Alibi V.13 No.16 • April 15-21, 2004 

Ortiz y Pino

Medicaid Isn't Out of Control, Lawmakers Are

The federal deficit causes states to suffer

If we've heard it once, we've heard it a hundred times in the past 10 months: The state's Medicaid budget is spiraling out of control. That's what Gov. Bill Richardson said, the legislative leaders warned, the policy wonks opined and some political pundits editorialized.

Their unanimous opinion definitely created the impression for the rest of us that something bad must be going on, whether mismanagement, opportunism or outright fraud. Why else would the program's costs be growing by 16 percent a year for the last three years, when the overall rate of inflation for that period is but a tiny fraction of that figure?

To contain that supposed explosive growth, the governor asked for and the Legislature provided, a budget for the coming fiscal year that forces a 10 percent (or about $45 million in general fund money) reduction in the program's expenditures.

That still will represent a 6 percent growth in program costs over the current year, but is far short of what the recent trend of 16 percent a year growth would have required. It means, in other words, some hard decisions have to be made by the state officials charged with harnessing this enormous chunk of the New Mexico budget.

They are talking about cutting reimbursements to providers (doctors, hospitals, clinics, nursing homes and all the assorted "allied" professionals who minister to the health needs of our citizens).

They are talking about exercising tighter administrative controls, including requiring recipients to come in for recertification every six months instead of annually and automatically closing the cases of those who don't come in for that recertification.

They are talking about no longer reaching out aggressively to eligible but nonparticipating populations (mostly kids living in working-class families without insurance).

They are even talking about reducing some benefits, cutting back on dental services, providing cheaper eyeglasses and hearing aids, paying less for the "personal care option" that enables many frail elderly to avoid going to nursing homes.

All of that is part of the overall "cost containment" strategy required by the difference between what was appropriated and what was needed. I don't envy the Medicaid administrators for what have to be the painful, practically impossible choices they are faced with.

The wailing and the gnashing of teeth across the land when the cuts are made will be terrible to hear. I would only suggest that amid the general protests that get voiced, we should reserve a major piece of our outrage for the most central villains in this painful melodrama, our friendly federal officials in Washington.

You see, this enormous program, one that provides almost one out of every three New Mexicans with medical care; one which, after our public schools, is the single biggest portion of state spending, is suffering primarily from an illness for which there may be no cure: Federal poor mouth.

Actually, since the program is financed with individual states' money matched by the federal government at a variable rate state by state (depending on an arcane formula that relies heavily on poverty statistics), Medicaid in New Mexico now may have a bigger overall budget than public education does.

In the current fiscal year it is estimated that the full Medicaid budget in New Mexico, state and federal money combined, will total just under $2.5 billion. It ain't, as they say in Logan, hay.

And if the rising cost of the program is causing acid indigestion in New Mexico, it is doing the same in all 50 states. And in Washington, D.C., as well. So the feds, faced with deficits of obscene proportions (the Bush tax cuts for the wealthy not having generated the rising flood of prosperity they were over-enthusiastically described as generating) now are cutting back on their share.

Surprise! If you want to get a quick preview of what the fiscal revolutionaries who now call the shots in our nation's capital mean when they say "shrink government until it can be drowned in the bathtub," you need look no further than Medicaid.

It's all right there in the state Human Services Department's analysis of the Medicaid budget: "General Fund expenditures have increased a total of 16 percent; this is largely due to the decrease in Federal matching funds."

In other words, the feds can't balance their books, so they're reduced to "adjusting downward" their share of the Medicaid budget to save a few hundred million here and a few hundred million there. This leaves New Mexico (and 49 other states) scrambling to make up the difference.

When that can't be done because of the numerous other demands on state budgets, program services naturally have to be cut back. When the program services are reduced that means someone (a kid, a disabled person, a frail elderly man or woman) is doing without medical care. Manure slides down hill.

What it amounts to is that federal belt-tightening (forced by the tax cuts, the invasion of Iraq, the recession ... all of the above) is leaving Medicaid clients out in the cold. Meanwhile the deficit grows thanks to increased military spending without the tax-base to fund it. And that is what's picking the pockets of our state government.

The opinions expressed are solely those of the writer.