In a letter responding to 33 governors' request for a waiver to cut Medicaid enrollment, HHS Secretary Kathleen Sebelius cited three ways the governors could reduce Medicaid spending without removing people from coverage, according to a report by The Hill.
Saying she is still reviewing the waiver requests, Ms. Sebelius listed ways to cut costs short of violating federal "maintenance of effort" requirements.
1. Reduce optional programs and services, such as prescription drugs, dental and speech therapy, which account for 40 percent of benefit spending.
2. Raise out-of-pocket costs for Medicaid recipients.
3. Create programs to lower costs and improve quality for high-cost Medicaid recipients, who make up 1 percent of enrollment but account for 25 percent of costs.
Ms. Sebelius added that HHS is developing ways to help Medicaid programs purchase drugs more efficiently and is creating a new office to improve management of Medicare-Medicaid "dual eligibles," who tend to have greater healthcare needs.
States have strong reasons to reduce Medicaid enrollment. This June, as states struggle to balance their budgets, they will lose enhanced federal Medicaid subsidies, which pumped more than $100 billion into state programs over the past two years.
However, federal authorities are concerned about states reducing enrollment in a bad economy and three years before they have to add an estimated 16 million Medicaid recipients as part of the healthcare reform law.
Read The Hill report on Medicaid.
Read more coverage of Medicaid cuts:
- States Nearing Showdown With Feds on Medicaid Payments
- CMS Head Advising States With Medicaid Funding Problems
- Governors Want Reform Law Changed So They Can Reduce Medicaid Coverage
Saying she is still reviewing the waiver requests, Ms. Sebelius listed ways to cut costs short of violating federal "maintenance of effort" requirements.
1. Reduce optional programs and services, such as prescription drugs, dental and speech therapy, which account for 40 percent of benefit spending.
2. Raise out-of-pocket costs for Medicaid recipients.
3. Create programs to lower costs and improve quality for high-cost Medicaid recipients, who make up 1 percent of enrollment but account for 25 percent of costs.
Ms. Sebelius added that HHS is developing ways to help Medicaid programs purchase drugs more efficiently and is creating a new office to improve management of Medicare-Medicaid "dual eligibles," who tend to have greater healthcare needs.
States have strong reasons to reduce Medicaid enrollment. This June, as states struggle to balance their budgets, they will lose enhanced federal Medicaid subsidies, which pumped more than $100 billion into state programs over the past two years.
However, federal authorities are concerned about states reducing enrollment in a bad economy and three years before they have to add an estimated 16 million Medicaid recipients as part of the healthcare reform law.
Read The Hill report on Medicaid.
Read more coverage of Medicaid cuts:
- States Nearing Showdown With Feds on Medicaid Payments
- CMS Head Advising States With Medicaid Funding Problems
- Governors Want Reform Law Changed So They Can Reduce Medicaid Coverage