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 Partisan
Policy Disputes Mark DCH Budget
Gongwer News Service, June 7, 2004
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Look for a
multitude of proposed changes by House Democrats when the
Community Health budget goes before the full Appropriations
Committee on Tuesday, particularly in attempts to restore funds
to the Healthy Michigan program and boost money for caregivers.
The $9.7 billion budget (SB 1063) cleared the Community Health
Subcommittee Monday without debating the objections Democrats
have to the bill, leaving the disputes for resolution in full
committee.
Rep. Gretchen Whitmer (D-Lansing) said the budget includes some
provisions that amount to bad policy and that will cost the
state more money in the long run, particularly cuts that she
said "gutted" Healthy Michigan and eliminated Medicaid support
to caretaker relatives and persons aged 18-21.
The caretaker reimbursement program was pared by $26.8 million
from the governor's recommendation, which relied on revenues
from the proposed tobacco tax increase being used for smoking
prevention efforts, chronic disease prevention funding and
maternal/child health programs.
Instead, that money is to be used to reduce the amount of
general funds appropriated for Medicaid services as the
subcommittee proposal agreed with the Senate-passed version in
restoring benefits for adult dental care, chiropractic services
and podiatric services.
Ms. Whitmer said every dollar invested in Healthy Michigan
services pays off by multiple amounts in future years.
Rep. Gary Newell (R-Saranac), chair of the subcommittee, said
he, too, likes many of the programs, but a budget hole of about
$100 million - accounted mostly from unrealistic assumptions of
revenue from retaining the estate tax - forced the reductions.
"I'm co-chair of our health caucus and I'm a pretty big
proponent of those kinds of things," he said. "It (Healthy
Michigan) does save money in the long run, but when you
eliminate money for dental services for older folks and you're
faced with the option of allowing people to chew food or
benefits that may pay off down the road, I'm going to go with
allowing people to chew food."
The executive proposals assumed $94.3 million in revenue from
the estate tax, but that proposal has been all but killed by
legislative Republicans and Democrats concur its chances of
approval are not good.
The caretaker provisions affect 34,000 persons and another
11,000 persons aged 18-21 would lose benefits under the bill, a
combined savings of $119 million ($51.5 million in general
funds).
"From my perspective, it's bad policy," Ms. Whitmer said, adding
that courts shot down a similar attempt by former Governor John
Engler because the Medicaid law had not been changed.
Mr. Newell said the cuts affect healthy persons and were among
the difficult choices needed to produce a balanced budget for
the department.
Ms. Whitmer also objected to about $27 million in savings that
is embodied in the budget: $27.2 million with a 1 percent
overall cut to be managed by the department; $27 million in an
additional year of savings expected this year through Medicaid
self-financing interest payments; accepting Senate language
precluding nursing homes from passing through wage increases
provided to workers; removing $36.6 million in savings in
Medicaid pharmacy services; and stripping $225,000 from the
Wayne State University diabetes outreach program.
Ms. Whitmer said the 1 percent cut is an abdication of the
Legislature's responsibility and oversight for the budget.
But Mr. Newell said the provision gives departments more
flexibility than if the Legislature were to dictate how
additional savings are to be accomplished.
The governor's recommended Medicaid pharmacy savings, which had
been accepted by the Senate, reduced the pharmacy dispensing
fee, increased the average wholesale discount on brand name
drugs, provided a 30 percent discount for generic drugs and
implemented an optional mail order policy. Instead, the House
version saves $2.3 million by increasing brand name co-payments
to $3, limiting to four prescriptions per month for brand name
drugs and assuming savings from a Warner Lambert settlement.
The budget includes $229.5 million to reflect a 3.3 percent
growth in Medicaid due to caseload increases, $124 million for a
7.5 percent increase to HMO provides of Medicaid services, $29.3
million for a 2.5 percent increase to mental health providers of
Medicaid services
The general fund portion of the budget is $10.1 million less
than the revised recommendation of Governor Jennifer Granholm,
$508.1 million less than the Senate (which did not build in the
revenue from tobacco, liquor and estate taxes) and $187 million
less than the current year. In total spending, the bill is $18.2
million below the revised executive recommendation, $8.9 million
less than the Senate and $23.5 million more than the current
year.
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