Obama's Medicaid Cuts Add Cost in Kansas

As the recession continues to cut into state budgets, many states, my home state of Kansas -- which is looking at a $510 million budget shortfall next year -- included, are looking for ways to trim the fat.

Unfortunately, the method many are choosing is to cut "optional" programs like the Medicaid waiver.

In January of this year Kansas Governor Mark Parkinson slashed funding for the Medicaid program by 10 percent across the board.

The problem is, Parkinson isn't thinking very clearly in the places he makes his cuts.

The cut to the Medicaid funding would save the state $22 million -- so far, so good, right?

Wrong.

Federal law mandates funding for people who qualify for Medicaid and need to go into a nursing home or other institution. You cannot cut that funding.

What the waiver does is allow Medicaid funding to be used to cover non-hospital expenses, such as in-home care for people with physical disabilities. That program, by federal law, is optional: states are not required to fund those services, and so of course they were on the chopping block. The dirty little secret here is that by cutting that funding, they left $55 million in federal funding on the table.

The even dirtier little secret is it costs about $3,800 per month to keep someone in a nursing home, on average. It costs around $1,800 per month on average to keep someone at home.

Worse, the requirements for the waiver are identical to those for putting someone in a nursing home -- so it's not even good math to cut this funding.

Just getting half the 1,800 or so people who were admitted to nursing homes just since December 2009 back into their homes would save the state a little over $20 million a year. Which is a big chunk of the $22 million they cut. This leaves aside the fact that keeping people in their homes and communities is not only cheaper, but is better for the people on the waiver and for their communities.

These people are often able  to stay in their jobs or otherwise contribute to the community, the organizations who help the disabled employ people to help care for them, and the state saves money on their care -- everyone wins.

The Kansas legislature at least recognized Parkinson's cuts were perhaps less than bright. The legislature is proposing to shift funds from the general fund monies normally allocated to services for the disabled to cover the waiver costs. However, this still leaves these agencies with major budget shortfalls and hard choices to make. One Kansas agency has lost 30 jobs and cut administrative salaries by 10 percent across the board.

More money out of the economy at a time when we need more, not less.

In the meantime, according to Greg Jones of Southeast Kansas Independent Living Inc., 65 people in the state of Kansas have died while waiting for the sorts of services the waiver provides.

Kansas is far from the only state facing these woes. According to the Western New York Law Center, multiple states are either cutting the waiver program entirely or limiting Medicaid benefits in other ways. Even a cursory Google search brought up news story after news story of states cutting the waiver program in an attempt to save money.

I grant that in economic times like these everyone is having to make cuts, but these are stupid.

The solution to the problem is really quite simple -- and therefore apparently beyond the capability of Secretary of Health and Human Services Kathleen Sebilius to understand. Simply require in-home services to be reimbursed in the same way as nursing home services.

We now have the so-called Patient Protection and Affordable Care Act. If the goal of that "reform" was really to save costs and make sure people were covered, this would have been a simple way to do so.

The real problem here is cookie-cutter solutions imposed from the outside forcing states to make tough choices which cause the most vulnerable citizens to fall through the cracks.

The real solution is to give states the freedom to solve their own problems, not mandate solutions from the outside.  Too often, those simply make the problems worse.

In the meantime, people continue to die waiting for help, or stack up in nursing homes they are unlikely ever to leave. If all of the people waiting for in-home services were to go into a nursing home tomorrow it would overwhelm the system -- there are simply not enough beds for them.

A little common sense in where money is spent and where the budget is cut would go a long way to solving budget crises nationwide.

Unfortunately, common sense is anything but common.