Operation Medicaid: the War on Women

by Georgana Hanson 

Policy makers at the state and federal levels are taking steps to undermine the capacity and effectiveness of the Medicaid program. With the states trying to close enormous budget shortfalls, and the federal government trying to free up funds for its $350 billion "tax relief” package, tens of thousands of the nation's poorest citizens—most of them women and children—stand to simultaneously lose health care services and fall deeper into poverty. The following is an overview of the current Medicaid program, a forecast for the likely changes ahead and a call to action for those who believe that all women deserve access to basic, affordable and necessary health care services.

Medicaid: a Woman's Issue

Women are substantially and disproportionately impacted by virtually any alterations to Medicaid, a program that provides critical health care coverage to some 40 million Americans. About half of Medicaid recipients are children, and another 12 million—70 percent of recipients ages 15 and older—are women. 1 Women are twice as likely as men to qualify for the program because they tend to be poorer and more likely to meet the program's criteria for income and assets (they are more likely to hold low-wage jobs that lack benefits, to be full-time uncompensated caregivers or to have health conditions that affect their ability to work). Medicaid coverage provides women with preventive services including family planning, cancer screenings and a host of other benefits.

Of growing concern is the increasing number of low-income elderly who cannot afford prescription drug coverage and long-term medical care. Currently, women over the age of 65 represent 70 percent of elderly Medicaid recipients.2 As a whole, the elderly population comprises only 10 percent of Medicaid enrollees but expends 27 percent of the program's financial resources.2 Much of this is due to the high costs associated with caring for a population with extensive health care concerns and needs, such as chronic conditions that necessitate expensive devices and/or prescriptions. Medicaid cuts would render thousands of elderly women without coverage for prescription medications or long-term care services—services that are barely, if at all, affordable even to those who do not qualify for Medicaid.

The Current Forecast: Bad News for Women

Launched in 1965, Medicaid is a joint federal and state program to provide medical care to welfare recipients. Throughout the years, various legislative amendments have transformed Medicaid into a "safety net" program that extends coverage to a broad range of low-income individuals and families. Current spending on the program accounts for one in five health care dollars in this country, with services including preventive care, prescription drug coverage, family planning, longterm care, prenatal care and hospital care.3 Medicaid is funded through a federal matching program based on each state's per-capita income; those with lower incomes receive more federal funds to match their own contributions.

Medicaid is counter-cyclic; that is. Sufficient funding usually comes when the economy is favorable, unemployment is low and demand for Medicaid is also low. In economic downturns like these, however—with state and federal governments alike experiencing deficits, high unemployment and great Medicaid demand—the program is susceptible to devastating cuts. A recent survey by the Kaiser Family Foundation found that 49 states plan to alter some aspect of their Medicaid program in the next year.4 Such alterations could include increasing eligibility restrictions, reducing benefits, reducing or freezing provider payments and increasing enrollees' financial responsibility. These alterations could affect women in the following ways:

• Loss of Coverage: Tighter eligibility restrictions could force women and girls out of the Medicaid program. If the states raised their income requirements, many low-income mothers would be ineligible for benefits. If the states lowered the age limit for children (currently as high as 21 in some states), many adolescent women would lose access to family planning and other preventive services. Women who are the primary caretakers in their families would also be hurt by having to dig into their own pocket or forego care if, for instance, their aging parent[s] or children were to lose coverage.5
• Reduction in Benefits: The need to reduce Medicaid spending could cause state governments to alter or eliminate certain benefits. For fiscal year 2003, 25 states plan to reduce or abolish dental coverage, coverage for inpatient hospital days and coverage for occupational or physical therapy. 1 Since 77 percent of Medicaid dollars goes toward caring for only 27 percent of the Medicaid population (the elderly and disabled), it would not be surprising to see major alterations to their benefits, including limiting prescription drug coverage and long-term care coverage. 3
• Increased Financial Burden for Enrollees: Seventeen states plan to raise Medicaid co-payments.4 Research has demonstrated that when the financial burden of health care is shifted to the patient, use of care decreases. This is of grave concern when applied to the Medicaid population. As stated previously, Medicaid recipients have poorer health than the population at large. If states raise co-payments, many Medicaid recipients will be unable to afford to access primary care services (e.g., family planning. STD testing, cancer screening, annual exams) regularly, and their health status will deteriorate further.
• Provider Payment Alterations: As an alternative to cost-containment methods that directly affect Medicaid beneficiaries, 37 states plan to alter provider payments in FY 2003.4 Possibilities include reducing reimbursement fees, reducing scheduled rate increases and freezing current provider rates. This could compel many physicians who currently accept patients with Medicaid coverage to drop out of the program, substantially curtailing the ability of Medicaid beneficiaries to find care.

