Healthcare News & Insights

Medicaid: States cutting hospital funding to balance budgets

As part of the Patient Protection and Affordable Care Act, Medicaid will be covering 17 million more people. But at the same time, states are moving to cut Medicaid so they can balance their budgets. And part of those cuts include reducing hospital funding.

Not all states are reducing their hospital funding. Some are reducing Medicaid benefits, others are paying providers less, some are tightening eligibility, and still others are doing a combination of whatever it takes to balance their budgets.

“With more people on Medicaid, states will have to continue to ratchet down payments and limit services,” Nina Owcharenko, director of the center for health policy studies at the conservative Heritage Foundation, said in a Kaiser Health News article produced in collaboration with USA Today.

Here are some of the states and the cuts they made, most of which went into effect in July:

  • Alabama: Doctors’ and dentists’ pay was cut 10%, and coverage for eyeglasses was eliminated.
  • California: Reimbursements to private hospitals were cut by $150 million, and a $15 fee was added for those who go to the emergency room for routine care.
  • Florida: Funding to hospitals that treat Medicaid patients was cut by 5.6%, which followed a 12.5% cut last year. The Sunshine State is also seeking permission to cap emergency room coverage at six visits a year and limit non-pregnant adults to two primary care visits a month.
  • Illinois: Eligibility was raised to eliminate more than 25,000 adults from the program. Non-pregnant adults now have a copay for prescriptions and are limited to four prescriptions a month.
  • Wisconsin: Monthly premiums  for most non-pregnant adults with incomes above $14,856 were added or increased.

According to a 50-state survey by Kaiser Health News for USA Today, Colorado, Hawaii , Louisiana, Maine, Maryland, New Hampshire and South Dakota are making reductions to their programs as well. And Connecticut is looking at cuts that’ll likely go into effect this fall.

Not all of the news is bad, however.

Some states have actually increased their Medicaid benefits. For instance, Arizona is upping its pay for mental health providers in April. And other states are trying to get back to the benefits they had before the recession forced them to make cuts.

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