The state of Hawai'i said it will switch 7,500 noncitizens, many from Pacific Island nations, from Medicaid programs to one it is creating to provide basic medical care.

The state said the switch on Sept. 1 will free up about $15 million annually that will be used to expand prescription drug coverage for Medicaid clients.

The savings will come by changing from comprehensive care that's available to the 7,500 clients through Medicaid to a plan that's more limited in scope.

"Because of Hawai'i's unprecedented budget shortfall as a result of the global economic downturn, the state can no longer afford to provide free and comprehensive health care benefits for adult noncitizens, unless we receive a substantial funding boost from the federal government," said Lillian Koller, state Department of Human Services director.

Currently, the state provides services to this group of people through its Quest programs, which provide a wide range of Medicaid-supported health services and coverage for clients.

Typically, the state gets reimbursed for Medicaid payments it makes for care of U.S. citizens and only recovers a low percentage of care provided for certain noncitizens.

To lower its outlays for this latter group, the state created a new program, Basic Health Hawai'i, which will serve people who legally reside here but aren't eligible for federally supported care.

Many of these people are from nations that are parties to the Compacts of Free Association, or former U.S. Trust Territories that include the Federated States of Micronesia, the Republic of the Marshall Islands and the Republic of Palau.

Under the compact, residents from these countries may travel, reside and work here without time limits.

The state said federal funds are restricted from services for these noncitizens, including funds that would support their care through Medicaid. Instead the state has to shell out money to cover this care, with only the prospect of recovering a small portion.

DHS said it was having to cover this $90 million annually, though it does receive reimbursement of between $10 million and $11 million.

It came up with the Basic Health Hawai'i program to help deal with budget shortfalls while still providing some benefits. This includes 12 doctor visits, 10 hospital days, six mental health visits, three procedures, and emergency and dental care on an annual basis.

The department said this program should cover much of the noncitizens' care needs. But for some people with chronic conditions requiring frequent doctor visits, the program will be a cut in benefits.

The comprehensive services through Quest don't limit doctor visits and include eye exams, prosthetic devices, respiratory care, medical equipment, nursing facilities and other services.

"I am pleased that despite the state's deepening budget shortfall and the huge funding gap in the amount of federal money Hawai'i receives to help people from Pacific island nations, we have found a way to provide them with a basic coverage package," Koller said.

The state said some of the affected adults don't currently get comprehensive services and only obtain basic coverage through two of the Medicaid programs, Quest-ACE and Quest-Net, that it offers.

Money being saved will be used to increase the amount of medications offered through Quest-ACE and Quest-Net from the antibiotics and contraceptives that are available now.

The new Basic Health Hawai'i plan won't affect noncitizen, low-income pregnant women and children; they will continue to receive care under comprehensive Medicaid insurance.