Budget Cuts to Hike Medicaid Premiums, Co-Pays for Millions

Roughly 13 million people, or about one-fifth of the nation's Medicaid beneficiaries, will face new or increased co-payments and premiums for doctors visits, non-emergency hospital visits and prescription drugs under soon-to-be-enacted budget cuts. Those payments and premiums will be set by individual states.

Nine million of these beneficiaries — about half of them children exempt from such charges under current law — would face cost-sharing burdens for the first time under the $39 billion package of cuts passed by the House on Wednesday and now awaiting President Bush's signature.

The nonpartisan Congressional Budget Office estimates that by 2015, the new charges will drive 65,000 people off of the Medicaid program for the poor, either because they will forego care rather than pay premiums for co-payments or get dropped for failing to pay their share of Medicaid bills.

In fact, about 80 percent of the $9.9 billion in savings will accrue from people dropping out of the program, with only 20 percent coming from the higher cost-sharing requirements, according to CBO.

States also would be able to scale back Medicaid benefits for about 1.6 million beneficiaries who have higher incomes and aren't disabled or pregnant, saving $6.1 billion over 10 years. Services such as eye and dental care and mental health treatments are likely to be affected.

Seniors, meanwhile, will find it more difficult to give away their assets to their children or others to qualify for government subsidized nursing home care.

On Medicare, Congress left beneficiaries pretty much alone rather than provoke the powerful seniors' lobby. However, better-off Medicare patients will face accelerated premium increases for doctor visits, and a provision that saved doctors from fee cuts will have the effect of increasing such Part B premiums — presently at $88.50 a month — for all Medicare beneficiaries by about $2.30 a month in 2007.

It's not all cuts, however.

For example, a program championed by Senate Finance Committee Chairman Charles Grassley, R-Iowa, will expand Medicaid coverage to about 115,000 disabled children in families with incomes up to 300 percent of the poverty line. The cost is $6.4 billion over 10 years.

States also will find it easier to provide home- and community-based services to elderly patients who do not need the level of care provided by nursing homes. That program will cost $2.6 billion over 10 years.