Health System Gains are Lost in Governor’s Budget

by Rosana Garcia

Income taxHealth care spending is a large part of a state’s budget — and when it’s time to balance that budget — it is tempting to cut it.

This is exactly what Governor Malloy’s 2015 budget does.

Are these the smartest cuts? Maybe we balance the budget in the short-term, but what are the long-term consequences? How will this “balanced” budget haunt us in the future?

Let’s look at three proposed cuts in the Medicaid program:

  • Changing the eligibility for HUSKY A for parents and pregnant women from 201 percent of the federal poverty level to 138 percent — essentially taking away health insurance coverage from more than 30,000 adults (read more about this in Stephanye Clarke’s recent blog post).
  • Reducing Medicaid reimbursement rates to some health care providers (primary care providers and Federally Qualified Health Centers do not take a cut).
  • Cutting funding to a group of people working on a proposal to integrate care for those that are dually eligible for Medicaid and Medicare.

Each of these cuts has some known and unknown consequences. Cutting HUKSY A (Medicaid) coverage for adults and pregnant women whose annual income is above 138 percent of the federal poverty line means that the ranks of the uninsured in the state will grow.

Many uninsured parents and pregnant women will not receive required care. Particularly challenging will be those pregnant women who will not receive any prenatal care. When hospitals carry the burden of these births and other emergency services for the uninsured, all of us pay the price.

To make up for these losses, hospitals may make up the difference by charging private insurance companies a higher rate. Insurance companies then, in turn, pass on those higher costs to the consumers and boom! We are all paying higher insurance premiums.

Reducing Medicaid reimbursement rates to providers has a similar effect. If hospitals are not being adequately reimbursed for those on Medicaid (HUSKY), then they will charge private insurance companies more, which increases insurance premiums. Again, we pay the price.

The proposal for integrating care for Dual Eligibles (people enrolled in both Medicaid and Medicare — low-income elderly and disabled) was created to save the state money, as these individuals are in poor health and require expensive care. We save over $25 million during this budget year, but this program could save us money in the long-term. Not to mention, the money spent over the past two years to plan this program is now wasted.

Again, we pay the price.

Most troubling, though, is that these proposed cuts reduce access to care and compromise the health of our most vulnerable residents. How can a parent care for their children if they are sick and can’t get care? How can providers provide quality care without adequate payment? How can we cut a program that we know will save us money and improve health?

We all pay the price —out of our pockets and with our health. Is it worth it?

Resources:

http://www.cthealthpolicy.org/pdfs/20150227_testimony_opposing_medicaid_budget_cuts.pdf

http://www.ctvoices.org/sites/default/files/bud15impactgovbudgetfy16.pdf

Malloy’s Budget Address: http://ctmirror.org/2015/02/18/prepared-text-of-connecticut-gov-dannel-malloys-biennial-budget-address/

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2 Responses to Health System Gains are Lost in Governor’s Budget

  1. Pingback: Update on Health & The State Budget  | Universal Health Care Foundation of Connecticut

  2. Pingback: Health Care Topics to Watch for in 2016… | Universal Health Care Foundation of Connecticut

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