Over the past year, the Medicaid safety net has been fraying because of a series of federal regulations whose purpose is to reduce federal Medicaid spending by $15 billion over the next five years. As a consequence, important services for both adults and children are in jeopardy. Children with special needs would be especially affected. The regulations would, for example, eliminate therapeutic foster care. Through this valuable program, children with severe emotional problems are placed in private homes with specially trained foster parents. Judith Solomon, a senior fellow at the nonprofit and officially nonpartisan Center on Budget and Policy Priorities, has pointed out that therapeutic foster care has proven its worth in keeping youngsters with disorders out of psychiatric hospitalsan option that would involve far greater cost and would also jeopardize a childs chances for later being able to reside in the community. Ms. Solomon noted that the U.S. surgeon general, in a 1999 report, cited this type of now-threatened program as an example of a best practice.
Other regulations would remove Medicaid coverage for day habilitation. This type of program makes it possible for people with developmental disabilities, like retardation, to live in community-based settings rather than institutions. In the former they receive the kind of personalized assistance that maximizes their potential. Cuts in case management funds represent yet another area that the regulations would adversely affectreducing the amount of time case managers can spend assisting people in need of housing and specialized services in preparation for semi-independent living in the community. The current policy allows 180 days for a caseworker to make the necessary arrangements, but under the new rules, the time frame would be reduced to 60 days. By limiting the amount of time caseworkers can work with the individual, Ms. Solomon noted, the outcome may be less successful. A similar rule would deny federal reimbursement for case management carried out by child welfare workers acting on behalf of children in foster care.
Further shortsightedness can be seen in the elimination of federal matching funds for programs aimed at parents who may be unaware of benefits for which their children could be eligible. The regulations would mandate that funds for these purposes be restricted if the assistance would be provided by school personnel. And yet the U.S. Department of Health and Human Services has itself pointed out that school settings offer the best link for enrolling low-income youngsters in coverage for which they are eligible.
Another area affected would be Medicaid funds to cover some of the costs of graduate medical education for physicians, interns and residents in public hospitals. The administration claims that such uses lie outside the scope of Medicaids purpose. In fact, payments for medical education have been authorized since the very inception of Medicaid, with both Democratic and Republican administrations supportive of this use of funds.
Not only health care advocates, but also the nations governors of both parties deplored the proposed regulations at their February meeting in Washington, D.C. They predicted that shifting billions in costs to the states could force many states to cut back services to some of their poorest residents, thereby leaving still more low-income women, men and children without needed medical insurance at a time when a recession seems all but inevitable. Congress has at least imposed a moratorium on the implementation of some of the regulations until late spring. Instead of moratoriums, the better action would be to eliminate these regulations entirely. Ironically, they come at a time when the president is trying to make permanent his tax cuts for the richest Americansa sad contrast between what the poor and the rich can expect from the present administration, expecially as an ill-advised war continues to cost the nation an estimated $10 billion a month. Congress should act while there is still time.
