From Volume 37, Issue 44 of EIR Online, Updated Nov. 19, 2010

U.S. Economic/Financial News

More States May Drop Out of Medicaid Program, Throwing Millions on Scrapheap

Nov. 12 (EIRNS)—It was recently reported that South Carolina is planning to drop its Medicaid program, cutting off nearly a million of its citizens from access to medical care. Now the Nov. 12 New York Times reports that Texas and up to a dozen other states, are also considering dropping out of the Federal Medicaid program.

Nationally, Medicaid covers almost 50 million Americans. Medicaid payments currently assist nearly 60% of all nursing home residents, and about 37% of all childbirths in the United States are covered by Medicaid. The Federal government pays on average 57% of Medicaid expenses.

In Texas, where the Federal government covers 60% of the state's Medicaid budget, Republican legislators and Gov. Rick Perry are talking about shutting down the entire program. But opponents of the shutdown point out that, without that Federal money, any health care the state could provide would be so limited that undercovered patients would flood emergency rooms, and Texans would end up paying the costs through local property taxes or higher insurance premiums. Seven out of ten Texas nursing home residents rely on Medicaid, which also pays for more than half of all deliveries of babies in the state—well above the national average. Moreover, about a million Texans work in health care, and from 2005 to 2009, one-quarter of the new jobs created in the state were in that field.

Some conservatives argue that low-income people could get Federal subsidies to buy private insurance—sort of like Obamacare. But Tom Banning, chief executive of the Texas Academy of Family Physicians, said that without Medicaid, or with a less-extensive replacement program, health-care providers would be forced to shift their costs to the private market, driving up insurance premiums and prompting more people to forgo coverage. "From a practical standpoint," Banning said, "the downstream economic implications for Texas health-care infrastructure would be decimating."

The bottom line: These cuts are intended to do what they will do: reduce "consumption" of health care by killing people.

South Carolina Moving To Cut Health Care For The Poor

Nov. 10 (EIRNS)—Fittingly, the state used by the British Empire to launch war against the United States of America, may be the first to obliterate the Federal/state Medicaid program upon which the elderly, disabled, and poor depend for medical assistance—unless we can relaunch the anathema to global finance, American System economics.

South Carolina has a population of about 4.5 million, of whom, some 100,000 were eligible for Medicaid in 2007, according to the Associated Press. In three years, that number has increased almost ten-fold, to 975,000. As of this coming March 4, according to plans released by state officials yesterday, South Carolina's Medicaid programs will stop paying all doctors—unless plans are approved to cover a $228 million deficit.

The state's Department of Health and Human Services (HHS), however, does have a plan: "Providers will be encouraged to continue seeing Medicaid patients in hopes that they will eventually be paid," the Department said in a plan submitted to the State Budget Office.

On Dec. 14, the state's financial oversight board, chaired by Gov. Mark Sanford, will decide how to deal with the Medicaid deficit in the current fiscal year $1.1 billion budget. Faced with more than 20% of its population dependent on Medicaid, the state has cut more than $500 million from the state HHS over the past several years.

State Senate president pro tem Glenn McConnell says that HHS and the Medicaid program should be disabused of the notion that they can get more money from the state. "This is going to spread like fire on gasoline, if these agencies just think they can parade into the Budget and Control Board and get additional money," McConnell said.

Tea Party-backed Gov.-elect Nikki Haley has thus far refused to comment on the plans to cut nearly a million of her constituents off access to medical care.

Congress Inaction Threatens Cut-Off of Medicare And Medicaid Payments

Nov. 8 (EIRNS)—Without Congressional action, physicians caring for Medicare recipients face a 25% cut in the government reimbursement rate, beginning Dec. 1, because of new guidelines from the Centers for Medicare and Medicaid Services, run by British NICE admirer Anglophile Donald Berwick. Under the new "final rule" for 2011, issued Nov. 2, the "physician fee schedule," which now processes claims with a "conversion factor" of $36.87, would be cut to $28.40 at the end of the month, and then cut again to $25.52 on Jan. 1, 2011.

The American Medical Association held a conference call today, to dramatize the situation. President Cecil Wilson, MD, emphasized that "the threat is real," and that a cut-off threatens to "wreak havoc" within the nation's health-care community, if allowed to proceed. What is happening, is that the Federal government is becoming an "uncertain provider" of health care, something which threatens viability of the entire system. One in five doctors has already been forced to refuse new Medicare patients, because of the lousy reimbursements. "They're putting the lives of seniors at risk," Wilson responded, each time some reporter tried to reduce the issue to monetarist terms.

"This is their responsibility," he said, speaking to Congress, to counter the murderous CMS guidelines. The AMA has run an ad in USA Today, which will also run in Washington, D.C. papers when Congress returns. A poll posted on the AMA website indicates that a phenomenal 94% of Americans are "concerned" about the impending cut-off.

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