Medical bills for poor keep growing
Schwarzenegger is back with new proposal to stop soaring care costs
By Jim Wasserman, The Associated PressMarch 7, 2005
SACRAMENTO -- For all the deadly foes he vanquished on the silver screen, Gov. Arnold Schwarzenegger finally may be meeting his match -- the growing medical bills of poor people.
In his rookie year, Schwarzenegger tried simply to slash the state's costs by $900 million, then backed down after roars of protest. Now he's back with a new attack, one of many experiments proposed by U.S. governors to cut states' soaring medical costs. Schwarzenegger would limit a poor Californian's dental work to $1,000 a year, steer nearly 1 million more people into managed care networks and make families pay up to $27 a month in premiums for their government-funded medical help.
But advocates for 6.6 million low-income, disabled and elderly California residents are again trying to slow Schwarzenegger as he maneuvers the plan and its projected first-year $12 million in savings through the Legislature.
While Schwarzenegger has to cope with the problems of the nation's most populous state, he's not alone among governors in fighting the spiraling growth in costs for Medicaid, the $329 billion federal-state program that pays for healthcare for 53 million low-income Americans. In just about all the 50 states, Medicaid costs are rising rapidly and squeezing governments, poor people, doctors, hospitals and other healthcare providers.
California's annual medical bills for the poor have grown by $4.5 billion since 1999, and now rival the yearly K-12 education budget. Nationally, such medical costs have already passed education inside all combined state budgets, state officials report. Worse, as states have survived the worst of their financial problems, President Bush has complicated their struggle by proposing a $40 billion or more 10-year cut in Medicaid. Governors meeting last week in Washington told Bush their cash-strapped states can't handle such cuts without hurting their poorest residents.
The combination of state and federal budget woes "puts the Medicaid program in a very vulnerable position," threatening states, beneficiaries and providers, said Robin Rudowitz, senior associate with the Washington, D.C.-based Kaiser Commission on Medicaid and the Uninsured.
Dozens of states are trying to balance preserving the program with stopping its rapid growth. Rising Medicaid costs -- up 40 percent in the past five years because of job layoffs and higher medical charges with no end in sight -- are forcing draconian choices. Governors pressed Bush for more flexibility from their federal partners for cost-curbing experiments, an argument the administration said it is considering.
"At the state level, governors are being forced to choose between healthcare and education," said Raymond C. Sheppach, executive director of the National Governors Association.
Democratic Tennessee Gov. Phil Bredesen is trying to cut 323,000 people from his state's Medicaid system known as Tenn-Care, while in Connecticut, 13,000 low-income working parents are scheduled to lose Medicaid coverage this spring. More states are demanding co-payments from users, curbing costs of prescription drugs or simply reducing benefits. In an extreme example, a Colorado lawmaker has proposed that his state seize estates of Medicaid patients after they die to recoup the growing cost to Colorado taxpayers.
Schwarzenegger's plans for slowing growth in California's $34 billion version of Medicaid -- called Medi-Cal -- accompany a goal to cut welfare grants by 6.5 percent and eliminate automatic cost-of-living hikes in welfare benefits. The ambition, said Sandra -Shewry, Schwarzenegger's director of health services, is to design a new delivery system that gradually saves $254 million over five years rather than simply "cutting the Medi-Cal program."
But he's also proposing cuts
In January, Schwarzenegger proposed a $111.7 billion budget that would cap dental benefits at $1,000 a year. Many states already cap such spending, as do private sector health plans. Of California's 3 million Medi-Cal dental patients, administration officials said, fewer than 100,000 had dental bills last year higher than $1,000. The budget also proposed that at least 550,000 Medi-Cal patients with incomes above the poverty level begin paying monthly premiums for their care -- $10 a month for adults, $4 monthly per child or a $27 family maximum.
By Jim Wasserman, The Associated PressMarch 7, 2005
SACRAMENTO -- For all the deadly foes he vanquished on the silver screen, Gov. Arnold Schwarzenegger finally may be meeting his match -- the growing medical bills of poor people.
In his rookie year, Schwarzenegger tried simply to slash the state's costs by $900 million, then backed down after roars of protest. Now he's back with a new attack, one of many experiments proposed by U.S. governors to cut states' soaring medical costs. Schwarzenegger would limit a poor Californian's dental work to $1,000 a year, steer nearly 1 million more people into managed care networks and make families pay up to $27 a month in premiums for their government-funded medical help.
But advocates for 6.6 million low-income, disabled and elderly California residents are again trying to slow Schwarzenegger as he maneuvers the plan and its projected first-year $12 million in savings through the Legislature.
While Schwarzenegger has to cope with the problems of the nation's most populous state, he's not alone among governors in fighting the spiraling growth in costs for Medicaid, the $329 billion federal-state program that pays for healthcare for 53 million low-income Americans. In just about all the 50 states, Medicaid costs are rising rapidly and squeezing governments, poor people, doctors, hospitals and other healthcare providers.
California's annual medical bills for the poor have grown by $4.5 billion since 1999, and now rival the yearly K-12 education budget. Nationally, such medical costs have already passed education inside all combined state budgets, state officials report. Worse, as states have survived the worst of their financial problems, President Bush has complicated their struggle by proposing a $40 billion or more 10-year cut in Medicaid. Governors meeting last week in Washington told Bush their cash-strapped states can't handle such cuts without hurting their poorest residents.
The combination of state and federal budget woes "puts the Medicaid program in a very vulnerable position," threatening states, beneficiaries and providers, said Robin Rudowitz, senior associate with the Washington, D.C.-based Kaiser Commission on Medicaid and the Uninsured.
Dozens of states are trying to balance preserving the program with stopping its rapid growth. Rising Medicaid costs -- up 40 percent in the past five years because of job layoffs and higher medical charges with no end in sight -- are forcing draconian choices. Governors pressed Bush for more flexibility from their federal partners for cost-curbing experiments, an argument the administration said it is considering.
"At the state level, governors are being forced to choose between healthcare and education," said Raymond C. Sheppach, executive director of the National Governors Association.
Democratic Tennessee Gov. Phil Bredesen is trying to cut 323,000 people from his state's Medicaid system known as Tenn-Care, while in Connecticut, 13,000 low-income working parents are scheduled to lose Medicaid coverage this spring. More states are demanding co-payments from users, curbing costs of prescription drugs or simply reducing benefits. In an extreme example, a Colorado lawmaker has proposed that his state seize estates of Medicaid patients after they die to recoup the growing cost to Colorado taxpayers.
Schwarzenegger's plans for slowing growth in California's $34 billion version of Medicaid -- called Medi-Cal -- accompany a goal to cut welfare grants by 6.5 percent and eliminate automatic cost-of-living hikes in welfare benefits. The ambition, said Sandra -Shewry, Schwarzenegger's director of health services, is to design a new delivery system that gradually saves $254 million over five years rather than simply "cutting the Medi-Cal program."
But he's also proposing cuts
In January, Schwarzenegger proposed a $111.7 billion budget that would cap dental benefits at $1,000 a year. Many states already cap such spending, as do private sector health plans. Of California's 3 million Medi-Cal dental patients, administration officials said, fewer than 100,000 had dental bills last year higher than $1,000. The budget also proposed that at least 550,000 Medi-Cal patients with incomes above the poverty level begin paying monthly premiums for their care -- $10 a month for adults, $4 monthly per child or a $27 family maximum.
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