Cutting Medicaid without subsidies in place could be deadly

A few years ago, I had a patient on Medicaid with a life-threatening seizure condition who needed medication to keep it in check.

One Saturday, she went to the pharmacy to refill her prescription and learned that her Medicaid benefits had been cut. The Medicaid office had made an error that left her without insurance coverage, and there was no way to fix the error because the office was closed for the weekend.

Despite the life-threatening consequences of not taking the medication, she went without because she had no means to pay for the refill. Later that weekend, she was admitted to the emergency room with seizures. By Monday, she had died.

For people in poverty, the difference between stable health and a medical crisis can be as slight as a day or a dollar, and the consequences of the cut can be catastrophic.

On March 1, as a cost-saving measure, Medicaid benefits will be cut for a group of more than 7,700 Hawaii residents. The group will be transferred onto insurance plans through the federally subsidized Hawaii Health Connector — plans with copays for medications and other medical care that are so beyond what a low-income person can afford that they will effectively be uninsured.

Additionally, many will suffer from interruptions in their care from having to switch doctors. As a result of these changes, many will suffer serious consequences to their health. Some will die.

It does not have to be this way. If done correctly, the state could save about $20 million while still ensuring that those terminated from Medicaid have access to necessary medical care.

For this particular group of lawfully present immigrants, the state under Medicaid currently pays 100 percent of the costs of the program, which ensures that low-income people have access to medically necessary care at no cost.

By transferring them to a Connector plan, much of the state’s cost will shift to the federal government, which provides significant insurance subsidies for people near the poverty line.

However, even with those subsidies, an individual will still have to pay up to $2,250 in copays and co-insurance in a single year — an impossible amount for someone working 40 hours a week at minimum wage and earning only $1,343 a month. At these income levels, seemingly insignificant copays can prevent people from getting the medications and treatment they need.

More than 40 years of research on the effects of copays on low-income people has consistently shown that requiring copays — even copays one-tenth of those proposed — leads to a reduction in care and correlates with a risk of increased poor health outcomes, including death.

To ensure people have access to medically necessary care, the state must adopt its own supplemental subsidy program, which would pay the out-of-pocket costs of those switched to a Connector plan so they would be in essentially the same situation they were while on Medicaid. Combined with the cost savings of removing the group from Medicaid, the state would have a net savings of about $20 million while preserving people’s lives and health.

The current administration inherited this plan to terminate Medicaid, and has been working hard to fix the plan’s many problems within the short time frame the previous administration set for implementation. However, time is running out; the cutoff date for Medicaid is just days away.

If you want to help save lives, it has never been easier. Contact your legislators and the Governor’s Office and tell them to delay the Medicaid cuts until a subsidy program is in place.

David Derauf, M.D., M.P.H, is the executive director of Kokua Kalihi Valley, a health clinic in Kalihi.