The Effects of Budget Cuts on Healthcare and Education

The Effects of Budget Cuts on Healthcare and Education

The fields of healthcare and education affect almost everyone. The odds of seeking medical care at some point in time are high, and most individuals will receive some form of education. In Louisiana alone, Governor Jindal's proposed budget will cut millions of dollars from education and healthcare. Although these cuts are necessary to reduce the national budget deficit, they will have devastating financial effects on both systems. In the healthcare arena, the budget cuts will reduce Medicaid reimbursement and reduce or eliminate funding for many medical care programs. With regards to education, the cuts will reduce funding which will force schools to cut staff, eliminate classes and close federally funded education programs. Although most individuals will notice these cutbacks, the low income and elderly populations will be most negatively affected.

Medicaid is a state and federal program that pays for healthcare for the poor. One in five Americans is covered by Medicaid (Young 82). According to John Matessino, president and chief executive officer of Louisiana Hospital Association, the Medicaid program covered 83 percent of a hospital's cost to care for patients. At this rate of reimbursement, hospitals were already losing money caring for Medicaid patients. After the budget cuts, hospitals will have a difficult time providing the same services since the reimbursement rates will fall below the 1995 level. Also, every million-dollar cut will force hospitals to eliminate 70 jobs and cause a $3.3 million loss in revenue. This will force hospitals to discontinue programs that provide preventative care to the poor and possibly close clinics that provide medical treatment and medications. The reduction in medical staff will result in closing of units and possibly substandard care. Additionally, with the lower rate of reimbursement and higher costs of providing services, hospitals may be forced to close altogether. More than 100 hospitals that were surveyed reported they were operating at a loss (Griggs). In addition to Medicaid, there are also Medicare cutbacks. Medicare is a federal health insurance that covers medical costs for individuals over 65 and others with disabilities. Budget cuts would lower payments to nursing homes by $1 billion in 2009 and $17 billion for the next five years thereafter. Eliminating or reducing any increases to cover inflation would accomplish the same goal. Nursing homes would not be unable to provide quality care to their patients since the cost of medical equipment, supplies, food, etc. increases every year. Also, if they are unable to offer a competitive salary, staff will be lost to other medical facilities (Gatty 22). There are also senior programs that will have to be eliminated due to decrease in funding or reimbursement. Programs such as adult day healthcare, in-home services and