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Hurricane Katrina not only wreaked havoc throughout the Gulf region, it continues to roil Congress as legislators debate national priorities and the impact of proposed budget cuts on vulnerable Americans. Accordingly, in late November, despite an earlier budget blueprint requiring potentially deep Medicaid cuts, Congress has yet to resolve how to achieve Medicaid savings and how extensive any budget cut would be. The answers to those questions await a Senate-House conference committee, which will have to reconcile the very different paths the two chambers took to budget-cutting. With NMHA and affiliates working to steer Congress away from deep Medicaid cuts with a “do-no-harm” message, unrelenting advocacy work has temporarily set back efforts in the House of Representatives to enact such cuts. The House leadership, which backed a package that included some $10 billion in Medicaid cuts (75 percent of which would fall directly on program beneficiaries), postponed a scheduled Nov. 10 vote on the bill because it lacked the votes needed for passage. Our joint advocacy efforts forced House leaders to re-examine their Medicaid proposals and ultimately to scale back some of its provisions in order to eke out passage of a revised budget-cutting bill on Nov. 18 by a 217-215 margin. The House-passed bill yielded ground in scaling back one of the most egregious of its proposals that would have permitted states to increase cost-sharing from $3 to $5 for beneficiaries with incomes below the poverty level. Yet the House-passed bill would still permit the cost burden on those individuals to increase in line with medical inflation and to increase even more for other beneficiaries. In fact, most of the Medicaid savings in the House-passed bill would come from increased cost-sharing and premiums and reduced benefits for low-income beneficiaries. The House measure poses other dangers by allowing states to restructure their Medicaid programs in the vein of private insurance. It’s important to note that this would also allow states to avoid the Early Periodic Screening Diagnosis and Treatment (EPSDT) requirement, which is so critical to ensuring that children on Medicaid who have mental health disorders receive treatment. In addition, given the discrimination that individuals with mental illness routinely face in the private insurance market, this flexibility to remodel Medicaid after private insurance could lead to discriminatory restrictions on mental health treatment under Medicaid. The Senate, which narrowly passed its budget measure in early November, lessened the impact on Medicaid by including reductions in Medicare spending. Sens. Gordon Smith, R-Ore, and Olympia Snowe R-Maine, were instrumental in efforts to minimize the magnitude and impact of Medicaid cuts. The Senate bill would cut Medicaid spending by $4.3 billion and Medicare spending by $5.7 billion. Most of the Senate’s Medicaid savings would result from changing the reimbursement to pharmacies for prescription medications and by increasing the rebates paid by pharmaceutical manufacturers. Most of its Medicare cuts would result from reducing reimbursement to Medicare managed care programs. The Senate bill does provide some good news: it would enable families who have disabled children and incomes below 300 percent of poverty ($58,050 a year for a family of four) to buy Medicaid coverage for their disabled children. And it would establish a $218 million demonstration project to enable 10 states to receive waivers to provide home- and community-based care services to children who would otherwise be placed in psychiatric residential treatment centers. Both the Senate and House budget bills would also provide some assistance to Katrina survivors in authorizing 100 percent federal funding for any state covering Medicaideligible Katrina survivors from the hardest hit counties in Louisiana, Mississippi and Alabama. But the bills would not help those who do not qualify for Medicaid regardless of income levels (including childless adults) or other individuals who do not meet income-eligibility requirements, which states often set well below the poverty level. Both the House and Senate rejected a very troublesome administration proposal to limit reimbursement for rehabilitation services that would have prohibited Medicaid coverage if other government programs could potentially pay. But both bills do include provisions to redefine what services qualify for coverage as targeted case management (TCM) under Medicaid. These provisions are said to simply codify current guidance on the types of activities that should qualify for Medicaid funding as TCM, but they also include problematic language regarding third-party liability. We are attempting to win support for changes in that provision to protect Medicaid reimbursement for targeted case management services. NMHA is an important voice in the fight against any cuts that would harm beneficiaries. In addition to working closely with key members in both the Senate and House, NMHA participated in a Sept. 28 press conference and congressional briefing that highlighted the importance of Medicaid to people who have chronic conditions. The events were organized by the National Health Council and the Georgetown Health Policy Institute, which released a report, "Why Medicaid Matters." NMHA contributed to the report, which included a consumer profile from among the many submitted to us by MHAs.
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