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Lawmakers Partly Restore Medicaid-Program Money

Posted on: Friday, 8 July 2005, 21:01 CDT

Jul. 8--HARRISBURG - When Gov. Rendell announced his state budget proposal in February, he made it clear that the $4.5 billion Medicaid program was in trouble and had to be scaled back.

But he pledged to retain some level of coverage for 1.8 million low-income and disabled Pennsylvanians who depend on the program.

When the budget was finalized last night, about one-third of the $383 million in funding cuts was restored, in large part by drawing from untapped state funding sources and through higher-than-projected revenues.

Rendell signed the $24.3 billion state budget yesterday morning in Washington, where he was testifying to a federal committee on military base closings. But not before removing language inserted by the General Assembly that would have restricted expenditures for family planning for low-income women.

The budget passed both chambers of the legislature late Wednesday night.

Department of Public Welfare Secretary Estelle Richman said she would have liked to have seen more money restored to the Medicaid program but that, in the end, she felt the agency was in pretty good condition.

"We can manage with what we have so no one feels any pain," Richman said. "We got the major pieces back."

It was unclear yesterday exactly how the cuts would affect Medicaid recipients, but health-care advocates said they found it hard to believe there would be no pain with a $240 million shortfall.

"The main thing is that there are cuts to services that were viewed as sacrosanct for the disabled," said Ilene Shane, executive director of Pennsylvania Protection and Advocacy.

The budget compromise eliminated some of the most potentially devastating cuts, including monthly limits on the number of drug prescriptions, increased co-payments on prescriptions, and some limits on hospital and doctor visits.

Still, the budget will limit adult Medicaid enrollees to 18 doctor visits per year and one rehabilitation-hospital admission a year. It also institutes co-pays for middle- and upper-income families with disabled children. Families making more than $40,000 will have to pay a monthly percentage of their income to cover treatment costs for disabled children who are often not covered under private insurance. But the amount charged will be less than what was proposed, Richman said.

The Medicaid changes received a mixed review among hospitals and managed-care plans.

Doctors were pleased that patients escaped proposed cuts such as caps on the number of hospital admissions and prescription drugs, said Chuck Moran, a spokesman for the Pennsylvania Medical Society. But he said they remain concerned about the impact of limiting doctor visits and requirements to prescribe from a preferred drug list.

Still, the long-term issue continues to be the need to restructure the Medicaid system, Moran said. Otherwise, he said, "we will be facing the exact same questions in future years."

But managed-care companies said they were troubled by the minimal 2 percent rate increase for providers at a time when cost projections hover at 7 percent.

"The budget offers insufficient funding for medical assistance [managed-care companies] that is far below the current and projected cost of providing health care to medical-assistance recipients," said Daniel J. Hilferty, president and chief executive officer for AmeriHealth Mercy/Keystone Mercy Health Plan.

Andrew Wigglesworth, president of the Delaware Valley Healthcare Council, said the region's hospitals "dodged a major bullet this time around," skirting most of a projected $182 million shortfall.

"The magnitude of cuts that were proposed were such that it would have compromised care for all patients, not just Medicaid patients," Wigglesworth said.

At the same time, health-care advocates say they are outraged by the fact that General Assembly members would eliminate any funding for social service programs while giving themselves sizeable raises, which they did early yesterday morning before recessing for the summer.

"The juxtaposition of these votes is stark and cruel," said Kathleen Daugherty, executive director for the Lutheran Advocacy Ministry in Pennsylvania. "People are really angry about this."

MEDICAID BENEFITS:

The final version of the budget, which Gov. Rendell signed into law yesterday, will eliminate $240 million from the $4.5 billion Medicaid program.

Drug refills

Proposed:Increased co-pays on brand-name items, from $1 to $3, for everyone. Co-pays for generic drugs would remain at $1.

Enacted: No co-pay increases.

New drug prescriptions

Proposed: Six per month.

Enacted: No limit.

Doctor visits

Proposed: Limit of 18 per year for everyone.

Enacted: 18 office visits to doctors other than primary care. Recipients will have unlimited access to primary-care physicians and for treatment of certain chronic diseases such as cancer or diabetes.

Hospital visits

Proposed:Limit of two per year for everyone.

Enacted: Cap will set one per year for 100,000 adults on general assistance. The agency will set aside funding for exceptions to the cap.

Medical equipment

Proposed: Purchases for these items capped at $5,000 a year.

Enacted: No limit.

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Source: The Philadelphia Inquirer

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