Medicaid cuts proposed as program grows

ALBANY - As Gov. Andrew M. Cuomo tries to cut nearly $1 billion from Medicaid, he is facing record enrollment in the program, including the highest number of Long Islanders ever, experts and government officials said.

More than 300,000 Nassau and Suffolk residents - one in nine - have health insurance through Medicaid, a 31 percent increase since the recession began in 2008 and more than double the number from 1997, officials said. Statewide, the system has grown more slowly than on Long Island - 63 percent since 1997 - but nearly 5 million people, or one in four New Yorkers, are on Medicaid now.

"It's the highest enrollment level in the program's history," said Michael Birnbaum, who studies the system as director of policy at the Medicaid Institute of the United Hospital Fund, a nonprofit.

Savings, cutting waste

Wednesday, Cuomo is expected to present a new budget outlining $2.3 billion in state savings from Medicaid, capping state spending growth at 4 percent a year, moving nearly all patients into managed care and cutting payments to caregivers. There are no plans to reduce eligibility, which experts say has grown more in New York than in any other part of the country, and instead the budget would force hospitals to find savings while the state trims programs and reduces "waste."

Cuomo said last week the plan would "not only just reduce the cost but actually serve people better."

But it will involve big changes for the state's poorest people. Nassau Health Care Corp. officials are talking about selling its nursing home. Advocates for the mentally ill are concerned managed care will mean fewer services. And the elderly and disabled may lose some home health care benefits. "What it comes down to is this: They're talking about a lot of small changes, but the implications are huge overall," said Gwen O'Shea, president of the Health and Welfare Council of Long Island, a nonprofit advocacy group.

Changes lead to growth

Medicaid grew so quickly in the past 15 years because of major expansions that brought low-income working people into the system, said Deborah Bachrach, the Medicaid director under former Govs. Eliot Spitzer and David A. Paterson. In 2002, New York expanded Medicaid to insure childless adults - one of five states to do so. In 2008, the Child Health Plus program, a federally matched state insurance program, was expanded to allow in families of three making $68,000, up from $43,000 before.

On Long Island, those two programs, Family Health Plus and Child Health Plus, account for nearly one-third of the population with government health care, but only 16 percent statewide. State officials said Long Island's high cost of living drove enrollment higher in those programs.

"Nassau and Suffolk might be ideal for CHP [Child Health Plus] because two working parents could make $80,000, and yet have no health insurance for their kids," said Claudia Hutton, a spokeswoman for the state.

The program's growth in the past two years was mostly due to the recession, officials said.

The down economy posed a classic dilemma: just as tax revenue falls, people without jobs enroll in government programs. In Cuomo's budget, total Medicaid spending - including state, federal and county funding - is $52.8 billion even after savings and cuts, more than California's $42 billion, which pays for twice as many people.

Nassau and Suffolk's share of Medicaid costs was about $235 million each in 2010, an amount that can't grow more than 3 percent in next year's budget under state law.

While California and other states have proposed cutting people from the system to close budget gaps, Cuomo isn't. The rolls will likely grow to comply with the national health care overhaul because the state must try to insure 1 million more people - including 100,000 on Long Island - who are not on Medicaid but eligible.

"We're not turning people away," said Michael Dowling, the North Shore-Long Island Jewish Health System executive who co-chaired the panel that wrote Cuomo's Medicaid savings plan. "Many other states took the other way out. They said, 'We're cutting benefits, we're cutting eligibility.' But we're not doing that."

Treating chronic users

Instead, New York is counting on big savings from capping malpractice damages and hoping that managed-care groups can cut spiraling costs for home health care. And it is trying to find savings among the 15 percent of Medicaid patients who use 50 percent of its resources - so-called chronic users who tend to be mentally ill, substance abusers and disabled.

These patients were left out when Medicaid moved to managed care about a decade ago. Their treatment is decided by clinicians, not insurance firms.

Cuomo's plan would reduce costs by having their treatment approved by "behavioral health organizations," similar to health maintenance organizations but with a specialty in mental illness and other chronic conditions. It would save $5 million this year and up to $60 million by 2013.

The proposals could mean changes for Leonard Spence 27, of East Meadow, who was diagnosed with schizoaffective disorder in 2007, lost his job and now participates in day programs four days a week to learn job and communications skills.

"It gives me structure," Spence said. "Something to do in the daytime instead of sleeping all day or listening to music . . . or not doing anything productive."

Spence recently traveled to the Capitol to urge his senator, Kemp Hannon (R-Garden City), to vote against any measure that would prevent him from using day programs. Hannon said one of Spence's programs at the Mental Health Association in Hempstead is a "model."

John Javis, director of special projects at the Mental Health Association, said he was relieved that regular managed-care agencies wouldn't be in charge. Still he's concerned. "There could be unintended consequences down the road."