The federal government’s plan to cut huge funding support to state governments across the country is expected to take a serious toll on those millions of residents who either lack insurance coverage or the uninsured patients who now avail of free medical services 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 to $60.9 billion in the next ten years, says the Center on Policy and Budget Priorities, one of the nation’s premier policy organizations 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 cuts, the federal government is expected to save about $21 billion as the medical costs are shifted from the federal government to the states. 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 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 Center 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 in the President’s budget that would reduce other grants in aid to states," it added.
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 suffering from budget deficits.
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.
The Center’s study claimed that the federal government is set to increase rebates of drug manufacturers pay to Medicaid for the prescriptions it covers. By doing so, great savings can be achieved as the net price of these prescriptions are lowered to a certain level. " In the alternative, 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," the Center reported.
The federal government is now 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 envisioned earlier under the Deficit Reduction Act, individuals without spouses living in the home may qualify for Mediaid long-term care services. And the home equity ceiling was set to a nationwide ceiling of $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 disable applicants for Supplemental Security Income (SSI), the Center reported.
This makes it impossible for SSI beneficiaries to engage in other business activities as the Social Security Administration (SSA) continues to monitor their assets on a regular basis by using the electronic financial records monitoring system.
Meanwhile, many unisured or those who lack medical insurance coverage in California have expressed disbelief over the proposed cuts in Medicaid funds.
They have have expressed apprehensions that the proposed cuts would take a serious toll on the state residents whose access to quality medical services in county hospitals and clinics may be hampered. Already suffering from huge budget deficits, it is likely that giving these states more financial burdens will all the more strain the delivery of quality health services to their constituents.
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