Medicaid optional benefits on chopping block in HCA’s budget proposal

The Washington State Health Care Authority (HCA) this week submitted its 2021-23 operating budget proposal to the Office of Financial Management (OFM), outlining budget priorities and potential cuts to the agency.

In response to the economic downturn brought on by COVID-19, OFM in May directed state agencies to identify options for reducing their general fund spending by 15% for FY21 appropriations. OFM also directed agencies to be prepared to propose spending reductions in their 2021-23 budget proposals.

 

 

To prepare for a potential 15% budget reduction, HCA is proposing a series of cuts, many of which involve the elimination of optional Medicaid benefits.

In one decision package, HCA proposes the elimination of adult dental services under Medicaid. Cutting adult dental would result in $26.6 million in general funds savings for the biennium, but would cause nearly 1 million Medicaid members to lose their dental benefit.

“These individuals come disproportionately from marginalized communities and include significant portions of adults from communities of color, adults with chronic health conditions and older adults,” reads the decision package description.

The decision package also notes that last year, over 265,000 dental visits for Medicaid-covered adults were for urgent dental problems. Without dental coverage, HMA assumes individuals with dental emergencies will resort to visiting emergency rooms for care, potential resulting in increased costs and poorer outcomes.

Other optional Medicaid benefits on the chopping block include interpreter services ($14.97 million GF savings), hospice ($24.2 million GF), occupational, physical and speech therapy ($11.3 million GF), and maternity supports – such as Infant Case Management, Maternity Support Services, and Childbirth Education ($23.5 million GF).

In the budget request, HCA also has proposals to eliminate the Compact of Free Associations (COFA) medical and dental plans, the Non-Citizen Children’s Health Program ($39 million GF savings), and abortion care for Apple Health clients ($6.2 million GF).

HCA says they are limited in the areas where they can make reductions, as many Medicaid services are federally required. They also note that these cuts won’t necessarily be included in the Governor’s budget proposal which will be released in December.

“HCA’s options represent painful cuts to programs and services that none of us want to take,” said HCA Director Sue Birch in a prepared statement. “Our priority when considering budget reductions is to preserve access to affordable health care services for the most vulnerable. HCA has frozen hiring, contracts and equipment purchases, and has worked to delay or reduce expenditures to the extent possible.”