Over the weekend, both the New York Times and Kaiser Health News ran stories about the dire warnings being issued from several states regarding their Medicaid programs. Facing massive budget shortfalls, governors as politically diverse as Florida’s Rick Scott and New York’s Andrew Cuomo are looking to achieve significant savings from their Medicaid programs.
However, the restrictions written into the health care law and the “stimulus” bill (which gave states temporary Medicaid relief) prevent states from reducing their eligibility requirements (i.e., cutting the budgetary coat to meet a state’s fiscal cloth) until the law takes full effect in January 2014. Arizona’s Governor has already requested a waiver from the requirements, but it’s unclear whether the federal government will approve such a request, from Arizona or any other state. If the Administration does not, some states may then face other, even more difficult, budgetary choices. The National Governors Association and Republican Governors Association have both written to the Administration objecting to these “maintenance of effort” requirements, which the RGA said would have “unconscionable” effects.
Kaiser Health News quotes two other possible “solutions” to the Medicaid dilemma, neither of which would have much appeal to most Republicans. Referring to the Medicaid program, HELP Committee Chairman Harkin suggested that “maybe the federal government should take over the whole thing.” (Remember, these are the folks arguing that the health care law is NOT a government takeover of health care.) Besides just shifting costs from the states to the federal government, such a one-size-fits-all program would stifle states’ flexibility (not to mention sovereignty) in a way that allows them to generate innovative solutions on health care – including solutions that are more market-based.
The other option floated by several Democrats – including Finance Committee Chairman Baucus, HELP Committee Chairman Harkin, and former Speaker Pelosi – would extend federal Medicaid aid first included in the “stimulus” until 2014. That however raises two important problems of its own. First, such a move would cost hundreds of billions of dollars – likely wiping out the purported deficit “savings” from the health care law. Second, if states’ Medicaid programs are in such a poor state that they require a federal bailout for over five years (the “stimulus” aid was made retroactive to late 2008, and Democrats want to extend it until 2014), why on earth should the federal government be forcing MORE individuals on states’ strapped Medicaid rolls in the years after 2014?
In a story this morning about a new Medicaid advisory commission, Politico quotes commission member Sara Rosenbaum as saying that the advisory body should “not add…one cent to the burden of the states.” It’s unfortunate that Democrats didn’t take the same tack before imposing the new and onerous unfunded mandates on state Medicaid programs included in the health care law.