Medicaid cuts in state 'devastating'

Spending: DSHS decision to end coverage for 27,000

September 30, 2010 

STATE CAPITOL AT NIGHT

The Washington State Capitol in Olympia. (Tony Overman/The Olympian)

The state government agency that runs the Medicaid health insurance program for low-income people announced $112.8 million in cuts that were described Wednesday as "devastating" to the state safety net.

The cuts will end subsidized health insurance coverage for about 27,000 in the state’s Apple Health for Kids program and end out-patient pharmacy benefits for thousands of Medicaid patients – both in March. Other cuts in January will eliminate a host of services including dental, vision, hearing and hospice care for thousands of Medicaid patients.

“I would characterize these cuts as devastating and radically altering the face of the medical programs we have created over the last 20 years,” said Doug Porter, state Medicaid director.

“What you see and what I hope your readers understand is these don’t represent choices. There was really only one choice to make and that was whether to stay in the Medicaid program.”

The cuts are in response to Gov. Chris Gregoire’s order for 6.3 percent across-the-board cuts that spare only pensions, basic education, and state debt payments. The Medicaid cuts are in addition to reductions the Department of Social and Health Services announced totaling $168 million.

Announcements by other agencies are due by Friday, the date the governor’s order takes effect.

The separate DSHS cost reductions involve cuts in state agency jobs and services, including a 10 percent reduction in hours for home-care workers who assist elderly people with medical problems, according to Adam Glickman of the Service Employees Union 775 NW.

“These are the deepest cuts to home care that we’ve ever seen. They are talking about a 10 percent pay cut for home care workers that make $10 an hour and live in poverty,” he said. “There are dozens of home care agencies that could be forced to shut down. … We’ve talked to members who think clients could end up in nursing homes. If they can’t get enough care they may have to move into nursing homes.”

Porter said his agency really had one choice, and that was to decide if Washington would remain in Medicaid, the state-federal partnership. Once that decision was made, the state could only cut spending in “optional” category of programs – which includes the pharmacy benefits, adult dental, vision and hearing services, family planning, and the state’s Disability Lifeline, once called General Assistance Unemployed.

“Everything is locked in,” he said.

Some cuts take effect in January, some in March – and the latter cuts such as children’s health and pharmacy benefits would require legislative approval, according to Medicaid spokesmen. Despite the cuts, Medicaid is keeping help for kidney disease and durable medical equipment, Porter said.

State Rep. Brendan Williams, D-Olympia, said in a statement: “A just society does not make the current-biennium cuts announced today by the Department of Social and Health Services. A relevant Legislature would intervene.”

“These penny-wise, pound-foolish cuts will devastate children, community-based long-term care, and our most vulnerable citizens in nursing homes. These cuts give the green light to abuse and neglect,” Williams said.

But lawmakers have no extra money, and few besides Williams have spoken about raising taxes to reduce the size of cuts next year. Majority Democrats have said it would not be productive to come to Olympia for a special session with little prospect of agreeing on a plan for cutting spending or raising revenue.

The children’s health cut is $10.1 million and makes an estimated 27,000 children ineligible for the insurance subsidy. Children’s health was once a sacred cow for majority Democrats in Olympia who kept expanding coverage. After the cuts, some 600,000 children would still be served by the state’s health programs, according to Jim Stevenson of the Medicaid program.

The Medicaid cuts and general-fund savings include cutting:

 • $39.4 million from outpatient pharmacy assistance for all Medicaid clients.

 • $20.3 million from the recently reformulated Disability Lifeline (formerly General Assistance Unemployed), affecting 21,000 people.

 • $8.3 million from adult dental services for 105,000 people.

 • $4.6 million from adult hospice services for 2,600 people.

 • $800,000 from adult hearing and vision services for 69,400 people.

 • $3.3 million from interpreter services, affecting 70,000 people.

 • $3.2 million from a program that paid Medicare Part D premiums for residents eligible for both Medicare and Medicaid, affecting 49,000 people.

 • $2.9 million from physical, occupational and speech therapy for 20,000 people.

 • $1.2 million in family planning for 43,000 people.

 • $8.6 million in emergency medical funding for aliens (state only funded).

“They are all regrettable, but the one that causes me the most anxiety is the prescription drug cut,” Porter said. “I cannot imagine the effect that is going to have on state hospitals, on emergency rooms.”

If allowed to stand, the medication cuts will leave patients “extremely vulnerable. They are going to have to find some way to pay for it themselves – to get free samples from their doctors’ offices” or seek out free programs sponsored by drug companies, Porter said.

In one sliver of good news, the state’s Basic Health Plan is running ahead of budget and should have a surplus of at least $25 million by year’s end, so it won’t have to be cut, according to Porter.

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