Introduction
The elderly and disabled account for 70 percent of Medicaid expenses, although most recipients are children and low-income parents. Facing swelling costs and dwindling revenues, some states are cutting Medicaid eligibility, benefits or payment rates. (PhotoDisc)
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Rising medical costs and declining tax revenues in recent years have forced many states to make deep cuts in services provided by Medicaid, the health care program for the poor. Both state and federal officials want to lower the program's spiraling costs — largely from prescription drugs and long-term care — but there is widespread disagreement about what changes are needed. Republicans say Medicaid — the nation's largest health insurance program — needs a radical overhaul. Instead of an unlimited entitlement program, they want to convert at least part of the program into a capped grant, which would give states more freedom from federal rules. Democrats say caps would be inequitable because they would lead to deeper cuts in tough economic times. Both liberals and conservatives agree, however, that the current growth of the program must be addressed.
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