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States increasingly limit Medicaid hospital stays

USA Today reports that states are increasingly limiting hospital stays covered by Medicaid in an effort to control rising health costs for the program and balance budgets affected by the struggling economy. Some states have limited the number of hospital stays covered by Medicaid to as few at 10, causing some advocates for the poor, as well as hospital executives, to raise concerns over restricted access to care, more absorbed costs, and increased costs for patients covered under private insurance.

Medicaid, which receives funding from both state and federal governments, not only provides health care for the poor, but also funds long-term care for low-income elderly. While the trend in limiting hospital stays covered by the program may not affect elderly people whose long-term care is covered under Medicaid, it may signal a trend toward reducing services or individuals covered under the program.

Various states have taken different approaches to decreasing their Medicaid burden. Last year, Arizona stopped covering certain types of transplants for several months. It also reportedly plans to limit adult Medicaid recipients to 25 days of hospital coverage per year as soon as the end of this month. Sources said the state of Hawaii plans on limiting Medicaid coverage to 100 days per year by this coming April.

While such restrictions require federal approval before they can be implemented, it is likely they will receive approval, as there are already state that restrict hospital coverage. For hospitals, the changes may mean increasingly paying bills for indigent patients. Those covered by private insurance may also see increased costs as a result.

It isn't clear exactly how the trend will affect efforts at Medicaid planning, but at the very least it shows the increasing burden felt by states because of funding Medicare.

Source: USA Today, "More state limiting Medicaid hospital stays," Phil Galewitz, Oct 34. 2011.

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