Dan Hawkins is vice president for federal, state and public affairs for the National Association of Community Health Centers.
Even as lawmakers on Capitol Hill debate Medicaid reform, states are carrying out radical changes to their own health care programs. No lengthy political debate is involved. Nor is the public necessarily asked to weigh in. States have at their disposal a powerful weapon to enact Medicaid policy changes with barely a nod from the federal level using what is called a "Section 1115" waiver. These waivers are essentially good policy gone bad. They were originally created to give states the flexibility to try new and innovative projects in health care. That was the intent in 1972 when the statutory authority was originally granted in Section 1115 of the Social Security Act, (hence the name “1115 waivers”). Now waivers are gaining popularity in many states as a back-door method of cutting Medicaid costs by a host of methods, from raising premiums on beneficiaries to closing enrollment—policy changes that require no input from Congress or the public.
That growing numbers of states are using waivers to trim budget costs should serve as a cautionary tale the Medicaid critics who want to cut first and ask questions later. Consider, for example, the state of Tennessee, where recent efforts to overhaul TennCare—Tennessee's Medicaid program—are pushing an estimated 2,000 people a day off the rolls. On August 1, 2005, about 200,000 TennCare beneficiaries lost all prescription coverage, and the coverage of another 97,000 TennCare enrollees who are the sickest may hang in balance in the courts. Two other states—South Carolina and Florida—are eyeing waivers that create Health Savings Accounts that could ultimately price low-income families out of the health care market.
Cutting the safety net strings for thousands of low-income people may produce short-term savings, but the long-term consequences are far-reaching for the entire health care delivery system—and signal serious trouble for America’s community, migrant, and homeless health centers. The federal Health Centers program, which started 40 years ago as part of President Lyndon B. Johnson's "War on Poverty," is already showing signs of financial strain—diminishing grant revenues, slackening public financial support and falling revenues, amidst a surge in the number of poor and uninsured people seeking care at the centers for the first time. Indeed, a new report from the National Association of Community Health Centers, The Safety Net on the Edge , documents that over the past five years, the number of poor and uninsured health center patients has grown three to four times as fast as the nation’s overall poor and uninsured populations.
Health centers are doing everything possible to keep their own costs of care down, even as their new patients are sicker and require more care. In fact, almost half of all health centers ran deficits last year—the reddest of red flags for anyone who cares about the fiscal health of the safety net. In all these respects, health centers serve as a microcosm for the national health care crisis. The growth of America’s poor and uninsured populations and the decline of our bedrock private insurance industry pose serious challenges for the entire health care system—but especially for health centers and other key safety net providers.
Few can argue against the need to rein in Medicaid spending. But at issue here is intent: Putting budget neutrality before public health can trigger incalculable consequences for all. We now know that health spending is rising faster than workers' incomes. If the cost trend continues, health insurance will become unaffordable to more and more people—including the middle class. Already, 12 percent of adults ages 19-64 are underinsured and thus more likely to go without essential care, such as filling prescriptions or visiting a doctor. Congress and those engaged in the current debate about reforming Medicaid must first account for the cuts already in place at a time when Americans are negotiating a marketplace of diminishing health care options. Yes, it costs money to sustain safety net programs like Medicaid and health centers, but any failure to do so carries with it enormous public health consequences. As the auto mechanic warned in a famous ad some years ago, “You can pay me now or pay me later.”
