A Democrat Calls for Cuts in Medicaid

ALBANY - New York should control the spiraling cost of its Medicaid program by trimming benefits and tightening eligibility rules, according to a new proposal by an upstate Democrat.

The plan from Assemblyman Robin Schimminger of Kenmore, near Buffalo, calls for the state to eliminate or restrict Medicaid benefits that are optional under federal rules, such as coverage for dental care and eyeglasses.

Also, it says the state should deny all Medicaid coverage to people who have lived in New York less than 90 days, and crack down on the "estate planning" maneuvers that allow wealthier people to qualify for Medicaid when they enter a nursing home.

The proposal from Mr. Schimminger, a 28-year veteran of the Assembly, kicks off what is likely to be a hard-fought battle over the future of the state's $43 billion Medicaid health plan for the poor and disabled. The cost has mushroomed by $10 billion, or 30%, in the past three years; New York spends almost as much on the program as California and Texas combined.

With the state facing a $6 billion deficit in the next fiscal year and local governments struggling to pay their share of the program's cost, Mr. Schimminger argues that Medicaid benefits ought to be "brought more in line with those of private health insurance."

"Over the past months I literally heard from hundreds of my constituents, from young working parents to retired senior citizens, suggesting that Medicaid needed to be fixed," Mr. Schimminger said in an interview yesterday. "They pay for their own health insurance and get a package of benefits far less than those that they pay for through their taxes in the Medicaid program."

For example, he said, Medicaid covers dental care and eyeglasses, while many private plans do not. "It's simply a question of how much can state and local governments afford to continue to pay," he said.

Mr. Schimminger did not propose to trim the fees that Medicaid pays to hospitals, nursing homes, and other providers, a means of cost control that has been proposed by Governor Pataki in the past. Also, his plan does not call for the state to take over the share of Medicaid paid by New York City and county governments, which is roughly 15% of the total.

Still, a proponent of cutting state spending, E.J. McMahon of the Manhattan Institute, called Mr. Schimminger's plan "a useful compendium of good ideas."

"It's not the be all and end all, but it's a lot of stuff that would need to be part of any solution," Mr. McMahon said. "It's promising that a senior Democrat like him is proposing something like this." Others reacted negatively to the proposal, saying the state should not be withdrawing benefits that millions of New Yorkers depend on for their good health.

"It's easy to talk about cutting Medicaid," the chairman of the Assembly Health Committee, Richard Gottfried of Manhattan, said. "It's a little tougher to talk about taking health care away from the elderly, disabled, and poor children." "My interest in the Legislature is in defending Medicaid against proposals to cut it back," Mr. Gottfried said. "I'm sympathetic with the concern about the burden on counties and generally favor shifting the Medicaid cost to state taxes rather than county taxes. But I don't think cutting back on benefits - cutting back on health care - for poor people is the right approach."

Mr. Schimminger's plan, which he plans to introduce as legislation early next year, has nine points:

* Eliminate or limit certain optional benefits statewide.

* Give New York City and county governments the ability to restrict other optional benefits.

* Impose new co-payments and increasing existing co-payments for Medicaid recipients.

* Tighten eligibility rules, including denying coverage to people with low income but substantial assets.

* Crack down on middle-class and wealthy people who hide or transfer assets before entering a nursing home so that Medicaid will cover their bills.

* Increase a tax credit for long-term care insurance premiums, to 50% from 20%.

* Enroll more Medicaid recipients in managed-care plans.

* Make maximum use of Medicare benefits for people who also qualify for Medicaid.

* Establish a 90-day residency requirement for Medicaid eligibility.

An anti-poverty activist at the Schuyler Center for Analysis and Advocacy, Karen Schimke, said similar ideas have been proposed in the past, but have been consistently rejected when "cooler heads prevailed."

Ms. Schimke argued that denying coverage for such things as dental care and eyeglasses would make it harder for Medicaid recipients to leave the program, because people with no teeth and poor eyesight would have trouble finding good jobs.

"Have we thought through why these items got put on the list in the first place?" Ms. Schimke said. "They may call them optional, but when you ask yourself, 'Are they really optional?' very often the answer is no."

A health-care consultant who studies Medicaid, John Rodat of Signalhealth, said the menu of optional benefits adds relatively little to the cost of the program. He said New York's Medicaid plan is more expensive primarily because it hospitalizes an unusually high percentage of its patients, and because it invests far more in long-term care for the elderly than other states.

"Scaling back benefits on an across-the-board, broad-brush basis is just skipping the harder but potentially more productive work," Mr. Rodat said. "Medicaid pays for over 600,000 hospital admissions a year in New York. How many pairs of eyeglasses can you buy for the cost of one hospitalization?"