Gov. Bill Haslam received a TennCare budget Friday that cuts spending by $165 million — reductions that would actually reach $400 million with the loss of federal matching dollars.

The proposed budget eliminates grants to safety net hospitals, ends funding for programs for babies born with health problems, halts coverage of hospice services and limits in-home assistance for the elderly to those poor enough to qualify for Supplemental Security Income. Doctors and other health providers would get hit with a 4 percent reimbursement reduction. Other cuts include funding for medicines and mental health services.

“That’s an example of total short-sightedness, just cutting with a knife and not worrying about the patients,” said Walter Davis, executive director of the Tennessee Health Care Campaign. “You look at the individual items and you are looking at the removal of services for people who need them the most. With perinatal care, how can we not worry about having well babies and giving whatever resources we need to that?”

Some of the programs and grants on the chopping block, such as the perinatal grant program, have been there before at this stage in the budgeting process but avoided elimination once a final budget was approved by the legislature and governor.