Medicaid Cuts Proposed Again

Governor Bill Richardson announced in September that the state needs to take immediate steps to control Medicaid costs, such as reducing benefits, restricting eligibility, or cutting rates paid to providers. The Human Services Department followed up by suggesting a number of proposals to cut back the Medicaid program, in hopes of saving as much as $70 million in state funds. If implemented, the cuts would seriously affect services to persons with disabilities.

HSD's proposals include drastic steps such as the elimination of coverage for prostheses (artificial limbs) as well as non-emergency transportation, such as trips to doctors or therapists. It would also cut back eligibility for community-based services under Medicaid waiver programs, at a time when thousands of people are already on waiting lists for such services.

Similar proposals by the Johnson administration to scale back benefits and eligibility requirements were extensively reviewed by last year's legislative Medicaid Reform Committee, which specifically and nearly unanimously rejected them. That committee heard testimony indicating that for every dollar spent on Medicaid by the state, there was a beneficial impact of $5.70 on the state economy. The reduction of state spending by $70 million would mean the loss of approximately $200 million in available federal matching funds.

A panel of consumers, advocates and providers gave recommendations to the Department earlier this year that have the potential to save the state millions of dollars in the Personal Care Option program, but the Department has yet to act on them and they are not included in the current proposals.