Feds Authorize Limited Medicaid Cuts

The Obama administration says cash-strapped states can make some Medicaid cuts, but not deep ones.

The Health and Human Services Department said Friday that states can raise premiums and drop a limited number of low-income adults from the rolls.

The changes stop well short of demands by Republican governors to scale back Medicaid enrollment to help balance their budgets. The new health care overhaul generally requires states to keep current eligibility rules.

The administration now says states can raise premiums to reflect inflation, which might discourage some people from signing up. And states can drop coverage for adults making over $14,484, but not if those beneficiaries are pregnant or disabled. Only a small number of states now provide that coverage.

Advocates for low-income people praised the decision.