Introduction

Forty-four states face budget shortfalls this fiscal year or next.  Because of Medicaid's prominence in state budgets – accounting for 17 percent of spending – the program is often a target for cuts. Twenty-six states and the District of Columbia have cut Medicaid this fiscal year by reducing eligibility, benefits or provider payments and increasing patient co-payments. The outlook is equally grim for next year.

To prevent harm caused by Medicaid cuts, defenders must persuade policymakers that:

• Cutting eligibility, benefits or rates, or creating barriers to enrollment are bad ideas
• There are better alternatives

This guide distills lessons from Medicaid defense work in a number of states and provides tools to fight cuts and introduce the most promising alternatives.

Building a case against Medicaid cuts

Four arguments demonstrate that Medicaid cuts are harmful and counterproductive: 

• Medicaid cuts hurt people
• Medicaid cuts are unpopular
• Medicaid cuts hurt the economy
• Medicaid cuts are inefficient and ineffective   

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Medicaid Cuts Hurt People

People Enrolled in Medicaid

Children, people with disabilities, and low-income seniors - groups that invoke sympathy - make up the majority of people served under Medicaid.  Although there may be slightly less support for covering parents, the public generally recognizes that people with very low income cannot afford health care on their own.  The public opposes the idea that people should be denied medical care because they are unable to pay.

Highlight the harm to Medicaid consumers:

• Organizing efforts: Use consumer helplines and existing grassroots organizations to find consumers to speak about health care provided by Medicaid.  Organize postcard campaigns with real life stories and pictures of individual consumers. 
• Media outreach: Target media outlets in areas where there are high levels of Medicaid participation, but also where employment may be sagging and working families may soon have to turn to public programs.  Use press conferences or call reporters and news directors directly.  Alternative media, such as digital story telling and recorded testimony, can be distributed on CD or uploaded to YouTube and other web-based distribution channels.
• Testimony in public hearings and meetings with public officials: Testimony by individual consumers who have benefited from Medicaid provides a powerful message about the program. 

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Health Care Providers

Medicaid cuts often translate into job losses for nurses, technicians, and other workers in facilities that serve Medicaid patients.  Safety net hospitals, community health centers, and nursing homes are major employers in many communities.  These organizations also provide critical services to the community that extend well beyond people enrolled in Medicaid.  For instance, many safety net hospitals also serve as major trauma centers for accident victims.  Sometimes providers prefer to speak out on behalf of their patients who will be harmed, rather than point out the more direct impact on their own funding.

Show that Medicaid cuts weaken providers: 

• Organizing efforts: Engage hospitals, community health centers, physicians groups, nurses associations, mental health providers and other health practitioners in a coalition.  Seek common cause in protecting Medicaid payments to providers.
• Media outreach: Create template op-eds and letters to the editor for hospital and community health leaders to place in local news outlets
• Testimony in public hearings and meetings with public officials: Individual testimony and lobbying visits by doctors, nurses, hospital administrators, and community health center staff can make a strong case that cuts will hurt these institutions and the broader community. 
• Create reports:  Prepare reports on the importance of Medicaid funds to employment in specific communities or legislative districts.

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Employers

Medicaid cuts hurt employers in two major ways.  If employees and their families rely on Medicaid for insurance coverage, cuts to programs lead to uninsured workers. Without health insurance, workers are typically less healthy and therefore less productive.  In addition, cuts to Medicaid result in shifting the costs of caring for the uninsured onto people with private insurance, leading to higher premiums.  

Demonstrate that Medicaid cuts harm employers:

• Organizing efforts: Engage businesses to work as partners in supporting Medicaid through local Chambers of Commerce, small business organizations and progressive businesses.  Demonstrate the critical health services that Medicaid funds, and show how many people in the community rely on Medicaid.  Find businesspeople to speak publicly about supporting Medicaid.  
• Media outreach: Employers are not the usual suspects in defending Medicaid.  Opposition to cuts from employers will likely attract more attention from policymakers and the media. Train small business spokespeople for interviews and outreach.
• Testimony in public hearings and meetings with public officials: Medicaid’s relevance to businesses has more resonance when employers themselves argue the case, rather than advocates.  Have credible business spokespeople provide testimony and meet with officials about the importance of Medicaid.

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Members of the community

The Institute of Medicine has documented problems that high rates of uninsurance cause for the entire community, including people with insurance.  These problems include emergency department overcrowding, losses in productivity, and even higher premiums.   

• Organizing efforts: Engage grassroots groups that are working to build stronger communities.  Make the case for Medicaid’s importance in the larger health system.  Another tactic is to reach out to mayors and other local public officials concerned about their communities. 
• Media outreach: Organize letters to the editor and public events such as press conferences to elevate Medicaid as a critical part of the community safety net.
• Testimony in public hearings and meetings with public officials: Show strong community support for the Medicaid program by bringing large numbers of people to the capitol through rallies and meetings. 
• Create reports:  Commission reports or use reports from national groups to show the harm uninsurance causes for everyone.    

