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Feds Reject Hawaii’s 10-Day Medicaid Hospital Limit

Updated at 4:15 p.m.

The Obama administration has rejected Hawaii’s proposal to limit most adult Medicaid recipients to 10 days of hospital coverage per year, which would have been the strictest in the nation.

Illustration by burroblando via Flickr

Instead, Hawaii has been approved to implement a 30-day hospital coverage limit starting July 1, state and federal health officials say. Exempted from the limit are children, pregnant women, those undergoing cancer treatment, the elderly and the blind and disabled.

The Centers for Medicare and Medicaid Services is still mulling a proposal from Arizona last September to limit adult Medicaid patients to 25 days of hospital coverage  a year.

Hospitals in Arizona and Hawaii opposed the Medicaid coverage limits, saying they would get stuck treating patients for free. Advocates for the poor decry the proposals saying they would restrict access to care.

States defend the actions as a way to balance budgets hammered by the economic downturn and the end of billions of dollars in federal stimulus funding last year – funds that had helped prop up Medicaid, the state-federal health insurance program for the poor.

Several states already restrict hospital coverage, including Alabama (16 days), Arkansas (24 days), Florida (45 days), and Mississippi (30 days). In 2010, Massachusetts started a 20-day per stay limit.

Hawaii officials said they found other ways to trim the state’s increasing Medicaid budget. They plan to reduce adult Medicaid income eligibility levels from 200 percent of the federal poverty level, which is $51,432 a year for a family of four, to 133 percent of the poverty level, or a maximum income of $34,200 for a family of four.

Private health insurers generally don’t limit hospital coverage, according to America’s Health Insurance Plans, a trade group.

Hospital officials in Hawaii criticized the approval of the 30-day hospital coverage limit.

“The change will result in a cost shift to hospitals,” said George Greene, CEO of the Healthcare Association of Hawaii, a hospital trade group. “Health care providers in the state are already facing extremely difficult financial conditions which forced the closure of two hospitals at the end of last year, and this will further increase uncompensated care.”