Medicaid Crunch Could Be Worse Next Year

Think Mississippi is having a Medicaid headache this year? Just wait until next year.

Legislators already are warning that the program will be woefully underfunded in the budget year starting July 1, and that will mean more scrambling to contain costs in health coverage for 650,000 of Mississippi's 2.8 million people.

Medicaid officials are requesting $537 million from the state general fund for fiscal 2003. But with money tight in all parts of state government, legislative budget leaders are recommending only $249 million for Medicaid.

House Appropriations Chairman Charlie Capps warns decisions could be painful as lawmakers weigh Medicaid against other vital state services.

"I can see Medicaid falling over and taking the moneys out of mental health, IHL (Institutions of Higher Learning) and community colleges,'' Capps, D-Cleveland, told the House last week. "It's not going to take but a short period of time for this to explode more than it is now.''

Rep. George Flaggs, D-Vicksburg, was more blunt.

"Our budget, our fiscal situation, is a mess and we're going to have to make some tough votes to get out of it,'' said Flaggs, who's on the 14-member Joint Legislative Budget Committee.

Medicaid is a federal-state program for the needy, aged, blind and disabled. Mississippi has the most generous match rate of any state from the federal government - for every $1 the state puts in, Washington antes up almost another $3. That multiplies the effects of cuts or underfunding.

Officials see federal dollars slipping away for every state dollar that could go to Medicaid but doesn't. More than 40 states are struggling with Medicaid budget problems this year.

Mississippi's program is running a $158 million deficit for the fiscal year ending June 30. The final version of a bailout bill that cleared the House and Senate last week promises to cover all but about $17 million of the deficit through a combination of service cuts, fee increases and a dip into a health care trust fund established with winnings from a tobacco lawsuit.

The bill specifies several changes in optional programs. Instead of allowing Medicaid patients up to 10 prescriptions a month, for example, the program will allow up to seven.

Mississippi's Medicaid problems stem from several areas, but officials say the biggest culprits are higher enrollment and skyrocketing prescription costs.

Even as they fought to cobble together a bailout bill, some lawmakers grumbled that pharmaceutical manufacturers were spending too much on advertising and driving up costs for customers, including large customers like state Medicaid programs. Rep. Steve Holland, D-Plantersville, held up a recent Time magazine that had, he said, 17 full pages of drug company ads.

"I wish our federal people would do something about it,'' Holland said.

In January, Gov. Ronnie Musgrove offered several proposals to cover Medicaid's deficit. Lawmakers ignored most of them.

The governor said last week he would have to study the Medicaid bailout bill before deciding whether to sign it. He also criticized lawmakers for planning to give the program millions less than it needs for next year.

"We've got to use real numbers, and then you've got to have a priority budget,'' Musgrove said.