Dear Colleague,

The new 2006 US federal budget included cuts in Medicaid that allow individual states to set new copayments on most services, including medications, hospitalizations, and preventive services for children. These funding reductions may result in an increase in the number of uninsured and underinsured persons.

Let me highlight a few of the cuts and their effects, based on the Congressional Budget Office (CBO) report and Robert Pear’s New York Times article on the topic^1,2:

• The CBO estimates that because of these new premiums, about 45,000 enrollees would lose Medicaid coverage in fiscal year 2010, and 65,000 would lose coverage in fiscal year 2015; approximately 60% of those losing coverage would be children.
• Roughly 13 million low-income people (one fifth of Medicaid recipients) would face new or higher copayments for medical services, such as doctor visits, medications, and hospital care.
• About 1 in 3 people affected would be children, and almost half would be individuals whose income is below the poverty level.
• States can end coverage for people who fail to pay premiums for 60 days or more.
• Doctors and hospitals could deny services to Medicaid beneficiaries who did not make the required copayments.
• The CBO report noted that 80% of savings from higher cost sharing would be due to decreased use of service.
• The CBO report predicted that states would charge premiums to 1.3 million low-income persons and reduce benefits for 1.6 million people. Most cuts would affect dental, vision, and mental health care.

According to President Bush, Medicare, Medicaid, and Social Security are expected to consume 60% of the federal budget in 2030 and even more of subsequent budgets.³ Obviously, Medicaid needs reform. Reform on the backs of children, however, is not what the doctor ordered.

A 2001 study demonstrated that when welfare populations were asked to make a copayment for drugs, fewer prescriptions were filled; adverse reactions, including death, hospitalization, and nursing home placement, increased by 88%; and emergency department visits rose by 78%.⁴ These are not small effects, and the costs in dollars and lives can be enormous. Another study showed that copayments for substance abuse services initially resulted in savings but ultimately led to more relapses and higher long-term costs.⁵

The new copayments may force people to choose whether to go to the doctor and fill their prescriptions or feed and clothe their families. These are not choices that we as a society should force anyone to make. Furthermore, although Medicaid is thought of as health care for the poor, it is also health care for children. It promises that children in America will have preventive services and get the health care they deserve. Underutilization of appropriate preventive services will only increase the lifetime cost of care for our children. Add to this the data showing that being uninsured increases mortality and morbidity,⁶ and we come to the conclusion that the Deficit Reduction Act of 2005 will likely increase mortality and morbidity among our nation’s poor and young.

We know that Medicaid, Medi­care, and our health care system as a whole desperately need reform. Although I cannot speak for the American Medical Association (AMA), the AMA does have a plan: tax credits that are inverse­­­ly proportional to income—give everyone the means to purchase insurance, and then let the market work. That said, we must keep our well-being safety net (ie, Medicaid) intact. Medicaid is part of a promise we have made to our people. We must reform Medicaid to fit into a modern America. The AMA can help lead the way to make that happen, by repairing and reconstructing an ailing system.

Call your representatives, and tell them that the Medicaid cuts in the Deficit Reduction Act of 2005 are unacceptable. Join the AMA in fixing our broken health care system, because together we are stronger.

David Rosman, MD, MBA
Delegate
American Medical Association
House of Delegates
Resident and Fellow Section
Governing Council

References
1. Letter to the Honorable John M. Spratt Jr. regarding Medicaid provisions in S. 1932, the Deficit Reduction Act of 2005. January 27, 2006. Available at www.cbo.gov/showdoc.cfm?index=7030&sequence= 0&from=7

2. Pear R. Measure would hurt poor on Medicaid, report says. New York Times. January 30, 2006; sect A:14.

3. Office of the Press Secretary. Fact sheet: President Bush signs the Deficit Reduction Act [press release]. Washington, DC: The White House; February 8, 2006.

4. Tamblyn R, Laprise R, Hanley JA, et al. Adverse events associated with prescription drug cost-sharing among poor and elderly persons. JAMA. 2001;285:421-429.

5. Lo Sasso AT, Lyons JS. The effects of copayments on substance abuse treatment expenditures and treatment reoccurrence. Psychiatr Serv. 2002;53:1605-1611.

6. Baker DW, Sudano JJ, Albert JM, et al. Lack of health insurance and decline in overall health in late middle age. N Engl J Med. 2001;345:1106-1112.

American Medical Association- Resident and Fellow Section 2005-2006 Governing Council

Joe Craft III, MD, Chair
Sunny Ramchandani, MD, MPH, Chair-Elect
Kelly Caverzagie, MD, Vice Chair
Douglas Che Miller, MD, Secretary
David Rosman, MD, Delegate
Adam Levine, MD, Alternate Delegate
Alexander Llanos, MD, Member- at-Large
Michelle Nichols, MD, Member- at-Large
Samantha Cramoy, MD, Resident Trustee
Julie Snelling, Director Department of Resident and Fellow Services

“Code Blue” is prepared by the Resident and Fellow Section of the AMA. Unless specifically indicated, its articles and opinions do not necessarily reflect the policy of the AMA or the opinions of the editors or the publisher of Resident & Staff Physician. This news­letter is contained in Resident & Staff Physician solely as a service to residents.

The journal is not in any way involved in deciding the content of “Code Blue.” All questions, suggestions, or requests for additional information should be sent to the AMA Department of Resident and Fellow Services, 515 North State Street, Chicago, IL 60610, or phone 312/464-4751. The Amer­ican Medical Association-Resident and Fellow Section (AMA-RFS) is this nation’s strongest voice for residents and their patients. Visit our Web page at www.ama-assn.org/gorfs To join or renew your membership, call the AMA-RFS at 800/AMA-3211.