In Sickness and in Wealth

Medicaid patients could be facing death by a thousand cuts.

The Oborsh family doesn't fit the Medicaid-recipient stereotype.

The family lives on a comfortable suburban street not far from the Southwest Plaza mall. Their home is nestled next to a creekside park; large pine trees and a wooden fence give it a bucolic air.

Inside, Paula Oborsh watches over her two children, five-year-old Alexandra and eight-year-old Nicholas. With his dark blond hair and mischievous smile, Nicholas seems like a typical boy. But he has trouble holding himself steady when he walks, and he talks like a child younger than eight.

Alex Watson receives care from a home health aide, 
paid for by Medicaid.
Anthony Camera
Alex Watson receives care from a home health aide, paid for by Medicaid.
Pediatricians such as Dr. Lee Thompson are being 
forced to turn away Medicaid patients because of 
budget cuts.
Anthony Camera
Pediatricians such as Dr. Lee Thompson are being forced to turn away Medicaid patients because of budget cuts.

Nicholas has suffered from a severe seizure disorder since he was a baby. He sleeps next to a monitor that alerts his parents if he has a seizure at night. His mother carries a cell phone with her at all times in case he has a seizure at school. And with developmental disabilities that make it harder for him to learn, Nicholas faces many obstacles to leading a normal life.

Which is why his middle-class family qualifies for Medicaid. The state and federal program normally funds health care for Colorado's poorest residents, but the Oborshes are part of a special state exemption that allows middle-income families with severely disabled children to receive Medicaid funding for home health care. Nicholas receives occupational and physical therapy, doctor visits, prescriptions -- at one time he was on eleven different medications -- and diapers, none of which would be covered by the family's regular health insurance.

"I'm scared to death where he'd go without the therapies," Paula Oborsh says. "We couldn't afford to pay for it. Financially, Medicaid has been a lifesaver for our family."

But as state legislators grapple with a budget deficit of nearly a billion dollars, care for Nicholas and other children like him could be on the chopping block. The legislature's powerful Joint Budget Committee spared them last week, but Colorado's economic situation is so dire that more cuts are likely later this year. Governor Bill Owens already agreed to cut Medicaid benefits for 3,500 legal immigrants on April 1. A week earlier, the American Civil Liberties Union had asked a federal judge for an emergency order preventing the state from cutting off immigrant aid, calling the legislation unconstitutional; however, as of April 1, Denver U.S. District Judge Robert Blackburn had not made a ruling on the request.

State senator Peggy Reeves, who serves on the JBC, says the committee may add a provision to the budget to pay for those immigrants already living in nursing homes, thus avoiding the spectacle of dumping elderly people in homeless shelters. Even so, she warns more cuts could be looming.

"A lot depends on the June revenue estimate," she says. "The war leads to uncertainty and hits the consumer, which really hurts us."

That is of little comfort to Paula Oborsh. "That they might take away this entire program is unbelievable to me," she says. "I know we're in a budget crunch, but this is not just a line item to us. Parents who can't keep their kids at home will have to institutionalize them. It will rip families apart."


Medicaid was created in 1965 to provide medical care for America's poor. Although it is often confused with Medicare, the two programs are very different. Whereas Medicare is funded entirely by the United States government, providing health care to seniors living on Social Security, Medicaid costs are split between state and federal resources. At a minimum, Congress dictates that states serve certain populations: the elderly and disabled who require nursing-home care; children living in poverty; families on welfare; and disabled people who qualify for Social Security benefits. In fact, half of Colorado's elderly living in nursing homes are covered by Medicaid, since Medicare does not cover most nursing-home expenses.

Any coverage beyond the federal minimum is up to each state. Colorado offers assistance to nine other groups comprising 30,000 individuals and covering everything from brain injuries to AIDS. For example, Nicholas Oborsh and 630 other children belong to the "Children's HCBS Waiver," which provides funds for at-home care for middle-class kids at risk of being institutionalized. Each Medicaid waiver is designed to keep patients in their homes rather than in nursing facilities.

But the more people covered, the higher the expense to the state, and for the past few years, Medicaid spending has spiked upward, thanks to soaring health-care costs and growing numbers of uninsured patients. By one estimate, nearly 1 million Coloradans have no insurance, largely because employers, weary of skyrocketing costs, are simply dropping health coverage. As a result, Medicaid spending now takes up 20 percent of the state budget -- well over $2 billion per year -- compared with 10 percent just a decade ago.

"We're adding to the uninsured and the underinsured; people more and more can't afford health care," says Lorez Meinhold of the Colorado Consumer Health Initiative. "There are huge gaps in the safety net."

The flagging economy is only making things worse: In the past two years, 48,000 people were added to the program. And because most of the 344,000 people on Medicaid in Colorado are in one of the mandatory-coverage groups, it's the optional programs - such as the one that covers Nicholas Oborsh -- that are targeted when budgets have to be cut.

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