Wednesday, April 8, 2009

Feds mulls cutting medicaid costs

At least, some 48 million United States residents do not have health insurance. This is not to include others who are insured but do not have sufficient health coverage to free them from the exorbitant medical expenses incurred when they are admitted to private hospitals for emergency purposes.

The problem will get even much worse once the U.S. Congress deliberates and approves the huge budget cuts on Medicaid that the federal government had envisioned for the period covering this year until 2012, says a think-tank policy report.

It is expected that it will take a serious toll on millions of patients whose only option is to avail of free medical benefits from the government.The new proposal, now being deliberated in the U.S. Congress, will allow the transfer of Medicaid funds totalling $24.7 billion over the next five years and $60.9 billion in the next ten years from the federal budget to the state coffers, says the Center on Policy and Budget Priorities. The Center is one of the nation’s premier policy organization working at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals.

Of the total $25 billion in proposed cuts, the federal government will save about $21 billion in medical costs once Congress has approved it. Accordingly, the loss of federal Medicaid funds would allow the states to reduce benefits or payments to health providers. They are also urged to cut back on other state programs or increase some of their taxes.

In fact, Congress already cut more than five times the federal funding for Medicaid as contained in the Deficit Reduction Act, which eventually deepen the cuts in health assistance to low-income people.

The think-tank report cited that one of the services that will be affected by these cuts is the inspection of nursing home facilities to ensure their safety and quality. Under the new proposal, the states will bear most of the burden. "These Medicaid cost shifts are in addition to other proposals that would reduce other grants in aid to states," it reported.

In the same proposed budget cuts, a number of federal tax proposals could eventually result to the loss of significant amounts of state revenues, which may aggravate the fiscal squeeze on the state governments, some of them are already experiencing huge budget deficits. For instance, the state of California is working on how to offset its 40 billion budget deficit. Which is the reason why the state government has unanimously approved a law that would increase some taxes on commodities and services to offset its budget shortfalls.

Under the current system, the federal government absorbs between 50 to 76 percent of the costs that the states incur for the purchase of health and long-term care services for eligible low-income people. But the federal government has something up its sleeves one of which is to increase rebates of drug manufacturers to Medicaid for the prescriptions they cover. By doing so, great savings can be achieved as the net price of these prescriptions are lowered to a certain level. " The federal government could also reduce its spending by limiting the state Medicaid expenditures that it is willing to match, thereby shifting costs to state budgets, rather than reducing those costs.

At present, the federal government is studying 46 states that have historically pooled the administrative costs of making eligibility determinations for families and children receiving Medicaid, TANF, and food stamps. When implemented, it will generate savings of $1.8 billion over the next five years.

As earlier envisioned under the Deficit Reduction Act, individuals without spouses living in the home may qualify for Medicaid long-term care services. They can also qualify for the home equity ceiling now set at $500,000, from the original of $750,000. However, one of the problems that concerns the government is how to monitor the income of elderly and disabled beneficiaries of the government's Supplemental Security Income (SSI), the Center said.
This close monitoring makes it impossible for SSI beneficiaries to engage in other business activities as the Social Security Administration (SSA) continues to keep tabs on their assets on a regular basis by using the electronic financial records monitoring system.

As this developed, many war veterans in Southern California who are largely dependent on Medicaid for their health care needs have expressed disbelief over the proposed cuts in Medicaid funds. They have have expressed apprehensions that these impending cuts may hamper their free access to quality medical services in county hospitals and clinics. Already suffering from huge budget deficits, it is likely that shifting more of the financial burdens to California will all the more strain its delivery of quality health services to those who need them most.

In view of these problems now affecting millions of US residents, President Obama has made it one of his priorities to work out a solution that will make those uninsured or lack insurance coverage to be able to enjoy the benefits of a universal healthcare system like those being practiced in Europe and Canada.

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