Disabled and Senior Medicaid Users Could Face Potential Cuts Under Obama’s Budget Offer

President Obama proposed paring $100 billion from Medicaid over the next ten years during recent negotiations. The majority of the savings would come from the federal government’s potential switch to a “blended rate” in state reimbursements. Under the blended rate, the federal government would pay states the same rate for all Medicaid patients (currently, states receive different rates for different populations.)

The new rate system would cause states to take on significant Medicaid costs since the federal government would reduce its funding to states. States may resort to cutting or reducing benefits to Medicaid recipients to make up for the reduced reimbursements. According to Elder Law Answers, states will likely reduce Medicaid services to the disabled and elderly first because this class of Medicaid users account for the majority of the money used.

See Obama Budget Offer is Likely Medicaid Cut for Seniors, Disabled, Elder Law Answers, Jul. 8, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.