ABQJOURNAL OPINION/GUEST_COLUMNS: State Raid on Medicaid Prompted $369M Shortfall

Sunday, November 14, 2010

State Raid on Medicaid Prompted $369M Shortfall

By Sireesha Manne
Attorney, New Mexico Center on Law and Poverty
          Governor-elect Susana Martinez will soon have to deal with the fiscal challenges facing New Mexico while honoring her promises to protect Medicaid from further cuts.
        It's a wise commitment to a program that has been a saving grace for New Mexico, providing health care coverage to over half a million people. The program also brings $3 billion federal dollars into our economy that supports over 50,000 jobs, mostly in the health care sector.
        Yet considerable misinformation is out in the public domain about the costs of Medicaid and its services in comparison to other states.
        Because it would be unfortunate for policy makers to act on Medicaid funding based upon incorrect information, it's critical to set the record straight about this program that has helped New Mexico's job situation, health care system and economy so much.
        • Medicaid is facing a $360 million shortfall primarily because the state borrowed a huge sum of money from the program that has not been returned. When New Mexico received federal stimulus funds for Medicaid in 2009, the state removed approximately $200 million in state general funds from the program and used it to bail out other parts of the budget in a time of economic crisis. The stimulus funds will expire by the end of this fiscal year, requiring the state to repay the money it borrowed from Medicaid, as the Legislature always intended to do.
        • New Mexico's Medicaid program is well-aligned with other states. Recent news articles have asserted that New Mexico provides more expansive Medicaid services than other states. However, the facts don't support this. New Mexico's benefits are no more generous than those offered in other states. All 50 states offer prescription drugs, 47 states offer hospice services, 43 offer eyeglasses, and the majority of other states offer hearing aids and dentures. Although these services are not mandated by the federal government, states have chosen to cover them because they are medically necessary.
        Our coverage for children is also in the middle of the pack, with 25 other states having more generous income eligibility levels than New Mexico for children's coverage through Medicaid. It is worth noting, though, that New Mexico still has the seventh-highest rate of uninsured children in the nation.
        We do worse when it comes to Medicaid coverage for parents.
        Jobless parents must earn less than 29 percent of the poverty level, which amounts to less than $5,370 annually for a family of three, to qualify for Medicaid in New Mexico. As a fallback for these parents and other adults living in poverty, New Mexico started the State Coverage Insurance program. But enrollment in this program has been frozen and there are nearly 24,000 people on the waiting list.
        • New Mexico has already made major cuts to Medicaid, minimized administrative costs and strengthened fraud detection activities. Those who would complain about efficiency or rising costs in Medicaid should specify what cuts they would propose, because most of these have probably already been made or cannot be adopted because they are unlawful.
        With federal restrictions on reducing eligibility levels in Medicaid, the state has cut administrative costs even though they make up less than 3 percent of Medicaid program costs in comparison to 15 percent to 20 percent in the private market.
        Federal funds were also used to strengthen fraud detection activities. Reimbursement rates to medical providers were cut by 3 percent, and hospital rates and managed care rates were cut. And not only was State Coverage Insurance frozen, numerous proposals have been adopted or proposed to cut health care services.
        • Medical costs would be even higher without Medicaid coverage.
        Finally, it's important to note that costs have risen in Medicaid in recent years because more people are seeking health care coverage as they lose their jobs in this recession and because medical costs continue to rise. These are problems that exist throughout the country.
        However, reducing Medicaid coverage would push health care costs for all New Mexicans even higher. More uninsured people would mean more doctors going uncompensated for their care, more use of expensive emergency rooms, and an even higher rise in private insurance premiums for everyone.
        We all have a stake in every New Mexican receiving affordable health care coverage and in our economy receiving all the support that it can. The new administration should know the true reasons for Medicaid budget shortfalls as they look for responsible solutions that will sustain Medicaid as a cornerstone of our health care system and major driver of our economy.

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