March 12, 2003
WASHINGTON - The National Health Law Program (NHeLP) opposes the Administrations proposal to dismantle the Medicaid program and offer states block grants instead of meaningful fiscal relief. For over thirty years, NHeLP has worked to increase and improve access to quality health care for America's working and unemployed poor, women and children, minorities, immigrants, the elderly and people with disabilities.
Virtually every state is considering painful cuts to Medicaid eligibility and/or services. In this environment, the Administrations proposal resembles a high interest paycheck loan -- states that accept desperately needed additional federal funding now are required to promise repayment over a very short period of time with future Medicaid dollars they will almost certainly need even more at the time of repayment. Should states current fiscal woes prove to be persistent or recurring, states opting for this quick fix could, like the desperate low-wage worker borrowing against his paycheck, find themselves in even more dire straits when payment comes due. This is especially true in light of the fact that the decreased federal funding will coincide almost exactly with the rising population of aging baby boomers for whom increased healthcare costs can be assured. In contrast, Congressional proposals for fiscal relief offer a minimum of $10 billion in immediate assistance without exorbitant repayment provisions.
In addition, the states must accept a capped federal allotment, i.e., a block grant, for their Medicaid programs. One of the major problems with this is that it precludes Medicaid from responding to the ebbs and flows of the economy and health care costs. Medicaid is a counter-cyclical program as the economy weakens and people lose jobs, they can turn to Medicaid. With a capped allotment, a state will not receive additional money as it enrolls more individuals. Thus, just when the stresses on Medicaid are greatest, states will have less money to spend per enrollee.
Further, the Administrations proposal would disburse federal dollars with virtually no accountability. States would have unfettered discretion to determine enrollees co-pays, deductibles and premiums. This marks a dramatic departure from current law, which prohibits cost-sharing for children in the Medicaid program, limits co-payments to amounts that poor recipients can afford, and limits cost-sharing for families and children in SCHIP. Without any of these limitations, the proposal would allow coverage to be priced above the means of low-income individuals, thereby creating the illusion of decreased demand.
The block grant also destroys Medicaids role as an entitlement program. It is this entitlement that makes Medicaid insurance; that guarantees that coverage will be there when it is needed. Couched as flexibility, the Administrations proposal would destroy even this limited security for the poor. Moreover, there is no evidence that flexibility, which has been greatly enhanced over recent years through the 1115 waiver process, will contain Medicaid expenditures, which have continued to increase in the face of those ever more flexible waivers. Rather, other factors, largely beyond state control, are at the root of the spending increases the aging of the population, health care price inflation, and increases in the number of people who are unemployed or have disabilities.
Now is not the time to scale back the federal governments share of Medicaid funding nor to experiment with a program that is working. Medicaid is a true success it has risen in cost much less than many private insurance plans while offering comprehensive coverage, and a modicum of peace of mind, to millions upon millions of poor Americans.
March 12, 2003
WASHINGTON - The National Health Law Program (NHeLP) opposes the Administrations proposal to dismantle the Medicaid program and offer states block grants instead of meaningful fiscal relief. For over thirty years, NHeLP has worked to increase and improve access to quality health care for America's working and unemployed poor, women and children, minorities, immigrants, the elderly and people with disabilities.
Virtually every state is considering painful cuts to Medicaid eligibility and/or services. In this environment, the Administrations proposal resembles a high interest paycheck loan -- states that accept desperately needed additional federal funding now are required to promise repayment over a very short period of time with future Medicaid dollars they will almost certainly need even more at the time of repayment. Should states current fiscal woes prove to be persistent or recurring, states opting for this quick fix could, like the desperate low-wage worker borrowing against his paycheck, find themselves in even more dire straits when payment comes due. This is especially true in light of the fact that the decreased federal funding will coincide almost exactly with the rising population of aging baby boomers for whom increased healthcare costs can be assured. In contrast, Congressional proposals for fiscal relief offer a minimum of $10 billion in immediate assistance without exorbitant repayment provisions.
In addition, the states must accept a capped federal allotment, i.e., a block grant, for their Medicaid programs. One of the major problems with this is that it precludes Medicaid from responding to the ebbs and flows of the economy and health care costs. Medicaid is a counter-cyclical program as the economy weakens and people lose jobs, they can turn to Medicaid. With a capped allotment, a state will not receive additional money as it enrolls more individuals. Thus, just when the stresses on Medicaid are greatest, states will have less money to spend per enrollee.
Further, the Administrations proposal would disburse federal dollars with virtually no accountability. States would have unfettered discretion to determine enrollees co-pays, deductibles and premiums. This marks a dramatic departure from current law, which prohibits cost-sharing for children in the Medicaid program, limits co-payments to amounts that poor recipients can afford, and limits cost-sharing for families and children in SCHIP. Without any of these limitations, the proposal would allow coverage to be priced above the means of low-income individuals, thereby creating the illusion of decreased demand.
The block grant also destroys Medicaids role as an entitlement program. It is this entitlement that makes Medicaid insurance; that guarantees that coverage will be there when it is needed. Couched as flexibility, the Administrations proposal would destroy even this limited security for the poor. Moreover, there is no evidence that flexibility, which has been greatly enhanced over recent years through the 1115 waiver process, will contain Medicaid expenditures, which have continued to increase in the face of those ever more flexible waivers. Rather, other factors, largely beyond state control, are at the root of the spending increases the aging of the population, health care price inflation, and increases in the number of people who are unemployed or have disabilities.
Now is not the time to scale back the federal governments share of Medicaid funding nor to experiment with a program that is working. Medicaid is a true success it has risen in cost much less than many private insurance plans while offering comprehensive coverage, and a modicum of peace of mind, to millions upon millions of poor Americans.