House set to debate Medicaid legislation

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(Host) The House is set to debate legislation later this week that’s designed to reduce the state’s projected eighty-million-dollar deficit in the Medicaid program.

As VPR’s Bob Kinzel reports, the Douglas Administration doesn’t support the plan because the bill doesn’t include enough budget cuts.

(Kinzel) The overall budget for the Medicaid program has increased dramatically in recent years. Health care costs are soaring, utilization is up and prescription drug expenses are rising. All of this is happening at a time when federal reimbursement rates are declining.

The Douglas administration asked lawmakers to adopt a multi pronged approach to deal with this problem. Their proposal cut hospital provider rates by roughly twenty-million- dollars. It reduced reimbursement rates to physicians by 5 million dollars. And it raised premiums for participants of the program. It also fully implemented a chronic care initiative to better manage patients with chronic illnesses.

The House Appropriations Committee determined that many of these cuts were too severe and would be passed along ultimately to consumers in the form of higher insurance rates. Instead, the committee backed smaller cuts and decided to rely more heavily on projected surplus money to reduce the deficit. Vernon Representative, Patty O’Donnell, is a member of the committee.

(O’Donnell) “You know, we had a choice of taking revenue that we knew is going to be there to build a program, or cutting people off, or slashing providers to a point where we’re just going to devastate the whole health care system. You know, we have a job to do. Our constituents rely on us to come here and do the best for them. And if we know the money is going to be there, we have to use it.”

(Kinzel) Administration Secretary, Charlie Smith, is unhappy with the committee’s plan because he says it delays the tough decisions that need to be made if much deeper cuts are to be avoided in the future.

(Smith) “Our saving Medicaid plan was designed to spread the pain around, because clearly there’s pain when you’re trying to balance an eighty-million dollar deficit. We asked the providers to take a share of that. We’ve asked the beneficiaries to take a share of that. We’ve asked the taxpayers to take a share of that. We think it’s a fair sharing that we’ve presented. And we think the tough decisions need to get made now, because it simply won’t get easier in future years.”

(Kinzel) The Administration is also hoping to reduce part of next year’s deficit by implementing a new pilot program that will give the state more flexibility in using federal funds. However, the plan faces an uncertain future. It may be several months before the Bush Administration rules on this waiver and the proposal would then need to be reviewed by the Legislature.

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

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