It was a Monday in late July and Mary Foster was almost out of medicine.

Because of new state Medicaid cutbacks that took effect on July 1, the 62-year-old Missouri woman wasn’t sure how she would get the $600 worth of prescription pills and insulin she takes monthly to combat Diabetes and High Blood Pressure.

Foster stopped work a few years ago to adopt her drug-addicted son’s two toddlers and the three of them now live on about $1,100 a month with no private insurance.

So as the two children played at her feet, Foster called social workers and hospitals, searching for low-cost access to the medicine she needs. Someone suggested she ask a pharmaceutical company for free samples. That might get her through another month, she was told.

“I’ve got these children to raise and I don’t know what I’m going to do,” Foster said, starting to cry. “There isn’t much anywhere to turn to.”

Welcome to the world of Medicaid reform.

Faced with rising health care costs, greater numbers of poor, elderly and uninsured people, and a reluctance to raise taxes, state governments around the nation are working to cut billions of dollars from their Medicaid budgets.

From California to Florida, state leaders say reining in Medicaid, a 40-year-old joint federal and state program that serves millions of poor Americans, including children and the disabled, is imperative if states are going to meet education, infrastructure and other needs.

Many states are seeing Medicaid costs grow more than 10 percent a year, according to the National Governors Association chairman Mike Huckabee, who is also governor of Arkansas. In his state, the Medicaid budget ballooned to $3.5 billion from $600 million over the last nine years.

“Medicaid is growing at an unsustainable rate. It’s a train wreck waiting to happen,” Huckabee said.

But as states make the cuts, the actions are roiling communities nationwide and spurring a debate over how high the cost of compassion should go.

“We are talking about the most vulnerable people in the nation and a declining willingness… to provide basic support for those populations,” said Henry Aaron, of the Brookings Institute, a public policy thinktank.

“People are going to undergo financial hardships,” he said. “Some will be in pain. Some will die.”

NO COVERAGE FOR CRUTCHES

The Bush administration is a key proponent of a scaled-down Medicaid system and has set up a 28-member panel to find ways to trim the program by $10 billion over the next five years. The panel’s first meeting was on July 27. Their first report is due Sept. 1.

Also this summer, the National Governors Association asked Congress to give states greater flexibility to manage Medicaid costs through cost-sharing and other arrangements aimed at discouraging misuse of the system, and hopefully avoiding big cuts in services.

Among the states seeking sweeping structural changes along with Missouri are Florida, Georgia and South Carolina.

“We want to make some reforms… so everybody has some sense of ownership and management of their medical expenses,” said the NGA’s Huckabee.

Missouri’s cuts are considered by many policy experts to be among the most severe in the nation. The cuts took effect July 1, and are aimed at saving some $230 million for the state, which typically spends about $2 billion on Medicaid annually.

Disabled individuals are losing coverage for crutches, walkers and batteries for their wheelchairs. Occupational, speech and physical therapy are eliminated. Hearing aids and glasses are no longer covered. Under the new standards, a single mother of two children is ineligible for medical benefits if she makes more than $350 a month.

In Tennessee, the state’s is trying to cut benefits for up to 290,000 enrollees. Angry Medicaid recipients have spent weeks camping outside the governor’s office, some tethered to breathing machines and wheelchairs.

And Pennsylvania legislators last month generated outrage when they cut Medicaid services for children with autism, cerebral palsy and other disabilities as part of a $240 million reduction in Medicaid spending.

“Benefits are being stripped away from state to state,” said Marc Cohan, director of litigation for the Welfare Law Center in New York, which has sued several states over Medicaid changes. “It is a very serious problem.”

SIGN OF THE TIMES

The changes come despite indications that a majority of Americans oppose budget cuts to Medicaid, which served 53 million people with a total of $329 billion in combined state and federal spending in fiscal 2005, according to federal statistics. Most Medicaid recipients have incomes below the poverty line, roughly about $16,090 for a family of three.

A national survey released in June by the Kaiser Family Foundation found that 74 percent of Americans somewhat or strongly oppose Medicaid cutbacks.

Critics of the changes say that states need to weed out fraud and find other ways to save money that don’t jeopardize the life and health of the most vulnerable people.

Kathy Horvath is one such outspoken critic. Her 6-year-old disabled son Scotty died after Tennessee’s Medicaid system declined to pay for special oxygen equipment. Horvath has told lawmakers there that Tennessee’s cutbacks will likely hurt more children.

“I know they are trying to save money,” said Horvath. “But they are putting dollar signs on children’s lives.”

Back in Missouri, Foster says she is resigned to the loss of the Medicaid coverage for her medicines.

“It’s a sign of the times. It’s just what is happening, part of living,” she sighs. “But what gets me is they spend money to build new arenas and stuff, and then they take money away from the poor people.”