Medicaid, Mental Health Services Face Cuts Under Massachusetts Democrats’ FY 2003 Budget Plan

Massachusetts House leaders on April 25 unveiled a fiscal year 2003 budget proposal that would cut funds for human services programs by 10%, impacting the departments of Mental Health, Mental Retardation and Social Services, the Worcester Telegram & Gazette reports. The Democrats' $21.3 billion budget plan would cut overall state spending by $2.7 billion and would combine the savings from those cuts with reserve funds to balance the budget, as it is "assume[d]" there will be no additional tax revenue for the fiscal year that starts July 1 (Worcester Telegram & Gazette, 4/25). The funding plan would increase Medicaid spending by about $200 million to $5.7 billion, but that amount is less than the $450 million state officials had expected. The budget proposal also calls for denying Medicaid benefits to about 57,000 long-term unemployed low-income residents beginning in January, a move that would save $133 million. In addition, the plan calls for increasing some copayments and premiums and controlling drug prices under Medicaid. The plan also would cut funding for other health programs, including:

• Funding for HIV/AIDS treatment and detection would be cut by 20%, to $33 million;
• The Department of Mental Health's budget would be cut by $50 million, or 8.5%. Workers in group homes for the mentally ill could be laid off as a result;
• State employees would have to pay 20% of their health costs, up from 15%, to save the state $29 million. Individuals hired after 2003 would be responsible for 30% of the costs; and
• The plan would shift $23 million from an election program to cover a legal settlement requiring better treatment for mentally retarded adults.

New Taxes Would Negate the Cuts
The Boston Globe reports that if lawmakers approve new taxes, many of the cuts in the plan would be restored. For example, if lawmakers approve a 50-cent increase in the state's cigarette tax, $150 million would be generated, more than enough to "make up" the funds that would be saved by denying Medicaid coverage to unemployed residents. Kevin Sullivan, acting Gov. Jane Swift's (R) budget chief, said that House leaders are "overstating the impact" of the cuts to encourage lawmakers to increase taxes. Sullivan suggested that lawmakers instead consider Swift's plan to balance the budget by using the state's "rainy day" and tobacco funds. The House concludes its budget negotiations the week of May 6, and the issue then moves to the state Senate (Klein, Boston Globe, 4/26).