non-English speaking beneficiaries.
Perhaps most painful is her proposal to terminate a 25-year-old state-funded "basic health plan" for 35,000 low-income adults who are not poor enough to qualify for Medicaid. Ironically, the Affordable Care Act encourages other states to develop plans like the one Gregoire would end. In fact, the federal government said it would pay for half of Washington State's ongoing costs for the model program. But Gregoire is asking lawmakers to terminate the program altogether because she says the state cannot afford to pay even half of the costs.
None of Gregoire's proposed Medicaid cuts were approved in the special session. So lawmakers, who convened their regular 2012 session this week, are taking a fresh look at the proposals.
What won't be on the legislative agenda is what Washington State isn't allowed to do. A union-led ballot measure last year forced the state to reinstate a $32 million training program for home health care workers that the legislature had eliminated. And a three-visit limit on non-emergency use of emergency rooms, designed to save $70 million, was lifted after a superior court judge issued an injunction order. The governor's proposal to limit Medicaid coverage of certain prescription drugs may also be taken off the agenda, if federal objections cannot be satisfied.
No more federal help
The fundamental problem all states face is that while Medicaid rolls continue to grow, federal support for the jointly-funded program is not keeping pace --- and neither is state revenue. More than $100 billion in extra federal support under the 2009 stimulus program ran out last July. As a result, state Medicaid spending jumped 29 percent between budget years 2011 and 2012 to make up for the loss of federal funds.
This year, even with program reductions, most states will find it difficult to come in under that higher spending level. Meanwhile, additional federal help is not an option. Although Congress exempted Medicaid from across-the-board cuts in its federal deficit-reduction deal last year, no one expects Washington to ship additional federal dollars to the states for Medicaid. That means the extra burden is all on states' shoulders, according to Alan Weil, director of the National Academy of State Health Policy. "State revenues are growing," Weil says, "but Medicaid is going to eat that up and more in many states."
In addition, states are barred from doing anything that would lower Medicaid enrollment below the income levels called for in the national health law's 2014 Medicaid expansion. That includes raising premiums and co-pays to levels the federal government considers unaffordable for low-income patients.
That leaves states with relatively few options when it comes to controlling Medicaid costs. They can reduce provider fees and eliminate optional benefits. States can also expand Medicaid managed care programs and experiment with broad changes in the way health care is delivered. These labor-intensive system-wide changes have twin goals of improving care and reducing costs through better coordination. But in most cases, any savings they generate are not expected to make a serious dent in state budgets in the short term.
Making matters worse, federal regulatory processes continue to drag on, says Dan Crippen, executive director of the National Governors Association.
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