By David McGrath Schwartz (contact)

Fri, Feb 8, 2008 (2 a.m.)

Nevada’s health care programs for the poor and elderly are getting squeezed as the federal and state governments cut tens of millions in funding even as a slipping state economy has more Nevadans applying for benefits.

All this is leading to a potential shortfall next year upward of $60 million. The money will have to come from an already cash-strapped state government, or the state will be forced to reduce benefits to some of the neediest of its citizens.

For children and families dependent on health care through the government, “this is a very scary time,” said Karen Taycher, executive director of Nevada Parents Encouraging Parents, a statewide advocacy group for children with disabilities. “Service providers are saying benefits are being cut or may be cut.”

Through December, there were 3.2 percent more cases than the state had expected. Mike Willden, director of the Nevada Health and Human Services Department, attributed that to the poor economy.

That could turn into $120 million in costs above the department’s already trimmed budget, roughly half of which would have to come from the state’s general fund.

The state’s Medicaid program and Nevada Check Up, which covers uninsured poor children who don’t qualify for Medicaid or private insurance, already has cut $42.4 million because of the state budget crunch.

Exacerbating that situation is the federal government’s planned cut of $19.7 million in funding for Nevada starting in October.

The latest hit came this week, when President Bush released his proposed $3.1 trillion budget, which includes $196 billion in savings to Medicare and Medicaid programs over the next five years, according to the Associated Press.

The effect on Nevada is still being determined, Willden said.

But this much is known: Under the president’s proposal, Nevada’s hospitals would get $394 million less over five years, according to the American Hospital Association.

“You can’t expect cuts that deep without impacts,” said Rick Plummer, a spokesman for the county-owned University Medical Center. “This will severely impact the ability of hospitals to provide for Medicaid and Medicare patients.”

Also under the president’s budget, Nevada would get $8.2 million less to pay for administrative work. Among other consequences, that would force the department to look at reducing efforts to fight Medicaid fraud and overpayments, said Chuck Duarte, the program’s director.

“What this will do, unless we replace it with general funds, is reduce our ability to ensure the program is operating correctly, with fiscal integrity,” Duarte said. “We can’t keep doing more with less.”

At the same time, more people are applying for help with health care, a result of the slowing economy, Willden said.

“We’re scrambling,” Willden said. “We’ve gone to every reserve fund we had. We’re bone dry in this department.”

In order to deal with cuts already imposed, the department has capped the number of poor children eligible for health insurance, held positions vacant and reduced increases in payments to doctors accepting Medicaid.

“We’re still paying doctors on 2002 levels,” Willden said. With the stagnant payouts, some doctors have opted not to accept Medicaid or Medicare patients, he added.

Congressional Democrats have vowed to eliminate the cuts to Medicaid and Medicare payments.

“This throws a tremendous burden on state and local governments,” said Senate Majority Leader Harry Reid of Nevada. “They’re already in trouble.”

But even without additional cuts from the federal government, the state health care fund is in trouble. And the state is in a poor position to help. Gov. Jim Gibbons’ budget office is projecting $541 million less in overall revenue than was expected between now and 2009.

“That’s the ugly situation we’re monitoring every day,” Willden said. “Quite frankly, Congress isn’t helping. We’re getting squeezed from all sides.”

Taycher pointed to Nevada’s poor ratings on many social service standards.

“I don’t know how much lower we can go,” she said.