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GOP Renews Attack Against Medicaid;
Pending Medicaid Bills Threaten Health Care Safety Net

June 4, 1996

For Immediate Release

Washington, D.C. -- As early as next week, a congressional committee in the U.S. House of Representatives may move to approve legislation dismantling the Medicaid program and thus jeopardizing health care access for more than 36 million poor and medically needy Americans. At a press conference held this morning at the National Press Club, AIDS Action Council and more than 50 other Medicaid advocacy groups denounced the GOP's Medicaid Restructuring Act of 1996 as the Republican congressional leadership's latest attempt to shred the health care safety net that Medicaid represents to millions of women and children, senior citizens, people with disabilities, and more than half of all Americans living with HIV/AIDS.

AIDS Action Council, the only national organization devoted solely to shaping federal AIDS policy, has long opposed the GOP congressional leadership's campaign to slash vital federal Medicaid funding, cede control over this vital health care program to state governments, and eliminate the 30-year-old individual guarantee to basic health care under Medicaid. The Medicaid Restructuring Act of 1996 (H.R. 3507 in the House and S. 1795 in the Senate) does all three. The bills slash $72 billion in federal Medicaid funding over the next six years. In the name of increased "state flexibility," the bills call for ceding control over this program to the states in the form of virtually unregulated block grants (Medigrants). And, most dangerous, the bills surrender to states the authority to make critical decisions regarding Medicaid eligibility, health care benefits packages, affordability, quality of care standards, and accountability.

"No matter what veneer the Republican leadership uses to try to hide their true intentions and the true nature of their Medicaid restructuring proposals, it has become clear to Medicaid advocates, and some of the nation's governors, that these proposals demonstrate reckless disregard for the health care needs of millions of Americans," said Christine Lubinski, AIDS Action Council's deputy executive director.

While Medicaid advocates are concerned about the proposed $72 billion cut in federal Medicaid funding over the next six years, they warn that provisions in the Medicaid restructuring bill could place the total loss in federal and state Medicaid funding at well over $250 billion over six years. Under current law, Medicaid is jointly funded by the federal government and state governments. Federal guidelines place requirements on states for coverage of specific groups of people and benefits. States that meet these guidelines receive federal matching payments based on the state's per capita income. The federal share ranges from 50 to 80 percent of Medicaid costs. The new GOP Medicaid restructuring proposal changes Medicaid funding mechanisms in ways that provide disincentives for states to contribute adequate levels of state matching funds. Aside from capping federal Medicaid funding at levels below current federal Medicaid spending levels, the GOP bills drastically reduce state matching requirements so that the amount the states need to contribute in order to receive the maximum federal funding would be considerably less than what is required under current law.

AIDS Action Council has identified at least five other key areas of concern in the Medicaid restructuring bills that affect people living with HIV/AIDS:

  • Eligibility. The bill repeals the individual guarantee to basic health care and long term services to which women and children, disabled persons and senior citizens eligible for Medicaid are now entitled. Of particular concern to individuals living with HIV/AIDS and other disabled persons, is a provision in the bill which offers states the option of developing their own, potentially more restrictive, definitions for determining disability eligibility under the Medicaid program. Therefore, states could actually deny coverage for people with HIV/AIDS or limit that coverage to the end stages of the disease. Additionally, because of cutbacks in federal and state Medicaid spending, there will be financial incentives for states to reduce or eliminate coverage for "optional" populations, like those whose medical expenses are so high that they are impoverishing themselves -- the "medically needy."

  • Benefits. States would have the discretion to limit or deny benefits solely on the basis of diagnosis or illness and could set arbitrary limits on physicians visits, hospital stays or prescription drugs, without regard to what is medically necessary or appropriate to treat the condition. States could offer different benefits to different categories of Medicaid beneficiaries, based on cost on not on medical need; and could offer different benefit packages to Medicaid recipients living in different parts of the state. For example, states could provide certain benefits, such as prescription drugs, to women and children and deny prescription drug coverage to disabled people, including people with HIV/AIDS and senior citizens, because they are likely to make the highest use of such a benefit.

  • Affordability. The proposal eliminates federal protections that ensure that cost-sharing by patients will not pose a barrier to accessing health care for Medicaid beneficiaries. States could require premiums and copayments for Medicaid services. Health care providers would also be allowed to require Medicaid patients to pay the difference between the Medicaid reimbursement rate and their higher fees -- a practice known as balance billing -- which is illegal under current law. Individuals who need many health care services, such as people living with HIV/AIDS, could find themselves forced to choose between doctor visits, laboratory tests and prescription drugs, at great cost to their overall health.

  • Quality. States would be allowed to force Medicaid beneficiaries into managed care plans without federal oversight to ensure that quality protections are in place. The current law requiring "reasonable and adequate rates" would be eliminated, allowing states to cut payments to health service providers. With lower payments and less oversight, quality of care will be jeopardized. Individuals with multiple and complex health care needs, such as people with HIV/AIDS and other disabilities would be especially vulnerable to a deterioration in the quality of the health care they receive.

  • Accountability. Mechanisms now in place that allow consumers and providers to hold states accountable for complying with the Medicaid law in federal court would be eliminated. Under the proposed legislation, health care providers have no recourse to the courts and the cause of action for health care consumers is extremely limited. States would be required to set up an administrative procedure for individuals alleging a denial of benefits under the state plan followed by judicial review in state court. If these avenues fail, health care consumers could bring a petition before the U.S. Supreme Court or request the Secretary of Health and Human Services to bring action in federal court on their behalf. Obviously, these cumbersome, bureaucratic mechanisms offer little promise of relief to low-income, seriously ill Medicaid beneficiaries, including people living with HIV/AIDS, who have been denied benefits or have other grievances about the quality of health care they are receiving under state Medicaid programs.

    "AIDS Action urges President Clinton and members of Congress to reject the reckless proposal now under consideration in the House of Representatives. The President of the United States and Congress have a responsibility to maintain the health care safety net, a responsibility they cannot and must not abdicate to the states by irresponsibly block granting Medicaid," Lubinski said. "The plan now on the negotiating table is a prescription for disaster for which there can be no antidote."

For more information, contact
José Zuniga
AIDS Action Council
1875 Connecticut Avenue NW #700
Washington DC 20009
202- 986-1300, Ext. 3042
Pager (800) 734-9583
202-986-1345 (fax)
202-332-9614 (tty)

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This article was provided by AIDS Action Council.
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