July 1, 2005

Sweeping Medicaid cuts hit Missourians

By Carey Gillam

KANSAS CITY, Mo. (Reuters) - Fending off a late courtroomchallenge, Missouri implemented sweeping cuts in Medicaid onFriday, reducing benefits so sharply that critics called themoves among the most severe in the nation.

The new Medicaid standards, championed by Missouri's newRepublican Gov. Matt Blunt to avoid tax increases, trimmedMissouri's budget by $231 million, but are expected to cut morethan 68,000 Missourians out of the Medicaid program over thenext year.

Under the new standards, a single mother of two children isdeemed ineligible if she makes more than $350 a month, forinstance. Previously, the income line was drawn at $1,050 amonth. An estimated 24,000 children are expected to lose theirbenefits, dental coverage is being cut for adults, and disabledpeople are losing coverage for crutches and other aids.

An analysis by the nonprofit Center on Budget Prioritiesand Policies said Missouri's Medicaid expenditures were alreadybelow the national norm before the cuts and the new program isamong the harshest "that any state has ever instituted."

"It is pretty draconian," said Marc Cohan, director oflitigation for the Welfare Law Center in New York, which fileda lawsuit against Missouri on Wednesday, along with theNational Health Law Program in Washington. "Missouri has made achoice ... to balance the budget on the backs of the poor,"Cohan said.

The suit alleges the state is rushing the cuts into effectand in the process cutting off people who should remaineligible. U.S. District Judge Nanette Laughrey denied a requestfor a temporary injunction on Thursday.

Besides Missouri, several other states are movingaggressively to rein in Medicaid spending and Congress isconsidering a plan to cut federal contributions to Medicaid by$10 billion over five years.

Missouri, which spends about $2 billion annually in statemoney on Medicaid, has defended its actions and calls theprevious Medicaid level of benefits "unsustainable."

"We continue to provide a very generous Medicaid program,"said Missouri Department of Social Services director GarySherman in a statement issued on Friday.