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Medicaid cuts are unpopular

Polling and focus groups have repeatedly shown strong public support for Medicaid and opposition to cuts. 

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Medicaid cuts hurt the economy

Because states receive at least a 50 percent federal match for Medicaid, spending reductions in Medicaid can hurt the economy. Available tools can help advocates demonstrate this harm.

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Medicaid cuts are inefficient and ineffective

In addition to forfeiting matching funds, the state loses tax revenue because economic activity promoted by federal health spending declines. At the same time, costs to the state and to private businesses rise as more people become uninsured and the cost of emergency health care for the newly uninsured is shifted to other payers. Statewide, productivity falls as uninsurance grows. All in all, cutting public health programs at best saves pennies on the dollar, and at worst actually costs the state money.  Medicaid cuts are an ineffective and inefficient approach to balancing state budgets.

Alternatives to Medicaid cuts

Advocates have an opportunity in the current economic crisis to change the way policymakers think about managing Medicaid.  Rather than periodically hitting the panic button, policymakers could move to a rational, progressive approach to sustaining the Medicaid program.  Making these changes will likely require a sustained focus in both the short and long term. 

Strategies include: 

• Maximizing Medicaid revenue
• Reforming the payment and delivery systems
• Public health investments

Maximize Medicaid revenue

• Ensure that your state uses economic stimulus funds from the recently passed American Recovery and Reinvestment Act to support Medicaid and health care. 
• Increase provider and HMO taxes, and use this revenue to bring more federal Medicaid matching funds to the state.
• Increase tobacco taxes and earmark the revenue for Medicaid.  This is a smart strategy especially where tobacco taxes are low and federal matching rates are high. 
• Encourage policymakers to scour the state budget and identify current state services that could bring in additional federal matching payments.
  

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Reform the payment and delivery systems

States can strengthen Medicaid by improving quality in ways that also reduce costs.  Strategies that advocates can promote include: 

Increase effective use of prescription drugs

• Implement evidence-based drug formularies: A strong preferred drug list (PDL) in Medicaid provides incentives for using the most effective and least costly treatments.
• Evidence-supported prescribing (academic detailing): Doctors need up-to-date information about the effectiveness of different medications.  Academic detailing provides unbiased education and information to prescribers.
• Increase use of generic drugs:  Information campaigns about the effectiveness of and savings from using generics can cut spending.

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Pay for quality, not for harmful care

• Limit or eliminate payments for care that harms patients, such as preventable errors, hospital-acquired infections, and preventable readmissions to hospitals.  This could save millions of dollars.  
• Offer incentives for improved quality.  
  

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Strengthen primary care

• Expand the number of primary care doctors by increasing training and creating loan forgiveness programs
• Increase reimbursement for primary care and management of all services that affect patients' health
• Broaden the opportunities for nurse practitioners and physician assistants to serve as primary care providers
• Create medical homes, central facilities that often coordinate care and provide a full range of services for members from preventive visits through hospitalization.  Tap into federal funds, through the American Recovery and Reinvestment Act (ARRA) and other sources, to expand community health centers. 
  

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Coordinate care for high cost and chronically ill beneficiaries

The majority of Medicaid costs are concentrated in a small proportion of people with chronic health problems, such as asthma, diabetes and behavioral health issues, who are often hospitalized or institutionalized due to lack of coordinated care and support in the community. 

• Create care delivery models that integrate care for people eligible for both state Medicaid and federal Medicare programs.
• Expand care options for people with chronic illnesses through enhanced medical homes, which provide a central place for all care, from primary care visits and screening to more acute care services. 
• Empower consumers to better manage their chronic illnesses through tools that help patients understand and weigh treament options and through home monitoring of conditions. 

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Public health interventions

Investments in a healthier population will pay dividends in reduced health spending and higher productivity in the future.  Strategies include: 

• Reduce tobacco use through increased tobacco taxes, bans on tobacco sales at certain stores, and smoking cessation programs
• Prevent HIV through comprehensive sex education in schools, increased pharmacy access to clean needles, and expanded education on HIV infection and treatment
• Increase vaccination rates by offering education and access to vaccines at community centers, using mobile immunization clinics, and creating informational campaigns.
• Reduce health disparities.  Collect data on racial and ethnic health disparities, fund health outreach workers to bridge cultural differences, and fund translation services in all health settings.
• Strengthen the public health infrastructure.  Build up local health departments to be able to respond to issues such as pandemic illness, food and water contamination, and environmental health problems in the community.
  

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