Mississippi not only state facing Medicaid woes

Editor's Note: This is the second story of a two-part article on Medicaid. The first story was published Sunday.

Daily Journal Jackson Bureau

JACKSON – If misery does indeed love company, Mississippians concerned about the Magnolia state's budget woes can take some solace in knowing that most other states are facing the same problems.

And the bulk of those problems, many national analysts say, can be blamed on Medicaid spending that is skyrocketing at a time when states are facing a slowdown in tax collections caused by the national economy.

“Medicaid has reached the breaking point,'' Raymond Scheppach, executive director of the National Governor's Association, said in a 2002 report. “The growth rate is simply unsustainable.''

The problems have only gotten worse since 2002. Haley Barbour, a Republican candidate for governor, blames Democratic Gov. Ronnie Musgrove for the woes in Mississippi. Medicaid, which provides health care to the disabled, elderly and poor children, has become a campaign issue.

Because of the current budget shortfalls Mississippi, like 48 other states, has enacted various cost containment measures to try to curb the growth in Medicaid, according to a January report from the Kaiser Commission. According to the NGA, Medicaid spending grew at a 13.1 percent rate in fiscal year 2002, the fastest rate of growth since 1992.

Mississippi has reduced the number of prescriptions that Medicaid recipients can receive, reduced the frequency of new eye glass prescriptions, reduced the reimbursement to health care providers, required Medicaid recipients to make co-payments in some instances, and has initiated a host of other cost containment measures to reduce the deficit for the current fiscal year from $120 million to $53 million.

Still, the state has not taken the drastic steps that have been put in place in some other states.

For instance, according to the Kaiser report, North Carolina froze enrollment in its Children's Health Insurance Program in 2001 because of budget woes.

“For most states there aren't any easy solutions left, but cutting Medicaid means putting at risk the health and long-term care coverage of some of our poorest and sickest Americans – low income children and the elderly and disabled,'' said Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured.

Rep. Steve Holland, D-Plantersville, said cutting Medicaid also has a negative impact on the state's economy. A report by the health care consumer advocacy group Families USA backs up Holland's claim. The report said Mississippi would lose 72 jobs for each $1 million cut in Medicaid.

“Medicaid is bigger for the Mississippi economy than a Nissan plant,'' Holland said.

Tupelo-based North Mississippi Medical Center receives $44 million annually in Medicaid payments for the services the hospital provides, Holland said.

“Many small, rural hospitals could not survive without Medicaid,'' he said.

According to information compiled by the Division of Medicaid, the $2.9 billion Medicaid program supported 85,200 indirect or direct jobs during fiscal year 2002. Each $1 spent on Medicaid generated $3.26 in personal income in Mississippi, according to the Medicaid research.

State money spent on Medicaid
FY Amount

1998 $214.8 million
1999 $204.4 million
2000 $205.3 million
2001 $265.3 million
2002 $377.8 million
2003 $417.8 million
2004 $304.6 million*
* A deficit of $90 million is projected.
Source: Division of Medicaid

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