Huge health deficit looms

Analysts projecting possible Md. shortfall reaching $521 million

Spending cuts considered

October 24, 2001|By Michael Dresser | Michael Dresser,SUN STAFF

The General Assembly could be facing more than a half-billion dollars in deficits in Medicaid and other health care programs when it begins its session in January, legislative analysts said yesterday.

The Department of Legislative Services told the House Appropriations Committee that the combined deficit from the current fiscal year and the budget the General Assembly will vote on next year could total $521 million. The figure combines a previously announced projection of a $184 million shortfall this year with a forecast of $337 million in additional shortfalls next year.

The two-year total includes a cumulative $31 million deficit in mental health spending.

The numbers were the bleakest yet to be presented to lawmakers as they prepare for what is shaping up as a brutal session dominated by painful budget cuts required to balance the state budget - as required by Maryland's Constitution.

Debbie I. Chang, deputy health secretary for financing, noted that the analysts' forecast is a projection of what would happen if officials take no steps to curb spending. She said the state Department of Health and Mental Hygiene is working on a series of cost-containment measures intended to reduce the shortfall.

Del. Howard P. Rawlings, a Baltimore Democrat who is Appropriations Committee chairman, said officials have their work cut out for them as they try to trim the deficits. "It's not clear whether the department has in place the cost-containment measures to address them," he said.

Legislative analysts put much of the blame for the shortfall on "spurious assumptions" used in putting together the Medicaid budget for this year. They noted that officials assumed a Medicaid enrollment of 428,000, even though the program served 440,000 at the time of the estimate. The rolls had swelled to 457,000 by September.

Chang said steps being taken by the department to control costs include increased oversight on the use of the most expensive medicines and more aggressive monitoring of lengths of hospital stays.

Department officials said they have not completed their estimates of the health care deficit. They called the legislative analysts' projections "a bit on the high side," but acknowledged that the state's shortfall will be in the hundreds of millions of dollars before cost controls are taken into account.

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