Sebelius: Medicaid costs can be reduced

WASHINGTON, Feb. 4 (UPI) -- The Obama administration's healthcare law will increase Medicaid rolls, further increasing financial pressures on U.S. states, some officials said.

But in a letter to governors Thursday, Health and Human Services Secretary Kathleen Sebelius said states could reduce Medicaid expenses by carefully reducing the use of optional benefits and cutting fraud, The New York Times reported Friday.

"I have heard the urgency of your state budget concerns," Sebelius said in her letter.

However, the administration declined to say it would allow states to adopt stricter eligibility standards that would remove low-income people from the Medicaid insurance rolls.

Sebelius said 1 percent of Medicaid beneficiaries account for 25 percent of all expenditures and that just 5 percent account for more than half of Medicaid spending.

She said states could save money by reducing premature births and unnecessary Caesarean sections and by reducing hospital admissions.

Reducing "optional" services struck a raw nerve in some groups.

"'Optional services' is a misnomer," said Peter W. Thomas, an attorney for the advocacy group Consortium for Citizens with Disabilities. "These items and services, which include artificial limbs, wheelchairs and kidney dialysis, are life-saving and life-sustaining. They improve functional abilities and the quality of life for millions of people."