Report says Medicaid cuts will put jobs and business at risk

Wednesday, June 29, 2011

A new report shows cuts to Medicaid will hurt more than the health of Missourians, it will also put jobs and business activity at risk.

Families USA, a national not-for-profit health care advocacy organization, released a report Tuesday detailing the effect Medicaid cuts included in the budget adopted by the U.S. House of Representatives will have on each state.

This budget, sponsored by Rep. Paul Ryan, R-Wis., calls for a 5 percent cut to Medicaid in 2013, a 15 percent cut in 2014 and a 33 percent cut in 2021. It will change the way states receive Medicaid funds. Currently, states receive a federal match for each dollar spent on Medicaid determined by a formula based on state per-capita income. Ryan's budget bill changes future Medicaid funding to a block grant given to each state.

"Every federal Medicaid dollar that flows into a state stimulates state business activity and generates jobs," said Ron Pollack, executive director of Families USA during a telephone news conference Tuesday. "Conversely and tragically, for Missouri, cutting Medicaid funds not only hurts seniors, people with disabilities, and children who count on the program as their lifeline, but it also results in fewer jobs and stunts the economic recovery."

'Jobs at Risk'

The report, "Jobs at Risk," looks at the economic effect of a 5 percent, 15 percent and 33 percent cut in current Medicaid funding levels.

According to the report, a 5 percent cut would cost Missouri almost $290.7 million in federal Medicaid dollars, and put at risk approximately $633.7 million in business activity and 5,330 jobs. Nationwide, a 5 percent reduction would mean $13.75 billion in business activity would be at risk.

Missouri would lose nearly $872.1 million in federal Medicaid dollars jeopardizing about $1.9 billion in business activity and 16,000 jobs as a result of a 15 percent cut; nationally, that would amount to $41.25 billion in business activity at risk.

A 33 percent reduction would cost Missouri $1.9 billion in federal Medicaid spending and put approximately $4.2 billion in business activity and 35,210 jobs at risk. For the U.S., a 33 percent cut would mean $90.8 in business activity would be in jeopardy.

The Medicaid reimbursements local health care providers receive already do not cover the full cost of providing care, said Charlotte Craig, director of the Cape Girardeau County Public Health Center.

The center's children's clinic primarily serves Medicaid patients, about 4,000 a year, Craig said.

Medicaid provides about half the clinic's funding; the remainder comes from a local tax levy that supports the health department. Although she hadn't researched this specific budget proposal, she said any cut to the Medicaid program would have an effect on the health department clinic and the children it serves.

When the clinic opened in 1992, most private physicians would not accept Medicaid patients, Craig said, but now Medicaid patients do have more options including CrossTrails Medical Center.

CrossTrails provides medical and dental services on an income-based sliding fee scale and served 5,000 children on Medicaid last year, said Ron Camp, CrossTrails CEO.

"These cuts are going to hurt children," Camp said. "Without Medicaid, a lot of these children wouldn't be able to come see a dentist and that affects their health and their well-being."

Camp said his clinic also sees about 1,000 adult Medicaid patients.

About 30 percent of CrossTrails revenue comes from Medicaid, so reductions in reimbursements would force the organization to look at ways to cut costs.

"In the health care industry, the bulk of your expenses are your employees. It's a service industry," Camp said.

CrossTrails employs about 75 people at its three clinics in Cape Girardeau, Advance and Marble Hill, Mo.

Not the time

With the U.S. economy already in a vulnerable position, the Families USA report says now is not the time to cut a program that helps families who have fallen on hard times.

While some families would make tough choices, like paying a medical bill instead of paying their phone bill, to try to provide medical care for their children out of their own pockets, Camp said Medicaid cuts could leave some children without the care they need.

Democratic St. Louis Congressman William "Lacy" Clay said during Tuesday's Families USA telephone news conference that he is serious about reducing federal spending, but Medicaid cuts are the wrong way to go about it.

"Trying to balance the budget on the backs of the sickest and the poorest is not what America is about and it's not what Missouri is about," he said.

Attempts to reach Rep. Jo Ann Emerson on Tuesday were unsuccessful.

mmiller@semissourian.com

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408 South Broadview Street, Cape Girardeau, Mo

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