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Governor Mead’s Budget Measures Highlight Urgency for Welfare Reforms

At the start of Wyoming’s Joint Appropriations Committee’s interim meeting, Governor Matt Mead announced dramatic spending cuts to Medicaid and other health programs.  But rather than eliminate wasteful initiatives and prioritize effective ones, Mead’s budget cuts punish virtually every program and could potentially hurt vulnerable patients in the process.

“[My] balancing materials summarize what is roughly $248 million of [spending] reductions for the 2017/2018 budget,” said Mead. “You will see that the majority of the reductions come from the Department of Health; $90 million. I do not like these reductions.  You will not like these reductions.”

These cuts come in the wake of Wyoming’s extraordinary decline in mineral revenue.  According to Mead, the state will collect $240-$510 million less in revenue than previously thought in 2017 and 2018.  This is on top of the January CREG report that estimated a $600 million shortfall over that time period.  All told, Wyoming is on course to collect a third less revenue over the next two years than its peak in the 2013/2014 Biennium.

The Department of Health faces a 9.2 percent cut. This includes Mead’s $90 million reduction in General Fund spending as well as a $43 million decline in federal matching dollars; a total cut of $133 million.

Here are a few examples of Mead’s healthcare program cutbacks: 

  • 100 percent cut to Oral Health:  Dental benefits for low-income children.
  • 45.93 percent cut to Rural Health: Supplemental funding for co-pays, transportation, and prescription drugs.
  • 18.69 percent cut to Senior Care: Home and personal care for individuals at risk of premature institutionalization.
  • 30.59 percent cut to Substance Abuse Prevention:  Funding for community level alcohol, tobacco, and drug abuse prevention efforts.
  • 11.34 percent cut to Mental Health and Substance Abuse Treatment: Grants for community outpatient services.
  • 17.35 percent cut to Maternal/Family Services: Block grants for preventive and primary care for low-income mothers and children. 

The list goes on.

In dollar terms, however, these program reductions pale in comparison to Mead’s cuts to Wyoming’s largest healthcare program, Medicaid. This entitlement will lose $54.4 million in general funding and $28.1 million in federal matching dollars, a total cut of $82.5 million.

Mead initially introduces a universal 3.3% “Provide Rate Reductions” across all healthcare providers.  He then further slashes reimbursements through targeted payment cuts on a variety of medical providers: including pharmacies, nursing homes, and mental health clinics.   

 

While providers will certainly suffer financially from Mead’s payment cuts, patients will undoubtedly suffer the most.  Researchers at the Centers for Disease Control find that the less Medicaid pays, the less doctors are willing to treat the program’s patients.  In states where Medicaid pays the least, like New Jersey and California, as many as 60 percent of practicing physician no longer accept Medicaid patients.  This is where Mead’s Medicaid cuts are taking Wyoming.

Up until now, Wyoming’s mineral boom afforded Medicaid the resources to pay providers enough to ensure they treated patients consistently.  Adequately paying doctors is especially crucial in Wyoming given the state’s shortage of doctors. If even one doctor or hospital stopped treating Medicaid patients in medically underserved areas, patients will lose access to many critical services.

These reimbursement cuts will likely force many physicians to turn away the program’s patients.  As the director of the Department of Health, Tom Forslund, explained at a recent Labor and Health Committee hearing:

“The state of Wyoming has the highest [doctor] participation rate for the country.  A significant reason for that is we have paid the providers a fair dollar amount compared to other states across the country.  As we start to reduce the payments, we’ll start to lose clients.”

Mead’s haphazard budget measures reveal an uncomfortable truth: we can no longer afford to pay for our sprawling and duplicative public health programs as they currently exist. Unless our elected representatives take meaningful steps to make our safety net more flexible, targeted, and cost-effective, needy patients will be left to suffer as these cuts take effect. 

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Sunday, 28 May 2017
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