For example, facing a $1.2 billion deficit, the Nevada Legislature reduced Medicaid provider rates by 6 percent this summer, while Colorado implemented a 1 percent cut to Medicaid community providers, increased co-pays for some Medicaid-covered services and delayed a new benefit for people with substance use disorder. The cuts come as the need for health care services has surged: Families USA estimates that more than 4.3 million people have been added to the Medicaid rolls since February, with state-level increases ranging from 0.8 percent in Montana to 17.2 percent in Kentucky.
The current FMAP bump “was a huge help, but it didn’t cover the loss of revenue that the state was expecting,” said John Bartholomew, the Colorado Department of Health Care Policy and Financing’s chief financial officer.
While the Wyoming Medicaid program hasn’t increased co-pays, it cut reimbursement rates for most providers by 2.5 percent and several programs are being scrapped, including chiropractic services, an initiative to manage the health of high-risk patients and a case management program designed to keep people out of nursing homes. The governor’s office had directed the agency to reduce its budget by at least 9 percent, and the state “may have to pursue additional reductions,” said Teri Green, who heads the Wyoming Medicaid office.
States generally see more savings from reducing Medicaid provider rates than from cutting benefits, said Matt Salo, executive director of the National Association of Medicaid Directors. And as a condition of the 6.2 percentage point federal matching rate increase, states can’t purge people from their Medicaid rolls even if they become ineligible for the program, contributing to a “really difficult dynamic,” Salo said.
Other states have iced plans to expand Medicaid-covered services. In Virginia, which has added some 136,600 new enrollees since March, the state rolled back a planned dental benefit for adults and an initiative to coordinate the care of incarcerated people before they’re released, as well as scrapped plans to increase the maximum income threshold for postpartum coverage to new mothers.
State Medicaid programs could be squeezed further in the near future, given the 6.2 percentage point FMAP increase will last through the quarter in which the national public health emergency ends. The declaration has been extended twice already, most recently through Oct. 23, meaning the increased federal dollars, totaling an estimated $35.8 billion, are currently set to expire at the end of 2020. And because state budget cycles start months to two years in advance, Medicaid offices are weighing changes to their programs “long beyond the three-month cycle that we seem to be in,” said Benjamin Shaffer, Rhode Island’s Medicaid director.