Potential Medicaid cuts would be ‘devastating’ for Hawaii

When Amy Feeley-Austin of Kona was going through a tough time, Medicaid was a lifesaver that provided health care for her two young children.

Twelve years ago her husband died, leaving her and the children with no health insurance. It was a sudden and unexpected turn of events, and in a time of grief, she had to scramble to get health care insurance.

Thanks to Medicaid, she was able to get coverage for her two children to continue their regular doctor visits, as well as specialized services her son needed for a disability. She worked for a social services organization at the time, but the cost of employer insurance was three-quarters of her salary.

She worked her way to a higher-paying job, eventually, with employer-­provided health coverage and no longer needed Medicaid after two years. She also went on to earn several advanced degrees and is now chief operating officer at Kona Community Hospital.

Looking back, Feeley-­Austin, 42, will never forget how Medicaid was there when she needed it.

"This was a very real need," she said. "It was a way to make sure my kids were safe and healthy while I figured out how to address this horrible, traumatizing thing, and we were able to move forward from there."

But Medicaid is under threat, with Republicans in Congress considering cuts to the program as part of a wide-ranging budget package.

Congress is targeting up to $880 billion in cuts over 10 years, according to KFF, a health policy think tank. Some possibilities include adding new work requirements for eligibility and scaling back the federal share of Medicaid costs.

Although details remain up in the air, KFF said any reduction in federal Medicaid would leave states with tough choices on how to offset reductions.

Nationally, Medicaid provides health care coverage for more than 80 million Americans.

Gov. Josh Green ran through the numbers on his whiteboard in a recent social media post, saying federal cuts to Medicaid would result in increased medical debt for residents and potentially affect Hawaii's rural hospitals.

It would mean fewer people getting their high blood pressure diagnosed or their medication for diabetes.

"A cut to Medicaid is a cut to all of our care in the country, basically, and we won't let that happen without a fight," said Green. "Please know we're going to continue to work hard to make sure all our people are well cared for."

A safety net

In Hawaii, Medicaid is administered as Med-QUEST, and provides health care coverage for more than 400,000 residents. It provides health care for 1 in 3 keiki and covers 1 in 3 births in the state.

It covers low-income children and adults, pregnant women and aged, blind and disabled people, among others, for doctor visits, inpatient hospital services, prescription drugs and more. It also provides nursing home coverage and home-based care to those who qualify.

In Hawaii, federal funds cover 73% of the $3 billion spent annually on Medicaid.

At this time there have been no changes to Medicaid funding in Hawaii, according to the state Department of Human Services, which runs Med-QUEST.

"We continue to monitor the debate over Medicaid funding that is happening at the federal level," said DHS in an announcement posted to its website. "Please be assured that no changes have been made at this time to Hawaii's Medicaid program, Med-QUEST. We encourage you to continue to access healthcare by making and keeping appointments with your health care professional and picking up any medications that are prescribed."

Francoise Culley-Trotman, CEO of AlohaCare, is also watching developments closely.

AlohaCare is nonprofit health plan that has provided coverage for QUEST beneficiaries since its founding in 1994. It is Hawaii's second-­largest Medicaid health plan, behind HMSA, with more than 70,000 members.

Culley-Trotman said Medicaid serves as a vital safety net for individuals and families who cannot afford private health insurance or have limited access to employer-­sponsored coverage.

Any cuts to Medicaid funding would be "very devastating" for Hawaii, she said.

"The difficulty of thriving in an expensive state itself is a challenge," she said. "When you remove those resources, you're challenging the household and people's ability to take care of themselves. There's going to be disruption in caregiving."

If access to health care is reduced, she said, the whole ecosystem of care is affected. Oftentimes, people without routine health care resort to using emergency rooms, which is costly and strains the hospital system.

AlohaCare celebrated Medicaid Awareness Month in April by collecting stories such as Feeley-Austin's, and will continue to do so until federal and state Medicaid budgets are finalized.

She expects to know more this fall, when final decisions are made. But the uncertainty from not knowing the details is also extremely stressful, she said.

Hospital strain

All of Hawaii's hospitals would be affected by Medicaid cuts, as all care for Medicaid patients, according to Hilton Raethel, president and CEO of the Healthcare Association of Hawaii.

A reduction in Medicare reimbursements would increase the financial burden for hospitals, many of which are already struggling.

"Our hospitals already operate on very, very narrow margins," said Raethel. "It's a very challenging health care environment, and labor costs are going up."

Additionally, Medicaid covers about 60% of patients at skilled nursing facilities in Hawaii and is the single largest payer for long-term care in the state.

Raethel said he expects the state Legislature to address federal cuts during a special session in November and that by then Hawaii should know how much and where the cuts will be.

For now it's a waiting game.

"The state has been very careful to put aside some dollars so if they do need to close some of these gaps, they have the ability to do that in the short term," he said, "but they still have limited ability depending on how draconian these cuts might be."

There also would be other cuts to address, including cuts to education.

Hawaii's congressional delegation is aware of the pending threats, and advocating for their fellow Congress members, including Republicans, to think about the devastating impact to their states.

U.S. Sen. Mazie Hirono condemned the impending cuts to a critical program such as Medicaid, warning that it could affect thousands of residents in Hawaii.

"President Trump and Republicans are working to cut over $800 billion in Medicaid funding, which would impact hundreds of thousands of people in Hawaii," said Hiro­no in a statement. "As costs continue to rise for working families, Republicans are jeopardizing health care access for millions of Americans in order to pay for trillions in tax cuts for their billionaire buddies. Medicaid is an essential resource that helps rural communities, people with disabilities, keiki, and kupuna access health care, and I will do everything in my power to protect this crucial program."

U.S. Sen. Brian Schatz recently met with The Queen's Medical Center to discuss growing demands for its emergency department and the potential impact of Med-QUEST cuts. A significant share of Queen's patients are Med-QUEST recipients, he said.

AlohaCare's Culley-­Trotman said part of her campaign is to battle the misconception that Medicaid recipients are lazy or unwilling to work.

Nationally, nearly two-thirds of adult Medicaid enrollees work either part or full time, according to KFF, while the rest are students, caregivers, disabled or ill.

AlohaCare's Culley-­Trotman said about 60% of adults on Med-QUEST in Hawaii have a job, and in some cases multiple jobs. Some have jobs without consistent hours, which leaves them unqualified for health insurance coverage.

Feeley-Austin says both her children are doing well now, with one about to graduate from high school and the other attending college - and she is grateful Medicaid was there when she needed it.

"It's very humbling," she said. "I keep going back to there's this concept, especially with everything happening at a national level, that people can just do it themselves. That's not always what happens."

Sometimes there are sudden job losses, she said, or accidents that result in disabilities and serious illnesses - and Medicaid is a safety net, especially for children.

Based on an earlier analysis by the Center on Budget and Policy Priorities, Hawaii would have to raise taxes or cut other parts of its budget by an estimated $3 billion over 10 years to maintain Med-QUEST, including the Medicaid expansion to low-income adults.

"Cutting Medicaid by taking away coverage and shifting costs to states will have long-term and expensive repercussions, including worse health outcomes, greater costs to hospital systems, and straining state and local economies," said the center. "Cutting Medicaid is ill-advised and should be rejected."

The cuts would be the most severe, the center said, to states like Hawaii that have expanded Medicaid to low-income adults.