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House budget plan would reduce the federal government's role in Medicaid

This article first appeared in the St. Louis Beacon, May 19, 2011 - As the fight over debt, deficits and entitlements becomes more intense in Washington, some Missouri groups fear that the Medicaid health insurance program for the needy could become one of the casualties. They are especially concerned about the U.S. House budget plan, passed in April, which calls for a remake of Medicaid in an effort to drive down the federal deficit.

Reinforcing the worries are conclusions in this month's study by the Kaiser Commission on Medicaid and the Uninsured. It projects that federal spending for Medicaid in Missouri would drop by more than 30 percent under the House plan to reduce Medicaid spending. The proposed cutbacks would save $1.4 trillion, nationwide, between next year and 2021.

The House proposal calls for repealing the federal Affordable Care Act under which Medicaid spending and enrollment would grow sharply as a means of providing health insurance for a larger percentage of the nation's needy. In addition, the House budget proposal would convert Medicaid to a block grant, with a cap on spending and more state flexibility to design their Medicaid programs. It's unclear how many federal requirements, such as health insurance for needy children, would remain in place under the House plan.

Andrea Routh, executive director of the Missouri Health Advocacy Alliance in Jefferson City, recalls that it was budget cuts by former Missouri Gov. Matt Blunt that reduced the qualification levels for Medicaid.

"We continue to make cuts to programs that serve low-income people as a way to address our concerns about the federal deficit. We need to look at some other places if we feel we need to make reductions. This isn't the right place to look."

Here's why this debate is important in Missouri. Medicaid programs consume about 28 percent of the state's budget. The Missouri program, called MO HealthNet, provides health insurance for 900,000 Missourians, including 37 percent of the state's children, 61 percent of all residents of nursing homes and one of every 11 Missourians over age 65.

The federal poverty level in the 48 contiguous states and the District of Columbia is now $10,890 a year for a one-person household. Under Missouri's strict eligibility guidelines, a needy individual is denied Medicaid if his or her income exceeds 18 percent of the poverty level. That would mean the person's income could not exceed $163.35 a month. The ACA would bring relief by raising the income ceiling for Medicaid eligibility. For example, a one-person household would qualify for Medicaid even if the recipient had a monthly income of $1,207. That's 133 percent of the poverty level.

The debate comes as Missouri's uninsured population continues to swell. The number jumped 15.5 percent -- to 914,000 from 772,000 -- between 2007 and last year, according to the U.S. Census Bureau's Current Population Survey. The Missouri Foundation for Health says the rise is linked to a combination of the economic downturn and a drop in the number of residents having employer-sponsored health coverage.

At this point, the federal government picks up 51 percent of Missouri's Medicaid funding. If Missouri ended up getting even fewer federal dollars under the U.S. House-proposed block grant program, some Missouri groups worry that fewer needy residents would have access to health care.

But others doubt that the House proposal will gain traction. Those holding this view include Dr. Karen Edison, director of the Center for Health Policy at the University of Missouri in Columbia and head of the medical school's department of dermatology.

"Support for changing Medicaid to a block grant program is lacking in the U.S. Senate and the president would be certain to veto it; therefore, there is little chance it will become law in the near term."

Even so, there has been a push by some Missouri groups to try to head off the House proposal.

Earlier this month, Routh's group and several others signed a letter to Missouri's congressional delegation about the deficit. Other groups signing the letter included the Missouri Budget Project, the National Alliance on Mental Illness Missouri, Metropolitan Congregations United and Missouri Jobs with Justice. They urged lawmakers to take "responsible steps to address short-term deficits and long-term debt." But the letter said it was not "necessary or advisable" to tackle these dual issues at the expense of working families and in ways that might harm the economic recovery.

U.S. Rep. Paul Ryan, the Wisconsin Republican who devised the GOP budget plan, says on his website that the current Medicaid program is "fiscally unsustainable, and it is a leading cause of state budget deficits. Even worse, the program serves its intended beneficiaries poorly: Medicaid patients only receive the basic treatment they require, with costs set by Washington or state bureaucrats; and Medicaid patients often end up in the emergency room for basic needs simply because they cannot get access to up-front health care services."

He adds, "The right changes can form a more effective program, strengthen the health-care safety net for the neediest populations, and bring fiscal relief to states."

The House proposal for remaking Medicaid comes as Missouri seeks to improve services to needy children under the program. Like more than 30 other states, Missouri is considering the adoption of the American Academy of Pediatrics' "medical home" model for caring for these youngsters. The model involves setting up a care network in which youngsters get comprehensive and preventive health services that, in theory, will help them stay well and reduce costly hospital and emergency room visits. Missouri might decide this summer whether to adopt the medical home model.

In any case, Kaiser says the House budget proposal poses a serious threat to health reforms. It says repeal of health-care reform, as the GOP plan envisions, and turning to block grants "would result in dramatic reductions in coverage and similarly dramatic increases in the number of uninsured." To avoid enrollment cuts, the Kaiser study says, states would have to increase their own Medicaid spending substantially.

But Routh says higher state spending is unlikely, even though "Missouri already is down to bare bones for Medicaid."

Funding for the Beacon's health reporting is provided in part by the Missouri Foundation for Health, a philanthropic organization that aims to improve the health of the people in the communities it serves.

Robert Joiner has carved a niche in providing informed reporting about a range of medical issues. He won a Dennis A. Hunt Journalism Award for the Beacon’s "Worlds Apart" series on health-care disparities. His journalism experience includes working at the St. Louis American and the St. Louis Post-Dispatch, where he was a beat reporter, wire editor, editorial writer, columnist, and member of the Washington bureau.