Debate continues on how to change Medicaid

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(Host) One of the biggest challenges facing lawmakers this year is how to reach an agreement with the Douglas administration over a significant shortage in the state’s Medicaid program.

VPR’s Bob Kinzel reports.

(Kinzel) The Medicaid shortfall is receiving enormous attention because of the sheer size of the problem. The Douglas administration expects a $30 million deficit in the current fiscal year and they’re projecting a nearly $80 million shortfall next year if no steps are taken to change the program.

The key to the governor’s plan is a waiver from the federal government to give the state much more flexibility in using federal funds. In return, the state would agree to a smaller rate of increase in the future.

Douglas’s plan also raises premium levels for many participants of the program, it cuts payments to health care providers – including doctors and hospitals – by $21 million and it provides subsidies for uninsured people who have the opportunity to receive health insurance coverage at work.

Senate Health and Welfare Chairman Jim Leddy has a lot of concerns about the governor’s plan because he feels it makes a fundamental shift in the role of the federal government. Leddy says Medicaid would no longer be an entitlement program and that the state would have to make significant cuts if enrollment rises in the future because the state would no longer be reimbursed for specific medical services:

(Leddy) “If we fundamentally sell out by agreeing to a block grant in Medicaid that means that two or three or four years down the road means that the crisis of the moment has become far greater because we essentially have abandoned people. It’s very shortsighted to look only at the financial problems we have today, which are serious and which we must address, but to do it in a way that forfeits the future. I think that is the challenge and that is the risk.”

(Kinzel) Douglas believes the federal government will support the state’s waiver proposal and he argues that it’s critical for the Legislature to deal with this issue this year:

(Douglas) “Well we’re taking a risk without question but frankly the status quo is riskier. I don’t want to be in a situation that some other states are of having to thrown tens of hundreds of thousands of people off the program or drastically curtail benefits to which they’ve become accustomed. So this is a time that calls for more creative thinking to new approaches for different ideas about how we address this fiscal challenge and also keep the program intact.”

(Kinzel) The governor hopes to hear from the federal government about the state’s waiver request by the end of the month.

For Vermont Public Radio, I’m Bob Kinzel in Montpelier.

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