Study: Cutting Medicaid family planning won't save money
Study: Cutting Medicaid family planning won't save money
The Guttmacher Institute says the experiences of states that have expanded Medicaid family planning programs during times of budget strain prove that cuts to family planning would end up costing money in the long run.
With the Deficit Reduction Act of 2005 giving states significant new latitude to change their Medicaid programs, including excluding family planning from the benefits offered to some groups of enrollees, the institute is pushing the notion that such actions would be penny-wise but pound-foolish.
"Medicaid cuts would have significant implications for women's access to contraceptives and their ability to prevent unwanted pregnancies," the institute said in a statement, "because Medicaid is now the largest single source of public funding for family planning. Nearly 12% of all women of reproductive age rely on Medicaid for their health care, and the program provides more than six in 10 public dollars spent on family planning in the United States. Cuts to Medicaid funding for family planning would increase the difficulties that poor women already face in accessing the contraceptive services and supplies they need to avoid unplanned pregnancies."
The institute said there are several compelling reasons to expand Medicaid family planning rather than cut it:
- Family planning funding prevents unintended pregnancy and reduces the need for abortion. The Institute estimates that publicly supported family planning each year helps women prevent an estimated 1.3 million unintended pregnancies and 632,000 abortions.
- Family planning funding saves money. A study funded by the federal government found that states that expanded eligibility for family planning under Medicaid saved money, even as they served more women. And the Guttmacher Institute estimates that every dollar spent on contraceptive services saves $3 in Medicaid costs for pregnancy-related and newborn care alone.
Guttmacher Institute Medicaid expert Rachel Benson Gold tells State Health Watch 23 states have expanded Medicaid family planning with positive results.
Required service
"Since 1972," she says, "family planning has been one of a handful of services the federal government has required all state Medicaid programs to cover, and it is one of the very few services for which patient cost-sharing is prohibited."
Under the Deficit Reduction Act, Ms. Gold says, scaled-back benefits packages can be offered to two groups of enrollees for whom access to family planning is critical — parents enrolled in the program and some women who have recently had a Medicaid-funded delivery and who, up to now, have been entitled to obtain family planning as part of postpartum care.
"In addition to allowing states to scale back enrollees' benefits packages, the Deficit Reduction Act gives states the option to impose 'nominal' cost-sharing for some drugs prescribed as part of a family planning visit," Ms. Gold says.
The legislation also removed a long-standing statutory protection that barred providers from denying care to enrollees unable to afford the required cost-sharing. Ms. Gold says these two provisions mean, for the first time in more than 30 years, enrollees seeking family planning services may be charged for some of the care they receive and may be denied care if they are unable to pay.
Ms. Gold says the experience of states that have opted for expanded family planning shows that reducing family planning coverage runs directly counter to three major goals articulated by Deficit Reduction Act supporters. First, she says, the major goal of the law's Medicaid provisions is to cut Medicaid costs. But the way to reduce Medicaid costs (see chart) is to expand coverage of family planning, not cut it, she adds.
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An evaluation of state experiences found that by helping thousands of women each year prevent unplanned pregnancies that would have resulted in Medicaid-funded births, the family planning expansions resulted in millions of dollars in savings to both the federal and state governments.
A second Deficit Reduction Act goal, Ms. Gold says, is to promote program enrollees' personal responsibility.
"The notion is that if enrollees are required to shoulder a part of the cost of their care, they will cut back on unnecessary care, which, in turn, will lower Medicaid costs," she explains. "This argument, however, is counterproductive when it comes to family planning, because enrollees are acting responsibly when they utilize contraceptives, not when they forego them. Any cost-sharing that would discourage use would, therefore, be counter to the goal of personal responsibility. Moreover, any cost-sharing imposed on a prescription medication that would discourage enrollees from treating a sexually transmitted disease would likewise be counterproductive, resulting not only in a more serious medical situation for the enrollees, but possibly in the transmission of new disease to someone else."
Seeking health care improvement
A third major goal of the legislation is to allow states to improve enrollees' health care and, by extension, their health. This would be accomplished by offering coverage that better meets each patient's needs. Clearly, reducing coverage for family planning runs counter to achieving that goal, according to Ms. Gold. The Centers for Disease Control and Prevention (CDC), Ms. Gold says, identified family planning as one of the top 10 public health achievements of the 20th century and, in 2000, the federal government set a goal to reduce unintended pregnancies by 40% over 10 years, and recognized family planning as the key to achieving that national objective.
