Cash-Strapped States Slashing Medicaid Benefits, Eligibility

State tax revenues are falling more sharply than they have at any time in the past decade. Since Medicaid is usually one of the largest items in a state budget, state legislators and governors have been cutting back on the program in ways that will affect the benefits of millions of beneficiaries.

To reduce Medicaid costs, most states are increasing controls on prescription drugs, cutting payments to providers, or both. For example, six states are limiting the number of prescriptions to be filled per month, regardless of medical need.

Some states are also increasing cost-sharing, eliminating optional benefits and tightening up Medicaid eligibility. For example, Washington state reduced its Supplemental Security Income program, which will cause certain elderly and disabled beneficiaries to lose their Medicaid eligibility as well as state SSI benefits. Montana has substantially increased the amount that adult, elderly, and disabled Medicaid beneficiaries must pay when they use medical care services. By fiscal year 2003, 18 states will reduce eligibility for Medicaid.

State officials are also scaling back on what federal law says are "optional" services'”things like vision services and dental care. As of July 1, Florida eliminated all non-emergency adult dental care. The state will no longer pay for adult dentures or routine teeth cleanings. Iowa reduced dental services for adult Medicaid beneficiaries, paring down its comprehensive dental package to a set of basic preventive services.

For more on the state cuts in the Medicaid program, see: