US: states, federal government prepare massive Medicaid cuts

The proposals include cuts in the number of people who will be eligible for benefits, as well as reductions in the services provided to those who are covered. Some states are planning to drive hundreds thousands of people off their Medicaid rolls and force even the poorest of recipients to pay premiums on essential services such as emergency room care.

The New York Times reported in a May 9 article (“States Propose Sweeping Changes to Trim Medicaid by Billions” by Robert Pear) that the National Governors Association and the National Conference of State Legislatures are developing proposals to cut state spending. The Times report was based on draft proposals that have not yet been publicly released.

These proposals are part of negotiations between the states and the US Congress, which last month approved a budget outline that foresees a federal savings of $10 billion by reining in spending on Medicaid between 2006 and 2010. The Bush administration has proposed a far higher cost reduction.

Medicaid costs are shared between the states and the federal government, with the federal government paying between 50 and 77 percent of the total costs of state programs, depending on the state. Each state runs its own Medicaid program, with variations on who is covered and what services they receive, subject to certain federally mandated requirements.

Due to tax cuts implemented in the late 1990s, combined with the economic slowdown of the past several years, state budgets are under increasing strain. Every state has already implemented cuts in coverage or services to balance state budgets, and most states are planning further reductions.

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http://wsws.org/articles/2005/may2005/medi-m11.shtml