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State Medicaid Directors Face Hard Decisions on Budgets

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State Medicaid Directors Face Hard Decisions on Budgets

September 26, 2011

An increasing number of Medicaid directors are looking at managed care to stretch state Medicaid dollars according to the head of the National Association of Medicaid Directors (NAMD) as states face budget shortfalls matched with federal prohibitions against cutbacks in Medicaid coverage. States are facing aggregate budgets shortfalls of about $175 billion, on top of earlier budgets shortfalls of about $200 billion from the beginning of the recession. Matt Salo, NAMD’s executive director, said much of the $200 billion gap was filled with stimulus dollars, but with that gone there are few options to get through the shortfall.

Cutting options services is one possible source for savings, but it is not where the bulk of the spending is. The easiest way according to Salo to change how health care is delivered and paid for “is with more fully integrated managed care.” These changes come as states face “the largest expansion of Medicaid in the program’s history” from the Patient Protection Affordable Care Act.

Salo did not have many kind words for the “Super Committee”. “It will only make things worse,” he said. Most of the ideas on the table “simply shift costs from the federal government to the states,” which “have no capacity to absorb” the costs. He warns that “decisions will be made at the 12th hour, behind closed doors, and no one will know what happened until it's too late.”