Show #246 Airing: Sunday, March 7, 2004
Medicaid is one of the most important safety net programs in the nation. It is the health insurance program of last resort for the poor, and it allows middle class folks to salvage a portion of their life savings in the face of escalating nursing home costs.
Social Security and Medicare, two other crucial programs, are strictly federal. Medicaid is unique because it’s a joint federal and state program. The federal government pays about 50 to 70 percent of the costs, with the states picking up the rest. Uncle Sam pays about 60 percent of Ohio’s Medicaid costs.
Increasing medical and nursing home bills, and the growing numbers of people with no health insurance, have caused Medicaid costs to skyrocket. The costs have put terrible pressure on already strained state budgets.
Regular viewers of this program know that I have been a frequent critic of Governor Taft. But today I have to tell you that our Governor and his administration have done a pretty fair job of maintaining crucial Medicaid benefits under increasingly difficult financial circumstances. Other states have begun adopting much more draconian measures to cut Medicaid coverage for needy families.
Unfortunately, I am very concerned about what the future may hold. The Bush administration is threatening to take steps which would significantly cut federal Medicaid support for the states.
Here’s how. Federal funds are given based on how much the state is spending. So many states, including Ohio, have done some creative bookkeeping to boost their expense sheets. This leveraging of state Medicaid money has enabled Ohio to obtain a higher level of funds from the federal government. I would note that, even so, Ohio is still one of those states where its citizens send a lot more tax money to Washington than we receive back.
Now Washington says it is going to put a stop to the creative bookkeeping that Ohio and other states have used to avoid severe Medicaid cuts to citizens in need.
It appears that Washington’s strategy is to put so much pressure on the states that they eventually will no longer be able to sustain even minimally critical Medicaid coverage. Eventually, the Medicaid program will implode.
Medicaid came close to breaking down at the state level last year. Only after a great deal of pressure was brought on the federal administration did it grant an extra Medicaid benefit of 20 billion dollars to the states. While 20 billion dollars is not a lot compared to our investment in reconstructing Iraq, Medicaid may have collapsed without that added money. But this year, the Bush administration is vowing not to step up to save Medicaid again.
The Bush administration is also seeking to add to the paperwork and red tape states must deal with to get their federal Medicaid funds. Under a notice published last month in the Federal Register, states would be required to submit their Medicaid budgets for federal review and approval. Again, this is designed to prevent states from leveraging their Medicaid payments through creative bookkeeping.
Why is the Bush administration seeking to create both financial pressure and procedural hassles for the states? Insiders say that the goal is to force states to accept substantial changes to the Medicaid program. The changes, ultimately, could destroy the Medicaid safety net for our poorest, sickest, and most frail citizens.