Even as the states debate changes like these, they are moving forward on other cutbacks. Changes made already, for example, have eliminated Medicaid coverage for 370 women with breast or cervical cancer in Texas and reduced access to family planning services for 160,000 new mothers in Missouri from two years to one.6

The Administration's Proposal: a Blockheaded Approach

On January 31, Tommy Thompson, secretary of the U.S. Department of Health and Human Services, provided a sneak peak of the Bush Administration's Medicaid proposal.7 Under it, states would have the option of receiving additional federal assistance for their Medicaid programs—approximately $12.7 billion over seven years—in the form of two fixed block grants. The tradeoff: states must repay the excess funds by receiving less federal support in the future. One block grant would cover services deemed acute care, and the second would cover services that fall under the umbrella of long-term care.

The Administration touts its Medicaid plan as giving states greater flexibility and financial support. Neither statement is 100 percent accurate. States that accept the block grants would be able to disregard previous coverage requirements and tailor their benefits to the needs of their Medicaid beneficiaries. At first glance this seems like a positive step, but its true implications emerge when considered in the light of financial support.

As stated earlier, states receive federal assistance for their Medicaid programs based on their per capita income as well as their own contributions toward their Medicaid program. This is what makes Medicaid an entitlement program: all who are eligible for coverage may receive benefits. Under the Administration's proposal, states that choose to accept the federal block grants would receive a fixed amount of federal support for the next seven years. If state revenues continue to decline, and eligibility numbers outpace what the states can afford, states could be forced to slash benefits more deeply and further restrict eligibility requirements. Medicaid would no longer be considered an entitlement program, and more and more individuals and families would go without coverage. In essence, block grants could restrict states' ability to offer various needed benefits, thereby reducing their flexibility to cover low-income women, men and children.

Women in particular would suffer under the Administration's proposal. Under current Medicaid regulations, family planning services have a match rate of 90 percent, i.e., states are responsible for only 10 cents of every dollar spent on family planning.' States that accept the Administration's plan would lose that matching rate, and therefore would lose any incentive for offering family planning to Medicaid recipients. Services tied to pregnancy and birth could also be reduced, as could the number of women eligible to receive these services. Block grants would also allow states to extract co-pays from women on services that are now free, such as family planning, pregnancy-related visits and delivery. Many women with limited financial resources would not be able to afford co-pays, putting care out of their reach.

What Can Be Done?

Although the Administration's proposal is subject to legislative approval, the states' deficits are real and in dire need of federal assistance. ^4,7 Before states are forced to cut benefits and drop enrollees, the country must establish a plan that will provide states with some fiscal relief while encouraging them to broaden coverage to those in need. The Administration's plan hurts the states and Medicaid beneficiaries far more than it helps.

As a country we must find ways to contain Medicaid costs without burdening or harming low-income individuals. Advocates for women's health cannot be silent. Educate your congressional representatives on the current threats to Medicaid funding and benefits, and advocate for non-restricted financial support to the states.

Georgana Hanson, a recent graduate of Boston University's School of Public Health, is the Network's clearinghouse coordinator.

REFERENCES

1. The Kaiser Commission on Medicaid and the Uninsured. The Medicaid Resource Book, July 2002. Available at: http://www.kff.org/content/2003 /2236/.

2. Kaiser Family Foundation. Med/caid's Role for Women. November 2002. Available at: http. //www. kff. org/content/2000/2205/.

3. The Kaiser Commission on Medicaid and the Uninsured. States Respond to Fiscal Stress: Implications for Elderly Women on Medicaid, April 2003.

4. The Kaiser Commission on Medicaid and the Uninsured. State Budget Constraints: The Impact on Medicaid, January 2003.

5. The National Women's Law Center. Women and State Medicaid Budget Cuts, April 2003.

6. Hudman J, O'Malley M. Health Insurance Premiums and Cost-Sharing: Findings From the Research on Low-Income Populations. Kaiser Commission on Medicaid and the Uninsured. March 2003. Available at: http://www.kff.org/content/2003/4072/.

7. National Health Law Program. The Administration's Proposal for Medicaid: Block Grants Revisited, February 2003.