Concerns raised about elimination of federal standards that protect the poor against unaffordable premiums

A group of thirty-eight Oregon organizations representing a range of providers and consumer groups who have first hand knowledge of the important role that Medicaid plays in meeting the health needs of tens of thousands of Oregonians called on Senators Gordon Smith and Ron Wyden to protect Oregon’s children, seniors, and disabled adults as Congress considers making deep cuts to the program.

Medicaid is the primary source of life-saving health services for over 385,000 children, poor elderly and disabled individuals in Oregon. Nationally, the Medicaid program is slated for billions of dollars in cuts under a budget agreement reached earlier this year. Both Smith and Wyden are on the powerful Senate Finance Committee, which is facing the prospect of cutting $10 billion in health care spending, including from Medicaid, over five years. Senator Smith led the effort to reduce the amount of cuts assigned to the Finance Committee in the budget bill in April.

On Monday, July 11, the group sent letters to Smith and Wyden asking that they protect the “structural integrity” of the Medicaid program. The group, representing the full spectrum of the provider and client community, set forth seven “indispensable components” of any future policies regarding the Medicaid program, including maintaining clear federal standards that ensure that Medicaid coverage remains affordable and accessible for the low-income population Medicaid serves. In addition, the group urged the senators to look for savings in programs other than Medicaid and offered suggestions on how to find savings and efficiencies in the Medicaid system without harming the beneficiaries.

“These components are central to the program’s ability to provide critical health care services to thousands of needy Oregonians and must not be eroded,” said Janet Bauer of the Oregon Center for Public Policy.

Proposals to increase costs for health coverage under Medicaid for the people who rely on the program were highlighted by the group. Examples of cost-sharing include monthly premiums paid by beneficiaries, and co-pays for services and prescription drugs. Oregon’s experiment with cost-sharing – the expanded use of premiums far in excess of current federal standards and allowed by a waiver to federal rules granted by the Administration – resulted in catastrophic loss of health coverage for nearly half of the people added to Medicaid by the Oregon Health Plan. The fact that Members of Congress are considering a proposal made by the National Governors’ Association to effectively eliminate federal cost-sharing standards motivated the Oregon group to sound an alarm.

“Oregon’s decision to ask the poorest of the poor to pay premiums and co-pays was deeply flawed. People with chronic and emergent health conditions who could not pay their premiums lost coverage altogether and became sicker. Their only option was the emergency room – the highest-priced method of health care delivery. This shifted costs from federal sources to state taxpayers and produced no remedy for rising Medicaid expenditures,” said Ellen Pinney of the Oregon Health Action Campaign. “Oregon’s experience clearly demonstrates that increasing cost sharing on vulnerable low-income people is a penny-wise, pound foolish approach.”

This month, Congress is developing policies that will achieve program cuts as required by the 2006 federal budget, approved earlier this year.

The group gave the senators options for finding some savings without harming the people that Medicaid is designed to help. “There appear to be ways to achieve some level of savings that do not hurt the people who count on Medicaid for their health care needs. Revising the way in which prescription drugs are purchased is a key strategy that would benefit both federal and state budgets,” said Ed Patterson of the Oregon Rural Health Association. Other recommendations included competitive bidding on durable medical equipment, home-based care as an option to institutionalized long-term care, and emphasis on disease prevention.

With more than one out of three births paid for by Medicaid, Medicaid is both an economic force and an important part of Oregon’s safety net. “Medicaid has made it possible for thousands of patients to access the clinics where I work, for everything from dental care and immunizations to prenatal care and obstetrical deliveries, plus detection and treatment of diabetes, cancer, heart disease, asthma and depression,” said Dr. Tina Castanares, member of the Oregon Primary Care Association. “If Medicaid is weakened, the safety net health system in Oregon — which is already challenged — will completely fall apart,” she added.

Medicaid will remain a focus of Congressional discussion this summer as the key Congressional committees that oversee Medicaid work to develop legislation to meet a September deadline for the budget reconciliation bill.