Bad Medicine? Balancing the Budget by Cutting Health Services for Low-Income Families, Elderly, and Individuals with Severe Disabilities

February 18, 2005

Maryland has a long-term revenue shortfall. One-time revenues reduce the FY 2006 shortfall to $311 million. However, the state projects that this shortfall will swell to $1.5 billion within two years.

Without new revenues, policymakers have one choice for balancing the budget: cutting services.

Medicaid represents $1 out of every $6 of state General Fund spending, and its costs are growing faster than revenues. Its size and growth may make it a target for spending cuts.

Is Maryland's Medicaid program too big? Is it growing out of control? Is it a good target for cuts?

Compared to other states, Maryland's Medicaid program is relatively lean. It provides health services to relatively fewer residents and has been growing at a slower rate than the national average.

And by far, most of Medicaid costs (78 percent) provide health services for low-income Marylanders who are aged or have severe disabilities--meaning that cutting spending here is cutting health services for Marylanders with the greatest health needs.

Medicaid cuts also impact those of us who aren't poor and don't have disabilities. The resulting loss of federal health funds costs thousands of Maryland jobs, and "uncompensated care" to those who don't have health insurance drives up health insurance costs for the rest of us.

This Maryland Policy Report explains the current status of Maryland's Medicaid program, and discusses the potential consequences of balancing the budget by cutting health services. MBTPI

Related Reports:

Bad Medicine? Balancing the Budget by Cutting Medicaid
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Cuts That Hurt