In his budget, Governor Ronnie Musgrove asked for $537 million for Medicaid, a small increase over the previous year. The legislature gave him half that. With some tobacco lawsuit settlement money and cost cutting, lawmakers narrowed the gap to $120 million. But that's as far as they would go. "Ladies and gentlemen, there ain't no more money down here," Public Health Committee Chairman Bobby Moody announced Monday on the floor of the state house. "We done turned every stone that had a few pennies on it, and we think we have put as much into Medicaid as we can possibly generate."
But Musgrove and his Medicaid executive director Rica Lewis-Payton don't think Moody and his colleagues have turned over enough rocks yet. Lewis-Payton has started to prepare the public for what those cuts will mean come July 1st when the budget takes effect by pre-announcing cutbacks in services. The slimmed-down Medicaid will not cover adults' eyeglasses, for example, or their dental care, wheelchairs or dialysis. Even more ominously, 13,000 nursing home residents will lose their coverage.
Musgrove says he may have to veto the whole budget and start again. The governor tried that tactic last year, and it backfired spectacularly when the legislature overrode him. It was a humiliating defeat, especially for a Democratic governor whose party holds a large majority in the state house. That's just one indication of how ugly the battle over Medicaid has turned.
Mississippians can take heart in one fact: most states are going through similar crises. Medicaid has grown too expensive, and with the economy only starting to recover, state budgets can't bear the costs anymore. This dilemma arises just as Americans need Medicaid more than ever before. Last year, Medicaid covered 44 million Americans at a cost of $224 billion, with states kicking in 42% of that money. During the same period, 2 million Americans lost their employer-provided health insurance. So just as more people need help, states are being forced to either limit eligibility for coverage or pare services to the absolute minimum.
Health care is always a leading concern to voters, so when times are flush, governors and legislators are happy to expand Medicaid with all the extra money in their coffers. It wasn't always this way: when Lyndon Johnson first proposed the concept, Medicaid was designed as limited health coverage for Americans on welfare. At that time, more than a third of Americans didn't have any form of health insurance. Medicaid was a welcome solution. But as health care costs skyrocketed over the last 15 years, Medicaid wasn't providing enough help. Many Americans who weren't on welfare but living just above the poverty line couldn't get health insurance.
The federal government wasn't doing anything to help, but it allowed states to test their own solutions. States expanded services and coverage. But as costs continued to rise, Medicaid budgets ballooned. In 1987, the average state spent 8% of its general budget on Medicaid. A decade later it was 15%. Now it's even higher, rivaling education as the single greatest state expenditure. And when all those tax revenues provided by the booming '90s economy dried up, Medicaid costs became impossible to pay leading to dilemmas like Mississippi's. Neither the governor nor the legislature wants to be the villain who takes people's health coverage away, and so in many states, the government is performing incredible fiscal tricks, diverting money from tobacco settlements or reserve funds to cover costs for now. In other states, the governments are cutting back on Medicaid and hoping to survive voters' anger in November. Either way, it's painful.
The National Governors Association and other state government lobbying groups have been begging for enough cash to shore up Medicaid. The states also want Congress to change Medicaid rules to make the program more competitive with private health insurance and to allow better coverage. That's quite a list of demands, but the states feel they're entitled. After all, the federal government has done little to expand health coverage for Americans over the past 10 years. Even now, Congress and the President are still fighting over whether to allow people who already have health insurance to sue their carriers for denial of coverage. Prescription drug coverage for seniors on Medicare is still a pipe dream. Nothing is being done for the uninsured.
What are the odds of D.C. picking up the slack now and helping the states out? The same odds that John Ashcroft's singing will land him a performance at Carnegie Hall. It might have been possible when the federal government was running a large surplus. But thanks to the drain of 9/11 and the soft economy, this year's money is gone. More importantly, the president's tax cut has made sure surpluses won't be coming back for a decade or more. The states are on their own. Sadly, of course, so are the uninsured.