Leeway sought for Medicaid cuts Schaefer wants flexibility in cutting federal services.

Gov. William Donald Schaefer says he wasn't trying to send any particular message to anybody, but it came across loud and clear anyway -- the state wants more flexibility in how it distributes and cuts Medicaid services mandated by federal law.

Schaefer and state Health Secretary Nelson J. Sabatini yesterday held a news conference to outline the financial problems the state's program of medical care for the poor is facing.


Despite an increase of $300 million in this year's budget, Maryland's Medicaid program is facing a $219 million deficit. The state estimates that by the end of fiscal year 1993 the shortfall will be $353 million.

Schaefer said his staff members questioned his decision to hold a news conference when he had no solution to the projected $219 million deficit. But Schaefer said he did have an answer -- go to Washington.


"We have to make some tough decisions," he said. "I don't think [Washington politicians] understand the urgency for a health plan."

Sabatini said reforms on the federal level are needed now in order to keep Medicaid from going bankrupt. The program is financed jointly by state and federal funds, but the state must provide certain services in order to qualify for federal money. The recession and large increases in medical costs have overwhelmed the program.

"The cost has just literally gone put of control," Sabatini said. "Everytime we add a thousand names to the rolls it increases the cost of the program by $1.7 million."

The number of people enrolled in Medicaid programs here was fairly stable between 1985 and 1990 at about 345,000, Sabatini said. But, by the end of 1990, as the recession took hold, enrollment began to increase precipitously.

In October alone, more than 6,000 people enrolled in Medicaid, Sabatini said. The state is projecting an enrollment of 475,000 people by fiscal year 1993, which begins next July 1.

Already, one in 10 Marylanders is enrolled in Medicaid. In Baltimore, 25 percent of the population gets Medicaid services.

Sabatini said that, while he was was not announcing cuts in health programs, the state wanted to illustrate what the result would be if it were allowed to cut optional services such as nursing home care, the pharmacy-assistance program, or the kidney-care program.

"If we did all these things and cut these things completely, I would still be $85 million short," Sabatini said.


Schaefer said he would not cut the nursing home care program for a number of reasons, not the least of which is that the program provides 10,000 jobs. But the governor said he still must balance the budget by Dec. 30, and he has very few places to look for money.

"It isn't a question of whether we'll [balance the budget]," Schaefer said. "We'll do it. We will. A lot of people that can be hurt will be hurt."

The governor said he does not know in what areas he might ask the legislature to allow him to cut. However, he said there are some things currently under consideration that will go into effect relatively soon.

For the state to continue its health-care programs, Sabatini said, it needs relief from the federal government. The health secretary said he would like to see more flexibility in the areas of non-emergency transportation usage, and in seeking out the lowest-cost hospital in certain cases.

Schaefer said he does not see any relief coming from the federal government in time to help the state with its woes. But the cuts have to come from somewhere.

"I'm looking everywhere," Schaefer said.