Hawaii DHS puts Medicaid benefits on chopping block

The Hawaii Department of Human Services in early September announced its intention to reduce benefits for 16,000 Medicaid beneficiaries. The announcement is required by the federal Centers for Medicare and Medicaid Services as the first step in seeking approval from the agency. DHS says the changes, if approved, will affect 10 percent of the population covered under the state’s Quest Medicaid program.

DHS, which struggled with an $86 million deficit during the last fiscal year, says the changes are necessary in order to stem its hemorrhaging budget. The changes will affect non-pregnant adults under the age of 65. It will not apply to disabled beneficiaries who are covered under the state’s Quest Expanded Access program. Benefits will be reduced to the level of coverage under the state’s Basic Health Hawaii plan, according to a DHS spokesman.

Proposed reductions in benefits could affect needed access to care and increase the costs to providers, according to John McComas, CEO of Aloha Care, a Medicaid managed care organization.

“Making these cuts will do unknown amounts of damage to the health care of members and their access to care, and could drive people to the emergency room who have chronic conditions, such as diabetes or cancer,” said McComas.

The costs of uncompensated care in emergency rooms and the lost income from medical services that are no longer covered could affect the revenues of hospitals and clinics throughout the state. According to McComas, Medicaid dollars are matched two to one — for every one dollar of state money being cut, providers will lose two dollars of federal money.