April 30, 2007
April 30, 2007
Seniors, children likely to feel deepest impact of cuts
LANSING - Michigan Governor Jennifer M. Granholm today announced that due to the Legislature's failure to enact a comprehensive solution to the state's current budget crisis, the Michigan Department of Community Health (MDCH) is informing all state Medicaid providers of a six percent cut in provider fees, while the State Budget Office is notifying public schools that funding will be cut by up to $125 per student. Both cuts will be effective June 1.
"I proposed a comprehensive solution in February to address the budget crisis and make Michigan competitive," Granholm said. "Lawmakers have rejected my blend of budget cuts, reforms and revenue. Without their support for new revenue, they are forcing our state into an untenable position. Fewer children and seniors in Michigan will have access to health care, and the cost of that care for those of us who do have it will go up if the Senate Republicans allow this proposed cut to become a reality,"
The provider rate cut is across the board and will affect all health care providers around the state that participate in the state's Medicaid program. The cut is the largest made to Medicaid provider rates since Granholm took office in 2003 and will save the state of Michigan $49 million in general fund dollars for the current fiscal year.
Granholm said the proposed cut will be made across the program to minimize the pain it will cause to Medicaid providers, many of whom are already making sacrifices to maintain outstanding quality of care levels for the 1.6 million Medicaid recipients currently participating in the state health care program.
"I have said repeatedly that I do not want to gut school funding with just a few weeks left in the school year, and I have said repeatedly that I do not want to make deep cuts to health care that will hurt our most vulnerable citizens," Granholm said. "But, we must have a balanced budget and, therefore, I have no other option. The Legislature has failed to act on a comprehensive plan, and today we see the consequences of that failure."
"To save the necessary dollars to balance our department's budget for this year, it is urgent that we take appropriate steps to be fiscally responsible and manage our state medical program effectively," said Janet Olszewski, MDCH director. "A provider rate cut is one of the few measures the state has left at its disposal to ensure that we balance our budget. Constitutionally, we must close our Medicaid budget in the black, and it is almost unbelievable that they are forcing us to do this at the expense of health care access for our most vulnerable citizens."
According to federal law, MDCH must notify Medicaid providers 30 days in advance of any potential change to the program, which prompted the May 1 bulletin to providers.
"Budget decisions of this nature are always difficult, but making cuts to provider rates at a time when more citizens than ever rely on Medicaid should give every citizen - regardless of their income level - significant pause," Granholm said. "It is our hope that despite this difficult cut, providers will continue to deliver high quality services to our state's most vulnerable citizens."
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