Maryland To Reduce Medicaid Programs, Benefits To Address $1B Budget Shortfall

Maryland is likely to reduce benefits and cut programs for Medicaid beneficiaries in light of an estimated $1 billion state budget deficit for the next fiscal year, which begins July 2004, the Washington Times reports. Under plans submitted to Maryland Gov. Bob Ehrlich (R) by the Maryland Department of Health and Mental Hygiene, the state would make cuts that have the "least impact" first, Nelson Sabatini, secretary of the department, said. He declined to give specifics about which programs or benefits would be reduced. Maryland officials do not plan to close any of the state's seven psychiatric hospitals, four institutions for people with disabilities or two hospitals that treat chronically ill people, the Times reports. In addition to benefits cuts, the state also will seek about $10 million in matching Medicaid funds owed by the federal government, Sabatini said. Maryland pays for about $2.8 billion of the state's $4 billion annual Medicaid costs, according to the Sabatini. "Medicaid is just not financially stable and is going to have to be restructured to make sure poor people still have high-quality, basic health care," Sabatini said. He added that budget reductions do not include layoffs for any of the department's 1,100 employees, and the department will continue to fully find bioterrorism and disease surveillance programs (Redding, Washington Times, 7/25).