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Medicare Compliance & Reimbursement

Medicaid:

Politicians Primed For Medicaid Reduction Talks

Published on Mon Feb 14, 2005

State, federal lawmakers want to rein in Medicaid spending.

Usually, one good way to clear a room in Washington is to stand up and say "Medicaid." While a congressional Medicare hearing is generally standing room only, with waiting lines around the block, Medicaid garners little interest.

But that tradition may be changing. Federal lawmakers and the states both are making noise this year about their desire to drastically slow Medicaid spending growth, arguing that the program is busting their budgets.

But as government support threatens to wane, provider groups and business organizations are joining advocates for families, low-income people and the disabled to warn that significant trimming could mean trouble for the entire health care system.

Speaking at an National Governors Association Medicaid forum Feb. 28, Healthcare Leadership Council President Mary Grealy said that influential business groups - including the Chamber of Commerce, the National Association of Manufacturers, and America's Health Insurance Plans - are likely to speak out this year in favor of a go-slow approach on Medicaid cuts.

Grealy's own appearance at the "why Medicaid matters to you" session was evidence of the growing concern. HLC is a coalition including chief executive officers from all sectors of health care.

Increasingly, businesses worry that cutting people from Medicaid rolls or cutting Medicaid provider payments will simply result in an increase in uninsurance, as costs are shifted onto private payers, said Grealy. This year will see the birth of "a very interesting and to some extent an unusual alliance" of big economic players urging caution when it comes to cutting Medicaid, she predicted.

The "biggest mistake" is for businesses to assume that policy decisions on Medicaid affect only Medicaid, Grealy said. Besides increasing the ranks of the uninsured, severe cuts will leave many providers with insufficient resources to support activities such as nurse recruitment or information-technology adoption, which are vital to the nation as a whole, she noted.

States and the federal government increasingly look to Medicaid - along with the State Children's Health Insurance Program - as potential coverage options for lower-income uninsured people. And creeping uninsurance among the working population makes Medicaid and other government funds for coverage much more important to the business community, which sees growing numbers of workers and companies unable to afford standard coverage options. Said Grealey: "80 percent of the uninsured live in a household where someone is working. This is no longer a welfare population. In many instance, it is the working population."

Businesses are increasingly interested in ways to leverage government money to get more private funds into the health-coverage game, said Grealy.

In local studies, small employers who don't now offer health coverage report that they could put up about a third of the cost of workers' health insurance, while workers say that they could pay another third, she reported. If federal dollars - from Medicaid, SCHIP, or tax credits, for example - added the final third, the government health-care safety net could play a role in stemming or even reversing coverage loss, she suggested.

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