US Debt-ceiling to Halt Payments to Kids’ Health Providers

by Lakshmi Gopal on  August 12, 2011 at 7:35 PM Health Insurance News   - G J E 4
Health providers' payments for Medicaid and Children's Health Insurance Program (CHIP) may be at risk, now that the health care scenario has taken a turn for the worse.
 US Debt-ceiling to Halt Payments to Kids’ Health Providers
US Debt-ceiling to Halt Payments to Kids’ Health Providers

Medicaid and Children's Health Insurance Program (CHIP) were earlier said to be sacrosanct during the original debt-ceiling deal.

But some political observers say that Standard and Poor's recent downgrade of US debt adds fear and strain to the uncertainty about the future of these programs.

Medicaid and CHIP, which were intended to be off the table during the negotiations, will now be brought into play.

The super committee to be set will have 12 Congressmen - representatives from all political hues. It has been given the responsibility of recommending as much as $1.5 trillion in federal budget cuts over the next 10 years.

"They're talking about trillions—with a 't'—in cuts," said Matt Salo, Executive Director of the National Association of Medicaid Directors. "And when you're talking about trillions in cuts, almost everything has to be on the table."

In some ways, a non-decision by the committee could be the best scenario for the 2 programs. If the committee can't agree, a trigger in the current law automatically guarantees the savings through cuts in defense and other federal spending, including a 2 per cent reduction in Medicare payments beginning in 2013. That trigger would not affect Medicaid funding.

The federal struggle is only half the picture. States also have shrinking tax revenues with which to contend. That means many states are looking for ways to alter their Medicaid programs to make them more manageable: If revenues don't grow, then Medicaid programs could be slashed by the states.

An effort to shift more of the financial burden from the federal government to the states has been opposed in many quarters, including in California, which was seeking to implement a 10 per cent cut in reimbursements to Medicaid providers.

Source: Medindia

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