining enrollees to be responsible for "huge out-of-pocket costs." The editorial concludes that "lawmakers must not lose sight of their responsibility to help those who can't help themselves. Maintaining the Medially Needy program by legislative act does this" (Tallahassee Democrat, 3/5).