Editorial: Out of touch (Rutland Herald)

On Monday President Bush unveiled his budget for the coming fiscal year. At the same time, health care professionals in Vermont were wondering if Vermont's health care system was at a tipping point, unable to provide adequate care as a result of inadequate funding from Washington. Vermont's own health care program, Catamount Health, may be in jeopardy as a result.

Bush's budget is an outline of his priorities, and as a snapshot of the place where Bush has taken us, it presents a discouraging picture.

The budget total is $3.1 trillion, and that total does not take into account continued spending on the Iraq war. The budget projects a deficit of $410 billion, which has been driven up by the proposed economic stimulus plan and the staggering economy.

Among the savings proposed in the budget is $178 billion from restraining Medicare and $17 billion from restraining Medicaid. And yet Medicaid is already underfunded, and Vermont's hospitals have had to absorb $90 million in annual losses as a result. Hospital officials say that Medicaid provides only 50 percent of the cost of hospital care. Meanwhile, Medicaid reimbursements for physicians fell by 11.9 percent between 2004 and 2006.

The underfunding of Medicaid and Medicare means that hospitals must make up for the money they are not receiving by shifting the cost to the premiums of those with insurance. This cost shift is one of the reasons that health insurance premiums have been increasing by double digits each year. Higher premiums are a hidden tax paid by those with health insurance to make up for the lack of Medicaid payments from Washington.

Another effect of inadequate Medicaid funding is that physicians set a limit on the number of Medicaid patients they are willing to see. In 2006 only 68 percent of primary care physicians in Vermont were accepting new Medicaid patients. Also hospitals tend to refrain from recommending costly treatments for Medicaid patients when a low-cost, but perhaps less well-advised, alternative is available. The result is poor care for Medicaid patients.

Now hospital officials in Vermont are anticipating a major cut in Medicaid funds because of a policy shift that will not allow Vermont hospitals as large a claim on Medicaid funds as before. If they experience further Medicaid cuts, they may seek to raise rates to compensate. And if the cost of hospital care rises, then health insurance premiums will be driven up further.

The federal budget, including cuts in the growth of Medicaid funding, is the result of policy choices. The Bush administration has chosen record high levels of defense spending and the cutting of health care, among other cuts in domestic spending. These choices are being felt in Vermont. Vermont legislators will be pressed to bolster the state's share of Medicaid spending, but it is not easy to cover the demand for essential services when the budget of the federal government has become captive of an unnecessary war and the skewed priorities of an administration out of touch with reality.