Replacing Medicaid

The runaway cost of providing health care and special services to the needy was illustrated again in Jefferson City with the Missouri Legislature's recent approval of a supplemental spending bill. Supplemental spending occurs when state programs cost more than appropriated funding.

In this case, the supplemental spending totaled $217 million. Of that, $190 million -- 88 percent -- was for Missouri's Medicaid program.

Overall, state spending on Medicaid in the current fiscal year will reach $5 billion. And even though there has been a lot of news coverage about Medicaid "cuts" in the budget for the fiscal year that starts July 1, there will in fact be another increase, even though changes in qualifications will eliminate some recipients.

At the rate spending has been growing for this single component of Missouri's budget, all of the state's revenue would have to be earmarked for Medicaid within a decade. Given that projection, legislators had no choice but to grapple with ways to control this high-cost program.

Less noticed but perhaps even more important is a provision in the legislature-approved overhaul of Medicaid that ends the program by July 1, 2008, just three years away.

The bill sent to Gov. Matt Blunt calls the formation of a special legislative committee to come up with a program that provides essential services for the needy but eats up less of the state's revenue.

That task is monumental, given the complexity of medical care and enormous inflation associated with health care in general.

Clearly, something had to be done about the cost of Medicaid. With just three years before that 2008 deadline, a major effort will be needed to come up with something better.