State Budget Problems Severely Impact Medicaid

July 22, 2010.  Medicare pays little for long term health care.  Medicaid programs for the poor are being impacted by state budget woes.  Key reports share some current findings on the economic situation.

The New York Times: ” As states face severe budget shortfalls, many have cut home-care services for the elderly or the disabled, programs that have been shown to save states money in the long run because they keep people out of nursing homes. Since the start of the recession, at least 25 states and the District of Columbia have curtailed programs that include meal deliveries, housekeeping aid and assistance for family caregivers, according to the Center on Budget and Policy Priorities, a research organization. That threatens to reverse a long-term trend of enabling people to stay in their homes longer. … Because Medicaid regulations require states to provide nursing home care to receive federal Medicaid money, legislators often have more leeway to cut from home services” (Leland, 7/16).

Kaiser Health News: “Three black members of Congress on Tuesday said minority nursing home patients would be disproportionately affected if Congress fails to extend bonus payments to state Medicaid programs. Low Medicaid payment rates to nursing homes have been blamed for causing low staffing rates and quality-of-care problems for years. The lawmakers fear that without the extra payments, states will trim their budgets, exacerbating problems at nursing homes that rely heavily on Medicaid” (Galewitz, 7/20).

The Columbus Dispatch: “Unless Ohio gets more federal stimulus help, state leaders will have to spend $1 billion more next year on Medicaid just to keep the same level of coverage that’s in place today. The sobering statistic was one of many relayed during a four-hour hearing today of the Budget Planning and Management Commission, the bipartisan legislative panel that is examining ways to deal with a future budget shortfall that could reach $8billion” (Siegel, 7/20).

 The Associated Press/ In Oregon, “the Legislature’s Emergency Board plans to meet Thursday to restore $17.1 million in cuts to the Department of Human Services. … Recognizing that budget cuts ordered by the governor, totaling $158 million at the department, would hurt some of Oregon’s most vulnerable people while ultimately costing more money, the Emergency Board will shift spending. The move will temporarily restore programs serving more than 16,000 people and retain $14 million in federal matching funds, said Rep. Peter Buckley, D-Ashland, co-chair of the Ways and Means budget committee” (7/20).

Meanwhile, The Fiscal Times reports that the recession and a “shortage of pediatric dentists who accept Medicaid” may be contributing to an 15 percent increase in the “number of cavities in children between the ages of two and five,” in the past 10 years. “In addition, many states – the most recent being California – have dropped their coverage for parents, which is a factor in their child’s dental visits. … Under President Obama’s health care reform bill, Medicaid will be expanded, allowing more children to be covered for dental services. Starting in 2014, health plans purchased through the state-run Health Benefit Exchange must also include pediatric oral care for dependents under 21″ (Briody, 7/20).

This information was reprinted from with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at

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