Medicaid cuts could lead to higher taxes, insurance premiums

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State lawmakers have proposed reducing entitlement, but health care experts warn maneuver could backfire.

Even if you don’t rely on Medicaid, Texas lawmakers’ proposed cuts in the health care program could cost you money.

Cutting Medicaid could have outcomes beyond fewer services for the poor, several local officials in the health care industry said.

Notably, taxpayers in Central Texas could end up with increased local taxes and higher insurance premiums, according to several Central Texas health care professionals.

Tom Banning, the CEO for the Texas Academy of Family Physicians, said the proposed cuts don’t equate to savings. Rather, there is simply a shuffling of expenses.

“This has the potential to be the biggest cost shift to local governments that Texas has ever seen,” Banning said.

The two largest hospital groups in Austin echoed those concerns.

Jesus Garza, an executive vice president and the chief operating officer at the Seton Family of Hospitals , said the money would have to be found elsewhere when cuts in the state and federally funded Medicaid program result in undue strains on hospital systems.

“It drives up the cost of care,” Garza said.

Mark Clayton, a senior vice president at St. David’s HealthCare , said cuts in Medicaid would end up being absorbed, in part, by insured people and taxpayers.

Medicaid — along with other publicly funded programs, including the education and prison systems — will be cut as the Republican-led Legislature tries to make good on its promise to tame the unwieldy budget and a shortfall of up to $27 billion without raising taxes.

Reducing money to Medicaid — as outlined in early versions of the state Senate and House budget proposals — comes at a time when the Medicaid rolls are expected to grow by 16 million people nationally as the federal health care overhaul gets into full swing by 2014.

Earlier this month, state lawmakers proposed slashing the spending on Medicaid and the Children’s Health Insurance Program, the entitlement programs that serve 3.4 million of the poorest, sickest and youngest Texans.

Many of the cuts are expected to come largely through a reduction in reimbursement rates to doctors, hospitals and other health care providers.

But the total effect, which would include the loss of federal matching funds, would be about $14 billion.

The worry is that the cuts will lead to fewer doctors taking patients with Medicaid because the reimbursement rate is too low, meaning health care professionals get paid less than they would if the patients were on Medicare or had private insurance.

The doctors will be forced to limit or stop taking Medicaid patients, health professionals said. With more patients coming in and fewer doctors expected to take Medicaid, more pressure would be put on local health clinics.

Though the clinics might be able to pick up some of the slack, they certainly cannot handle all of it, said José E. Camacho, the executive director of the Texas Association of Community Health Centers.

“I fear that we do not have the full capacity to take on anyone who walks through the door,” Camacho said.

And even if patients can get in, they should expect longer waits, he said.

Christie Garbe, a spokeswoman for Central Health , the Travis County health care district, added that reductions in Medicaid could put increased pressure on the publicly supported safety net, which includes dozens of community health centers and clinics that serve Travis residents.

Central Health, which is funded by local property taxes, could be forced to raise taxes to pay for any increase in traffic at area clinics, warned the Texas Hospital Association.

Garbe couldn’t say if tax increases are imminent, but she said Central Health would feel the strain on the system.

“There will be additional pressure to find resources” on a system that is already “stretched thin,” she said.

Garbe and others agreed on what would happen next: If people cannot get into community health centers, they’ll turn to emergency rooms — the most expensive way to treat sick and injured people.

“What we would see is the exact reverse of what we’re trying to do, and that’s cut costs,” Camacho said.

But the pressure on clinics and emergency rooms is only part of the potential problem, he said.

Central Health can raise taxes, but hospital administrators said their systems would have to turn somewhere else to make up for the jump in uncompensated care costs.

SOURCE

Texas Health Insurance

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