Medicaid cuts compound health, economic crises

By Marshall Allen

Tuesday, Dec. 2, 2008 | 2 a.m.

There wasn’t broad consensus for decreasing gas consumption until we started paying $4 a gallon.

Could there be a parallel with a call for universal health care, as the cost of health care grows out of the reach of many who need it?

The problem is compounding: The faltering economy is increasing the number of poor and uninsured Nevadans at the same time that the state is drastically reducing their health care coverage.

In September, Medicaid, the state’s health insurance for the poor, cut hospital reimbursement rates across the board by 5 percent. That led University Medical Center, Clark County’s only public hospital, to ditch its cancer program — and hundreds of patients who depended on it for treatment.

Some pediatric specialists suffered cuts of as much as 41 percent, causing them to stop accepting new Medicaid patients. That means low-income children with bone and spine problems, for instance, may now need to leave Las Vegas for treatment.

The situation may soon become even worse.

Medicaid’s proposed budget for the 2010-2011 biennium includes an additional 5 percent cut to hospital reimbursements in July. In addition, the Medicaid eligibility of people who qualify for the Temporary Assistance for Needy Families program will be reduced from 24 months to 15 months. And the Nevada Check Up program, which provides low-cost health care coverage to children not covered by Medicaid, will be capped at 25,000 youngsters. The number of Nevada Check Up children may already have reached the cutoff level but it’s not known because the staff hasn’t kept up with the applications, officials say.

Chuck Duarte, administrator for the Medicaid and Check Up programs, says the situation could be even more dire if the economy continues to suffer. So far the 2010-2011 budget is based on a 14 percent overall reduction in expenses, but he has also been required to draw up scenarios for overall reductions of 24 or 34 percent. The hardest hit will be the poor, frail and elderly.

“This will affect people’s lives and livelihoods,” Duarte said.

The cutbacks to health coverage for the poor come at a time when the flagging economy causes more people to need the services. Duarte says if legislators don’t find a solution, and the situation worsens in 2010 and 2011, the state will have to eliminate almost all of its optional services and eligibility groups.

Pulling money from Medicaid takes revenue from health care providers who depend on it to run their businesses, Duarte says. In this way, the Medicaid cuts push the economy further into a downward spiral. In the long run, health care entrepreneurs will cut jobs and be “loath to reinvest” in Nevada, he worries. Other states are facing similar problems.

“You’re seeing a tipping point of a health care crisis that’s going to have an effect on the economy overall,” Duarte said.

When meeting the health care needs of the poor and uninsured is delayed, or chronic conditions go untreated, patients often require more expensive and protracted hospital stays. Thus, the cuts to health coverage for the poor will likely lead to higher long-term costs paid by everyone else, in the form of tax money spent and insurance premiums.

Nancy Menzel, an associate professor at UNLV and president-elect of the Nevada Public Health Association, says the health care crisis makes a case for universal health insurance coverage.

“It’s unprecedented because we have so many more poor people in need of health care and the so-called safety net has vanished,” Menzel said.

Moral arguments for insuring the poor may fall on deaf ears, Menzel says, but once the wealthy and insured understand how the uninsured population affects their lives, they might be more motivated to work toward universal health care.

If the homeless can’t be treated for communicable diseases, and their children go to school and infect the children of insured residents, people will pay attention, she says. And when more people who are employed become uninsured because of rising health care costs, others will take notice.

“When many people see the negative effect, that’s going to make a difference,” Menzel says.