A 2004 evaluation of states that have expanded family planning services commissioned by the Centers for Medicare & Medicaid Services (CMS) found that every one of the expansion programs studied not only met a federal requirement for budget neutrality, but actually saved money.
The CMS evaluation looked at state waiver programs in Alabama, Arkansas, California, New Mexico, Oregon, and South Carolina to determine whether they met the federal requirement for budget neutrality (federal spending under the waiver can't exceed what federal spending would have been without the waiver).
Ms. Gold said the evaluators used what they deemed to be the most appropriate method for calculating budget neutrality and found that all six programs resulted in often substantial net savings (see chart, above). "Interestingly," Ms. Gold said, "corroboration for the CMS cost-savings finding came recently from Wisconsin, but for an unlikely reason. Since 2002, Wisconsin has had a waiver to provide family planning services to all women in the state with incomes up to 185% of poverty. A bill is pending in the state legislature to limit coverage under the waiver to individuals ages 18 and older. A cost estimate for the provision developed by the Wisconsin Department of Administration indicated that denying care to individuals 15 to 17 would result in more than 3,300 additional births to teens in the state, at an additional cost of $12.7 million in public funds over a five-year period."
Save money, increase access
The CMS evaluation also found that even as they saved money, the waivers increased access to services. Thus, in four of the six states, the number of clients served in clinics receiving funds through the Title X program who met the eligibility requirements for the waiver grew after the program was implemented. And Ms. Gold says the study found evidence in two states of a measurable reduction in unintended pregnancy among the total population of women eligible for the waiver, a very high bar for the program to clear, according to the researchers.
Ms. Gold said the evaluation findings "have significant relevance for policy-makers at the state level as well. In harsh economic times, when the states are feeling compelled to make difficult choices about their Medicaid programs, an effort that can reduce costs while actually improving access to care for enrollees may be particularly attractive. Because family planning services are cost-effective, the more people eligible to receive services, the greater the savings to the federal government and to the states. According to the CMS study, programs 'that cover all low-income women, for example, will likely reach more of the expansion-eligible women in a given year than those that cover only postpartum women.
"Accordingly, the eight states that have tailored their waiver programs more narrowly to women losing Medicaid coverage may want to reassess the scope of their efforts. Similarly, in light of the study results from Wisconsin, those states that are considering barring teenagers from eligibility under their programs may want to think twice before doing so."
At a 2005 Kaiser Family Foundation briefing on women and Medicaid, foundation vice president and director of women's health policy Alina Salganicoff said the vast majority of women on Medicaid are in their reproductive years, although they're not the most expensive population to treat.
"The elderly and disabled account for two-thirds of the spending because of [their] greater health needs and more costly medical and long-term care," Ms. Salganicoff said.
On average, a low-income adult on Medicaid, typically a mother, costs about $2,000 a year to treat, whereas a disabled elderly beneficiary costs about $12,000 a year.
Women comprise more than 70% of the adult Medicaid population and are more likely than men to qualify because of their lower incomes and status as single, low-income parents of children, she said.
"Forty percent of poor women are still uninsured," Ms. Salganicoff asserted. "Women on Medicaid are more than four times as likely to report their health as fair or poor," because low-income people tend to have more health issues."
Medicaid covers half of the women in the United States with a permanent physical or mental impairment who live in a community setting. This percentage is even higher among institutionalized women—Medicaid pays for the care of nearly three-fourths of the residents in nursing homes.
Relatively new to Medicaid assistance are uninsured women with breast and cervical cancer, Ms. Salganicoff said. In 2000, treatment was extended as an optional Medicaid benefit for women screened under a program established by the CDC in 1990, she reported. "In California alone, 10,000 women got treatment under this program."
Study materials from the Guttmacher Policy Review and Guttmacher Report on Public Policy are available on-line at www.guttmacher.org. Contact Ms. Gold at (202) 296-4012, ext. 4228. Contact Ms. Salganicoff at (202) 347-5270.
The Guttmacher Institute says the experiences of states that have expanded Medicaid family planning programs during times of budget strain prove that cuts to family planning would end up costing money in the long run.Subscribe Now for Access
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