Monday, August 24, 2009
N.M. Considering Cuts to Medicaid
By Barry Massey
SANTA FE — State government's largest health care program faces a serious budget shortfall that could balloon to $300 million next year, forcing Gov. Bill Richardson's administration to start planning for cutbacks in Medicaid.
Options range from reducing or eliminating benefits, such as dental care for poor adults, to lowering the reimbursement rates for doctors and other providers, according to New Mexico Human Services Secretary Pam Hyde.
If drastic cost-cutting becomes necessary, she said, the state might need to scrap entire portions of Medicaid, such as a program to help low-income workers with insurance coverage, or revamp Medicaid to provide a minimum amount of services.
"We know there is going to be some cost containment. The only question is how much," Hyde said in an interview last week.
Nearly one in four New Mexicans receive all or part of their health care through the Human Service Department's medical assistance services. Medicaid covers uninsured children, poor adults and disabled New Mexicans. Its services include long-term care for the elderly.
The bleak budget outlook for Medicaid adds to financial problems confronting the state. Because New Mexico's revenues are much weaker than expected, legislators plan to meet in a special session this fall to consider cutting spending to balance this year's $5.5 billion budget.
Medicaid accounts for about 11 percent of state spending.
The program's costs are projected to exceed its budget by $35 million to $40 million this year, and the shortfall could grow to $200 million to $300 million in the 2011 fiscal year that starts next July, according to the department. Hyde cautions that the cost projections are preliminary and it's possible this year's financial squeeze for Medicaid could lessen if New Mexico qualifies for more federal matching money because of rising unemployment.
Medicaid's costs have grown during the recession as more people ask for help. There's been a nearly 10 percent enrollment increase since mid-2008, according to Hyde. The fallout of Medicaid cutbacks on families and New Mexico's health care system worries social services advocates, who are lobbying the Legislature to raise taxes rather than cut spending for services like Medicaid.
Bill Jordan, policy director for New Mexico Voices for Children, points out that for every dollar the state spends on Medicaid, the federal government provides about $4 for the program.
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