Medicaid rules under fire

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As budget shortfalls continue to hammer states, many governors have begun to explore the possibility of dropping Medicaid patients from state rolls through the use of Medicaid waivers.

The recently passed healthcare law requires that states maintain certain levels of Medicaid eligibility in order to continue receiving federal matching funds. But with Medicaid enrollment still on the rise, many states have said their share of the expense is too great. The National Governors Association and the Republican Governors Association are leaning on Congress to let states downsize their Medicaid rolls.

Industry analysts expect more states to ask for waivers.

“The states are reaching a crisis point fiscally,” Dan Mendelson, CEO of the consulting firm Avalere Health, told the Kaiser Family Foundation. The elderly and disabled account for the majority of Medicaid spending, with a significant portion going to long-term care. Medicaid payments represent nearly half (40%) of all nursing home spending, the Kaiser Family Foundation says.

Rather than allowing states to resort to waivers, Congressional Democrats, including House Minority Leader Nancy Pelosi (D-CA) and Sen. Tom Harkin (D-IA), favor extending increased state Medicaid aid until 2014, when many of the provisions of the new healthcare law take effect.