Budget deal restores some social services cuts, leaves others

The budget agreed to by Gov. Dannel P. Malloy and Democratic legislators restores funding to several health and social services programs that the governor initially proposed trimming.

But it also leaves in place other cuts that advocates have decried and relies on higher assumed Medicaid savings than the governor’s original proposal.

Out are plans to charge co-payments to Medicaid recipients, freeze enrollment in a home care program for seniors at risk of hospitalization, and trim food assistance for recent immigrants. An unpopular plan to move the Board of Education and Services for the Blind into the Department of Social Services was also withdrawn; the services will instead be moved to a Bureau of Rehabilitation Services.

Like Malloy’s original proposal, the budget agreement includes a tax on hospitals, reductions in Medicaid dental and vision benefits for adults, and plans to save money by changing the benefits offered under a Medicaid program for low-income childless adults.

Programs that will get more funding than Malloy had proposed include:

  • The Nurturing Families Network, which aims to prevent child abuse and neglect by working with first-time parents, providing home visits, parenting groups and access to assistance. It operates at 29 hospitals and at non-hospital sites in Hartford and New Haven. Malloy proposed eliminating funding for the non-hospital sites. The budget agreement would maintain their funding, adding $3.2 million each fiscal year over Malloy’s proposal.
  • Food stamps for legal noncitizens who have been in the U.S. fewer than five years. The food stamp program is federally funded, but federal law prohibits noncitizens from receiving the benefits if they have not lived in the country at least five years. Connecticut currently provides state-funded food assistance to those immigrants, giving them 75 percent of the benefits the federal food stamp program would provide. Malloy proposed cutting that to 50 percent, saving $1.15 million over two years, but the budget agreement would maintain the existing level.
  • A portion of the Connecticut Home Care Program, which provides home and community-based services to seniors who are at risk of requiring hospitalization or short-term nursing home care. Malloy proposed freezing intake for one part of the program, but under the budget agreement, it would stay open. In addition, Malloy proposed raising the required cost-sharing for seniors to 15 percent of the cost of services, up from 6 percent. The budget agreement sets the cost-sharing at 7 percent.

Before Malloy presented his budget in February, advocates for seniors had hoped to eliminate the cost-sharing in the home care program entirely. But this week, they welcomed an increase below what Malloy proposed.

“Every percent matters,” said Claudio Gualtieri, program specialist for public affairs for AARP Connecticut. “The 7 percent is a huge win.”

Sharon Langer, a senior policy fellow at Connecticut Voices for Children, was one of several advocates pleased that Medicaid cost-sharing won’t go forward. While other cuts remained in the budget, she said, it could have been worse.

“As everyone knows, this is a very difficult budget cycle,” Langer said. “The governor and the legislature are dealing with huge budget deficits for the biennium, and I think no one’s happy about reducing access to basic vision care and access to preventive dental care, but we know that it could have been much more dramatic and the cuts could have been much more severe.”

Advocates had argued that the Medicaid cost-sharing would serve as a barrier to care for low-income residents–an assessment Malloy’s budget director, Ben Barnes, said he shared the day it was proposed. At the time, he said the Medicaid cost-sharing was included because of the need to balance the budget.

The budget agreement–officially, the Appropriations Committee’s budget–includes savings to offset some of the changes, although in several areas, it assumes savings beyond what were assumed in Malloy’s budget.

“We believe that while they’re being more aggressive than we were, they’re not being unduly aggressive,” Barnes said.

The budget calls for covering tobacco cessation services in Medicaid. Malloy’s budget simply included the cost of providing the service, on the grounds that it wasn’t reasonable to expect significant offsetting savings during the next two fiscal years. But Barnes said that legislators made a compelling case that some savings should be counted, based on experience in Massachusetts after it made a similar change.

Under the budget agreement, the $6.15 million two-year cost would be paid for from the Tobacco Trust Fund. It assumes that the benefit would lead to better health outcomes and save $1 million in the 2012 fiscal year and $4.1 million in 2013. Barnes said it would not be unreasonable to expect that the cost savings would pay for the program in the third year.

The budget agreement also assumes $4.4 million per year more in savings from changing the way Medicaid is administered. Barnes said the administration’s projected savings from the change took into account cost control measures, but he said the committee believed the state could save more.

“We acceded to that,” he said. “Is it more challenging? Yes.”

The committee attributed the additional savings to reducing non-emergency use of emergency rooms. The new administrative model will include care management aimed at identifying frequent emergency room users and find ways to get them to more appropriate levels of care, according to the budget.

Barnes said legislators also agreed to authorize ways to increase the Medicaid savings, including possibly by charging copayments to people who go to emergency rooms for nonemergency reasons.

The committee also assumes $2.1 million more a year in savings from the expansion of the Money Follows the Person program, which is expected to allow more than 2,000 people to move out of nursing homes.

“This is a more realistic budget for Medicaid than we’ve seen in a while,” Barnes said. “Is it aggressive? In a few cases, yes, but I think that we are hopeful that we’ll be able to be much more responsive now than the state has been in the past with new leadership at DSS and executive level attention and interest in implementing health care reforms through Medicaid and elsewhere.”

While the additional assumed savings amount to a few million dollars, Barnes said the larger unknown in Medicaid is the economy. A slight improvement in the economy could mean fewer people in the program–or less growth than projected–and tens of millions of dollars in savings.

“In the scheme of the overall uncertainty of Medicaid costs, I think that most or all of the savings projections that we have here are reasonable and achievable,” Barnes said. “But they are going to take work. And we’re committed to that.”