States Brace for End of Extra Payments for Medicaid

[Gerald]

WASHINGTON — Faced with a deepening recession two years ago, the Obama administration injected billions of dollars into Medicaid, the nation’s low-income health program. The money runs out at the end of this month, and benefits are being cut for millions of people, even though unemployment has increased.

From New Jersey to California, state officials are bracing for the end to more than $90 billion in federal largess specifically designated for Medicaid. To hold down costs, states are cutting Medicaid payments to doctors and hospitals, limiting benefits for Medicaid recipients, reducing the scope of covered services, requiring beneficiaries to pay larger co-payments and expanding the use of managed care.

As a result, costs can be expected to rise in other parts of the health care system. Cuts in Medicaid payments to doctors, for example, make it less likely that they will accept Medicaid patients and more likely that people will turn to hospital emergency rooms for care. Hospitals and other health care providers often try to make up for the loss of Medicaid revenue by increasing charges to other patients, including those with private insurance, experts say.

Neither the White House nor Congress has tried to extend the extra federal financing for Medicaid, even though the number of beneficiaries is higher now than when Congress approved the aid as part of an economic recovery package in February 2009.

The Congressional Budget Office estimates that federal Medicaid spending will decline in 2012 for only the second time in the 46-year history of the program. But states say they will have to have to spend more on Medicaid as they struggle to make up for the loss of federal money.

http://www.nytimes.com/2011/06/16/he...d.html?_r=1&hp

Note: Published: June 15, 2011