Budget Bill Could 'Lead to Poorer Health' for Medicaid Patients

The Budget Reconciliation Act of 2005, S. 1932 (at the Library of Congress' THOMAS Web site, type "S 1932" in the search box after selecting "Bill Number"), could boost the number of uninsured Americans as Medicaid patients lose coverage because of higher monthly premiums and copayments and modified income eligibility thresholds.

Passed by Congress Feb. 1, the Budget Reconciliation Act will allow states to implement several cost-cutting measures to rein in their Medicaid budgets beginning in 2006. The bill cuts $39.5 billion from the estimated $14.3 trillion in federal spending during the next five years. Federal Medicaid cuts will account for 27 percent of the total budget cuts, and Medicare cuts will account for another 23 percent. President Bush signed the bill earlier this month.

Proponents of the new legislation point to the need to control Medicaid spending to ensure the program's long-term survival. Critics predict that tens of thousands of poor and disabled U.S. residents -- many of them children -- stand to be knocked off the Medicaid rolls completely as state-imposed eligibility requirements shift. Thousands more, these critics contend, will find themselves no longer able to participate in the program because of higher premiums and increased copays. Still others won't seek needed health care because they find their benefits have been slashed.

"The Medicaid cuts will probably lead to poorer health for (low-income) patients," said AAFP President Larry Fields, M.D., of Ashland, Ky.

Fields' comments concur with predictions by the Congressional Budget Office, (PDF file: 6 pages / 25.7 KB. More about PDFs.) which said some of the savings will derive from patients leaving the Medicaid program. The CBO estimates came in a Jan. 27 report that also estimated that by 2015

"We estimate that about 80 percent of the savings from higher cost-sharing (copayments) would be due to decreased use of services (or, in the case of prescription drugs, to the use of lower-cost drugs); the remaining 20 percent would reflect lower payments to providers," the CBO report says. "CBO estimates that about 80 percent of the savings from higher premiums would be due to higher premium receipts, and the remaining 20 percent would stem from individuals leaving the Medicaid program."

Early results from states' imposition of premiums and higher copayments indicate the CBO estimates could be accurate.

Data released in February by the Missouri Social Services Department, for example, show that 98,853 people were dropped from the state Medicaid rolls between February and December 2005. Of that number, 43,409 were children. Among the reasons: newly instituted insurance premiums for the Missouri Medicaid's Children's Health Insurance Program and new rules that deny coverage to children in families earning between 151 percent and 225 percent of the federal poverty level if the family is deemed to have access to affordable health insurance.

Affordable health insurance is defined as insurance costing less than $342 a month in premiums. Federal guidelines released in January define poverty as an income of $9,800 a year for one person and $20,000 for a family of four.

"The solution is not to put barriers to care in front of patients," said Fields. "The solution is to make it possible for these patients to have a personal medical home with a family physician who gets part of his or her compensation by managing that patient's care."