http://www.oaklandtribune.com/Stories/0,1413,82~1865~1159371,00.html

Medicaid reforms could be devastating to California

Hospitals fearful of state options to create their own programs
By Lisa Friedman


and Suzanne Bohan STAFF WRITERS WASHINGTON -- California's hospitals
could face "devastating" impacts from President Bush's plan to reform
Medicaid, state and Bay Area officials said Tuesday. 

Specifically, advocates said they worry that a $1.8 billion program
within Medicaid that helps hospitals make up the cost of treating the
poor and uninsured could take a massive hit if states decide to take the
White House up on its offer of a fixed amount of federal cash. 

Last year, California health care facilities like Children's Hospital
Oakland and others that serve large numbers of uninsured patients,
received about $900 million from that program. 

State officials said hospitals need every dime they can get with an
estimated 6.3 million uninsured children and adults and another 6 million
enrolled in the state's Medicaid program -- called MediCal -- which often
does not cover the full costs of hospital care.  

"That is of grave concern to us, because those are the safety net
hospitals. When you don't have insurance, those are the hospitals you go
to," said Jan Emerson, spokeswoman for the California Health Care
Association. 

Under Bush's plan, "That money could end up in a whole lot of other
places," she said. 

Low-income patients in California already are feeling the pinch of an
estimated $35 billion budget shortfall with Gov. Gray Davis proposing to
roll back benefits, forcing a potential 200,000 people out of MediCal. 

Under President Bush's plan for overhauling Medicaid, states could choose
to stay with the status quo and receive federal reimbursement for each
patient based on a per capita income funding formula. 

Or, they could opt into the new version of Medicaid and receive a greater
portion of the $3.25 billion extra the administration plans to add next
year. 

States would then receive a fixed sum of money to design an insurance
program however they like -- be it adding, reducing or even eliminating
benefits for low-income, elderly and disabled residents. 

The federal government would increase its Medicaid contribution under the
new plan by $12.7 billion over seven years, but after that states would
receive less money. 

"If I were still a governor, I would absolutely jump at an option like
this," said Health and Human Services Secretary Tommy Thompson, the
former governor of Wisconsin. 

"The old Medicaid rules are a straitjacket, restraining creative new
approaches that could preserve coverage and expand it to more Americans
in need," he said. 

But state and local officials said they fear that if states will chose
the immediate extra money behind door number one, Medicaid and the
disproportionate share hospital program will suffer down the road. 

"My fear is that this proposal would involve cuts to disproportionate
share funds," said Mary Dean, senior vice president of Children's
Hospital Oakland. "And any cuts that come to disproportionate share
hospitals are devastating." 

Bush's proposal made her "very uneasy" Dean said. 

Emerson also said the changes could have "a devastating impact on
disproportionate share hospitals." 

Rep. Pete Stark, D-Fremont, had even harsher words. 

He called Bush's plan "pernicious" and said ultimately poor patients and
the hospitals that serve them will have to compete with roads, schools,
prisons and everyone else who wants a piece of the California budget,
since unused money from federal block grants could be funneled into a
state's general fund. 

Dean was hoping for the best but cautious about Bush's plan. "How is this
going to help us provide care, badly needed care, for children?" she
said. "My hope is that I'm missing something and that there is some good
news. But my fear is it will not be good for children."


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