By Martha Heberlein
As negotiations stalled on addressing the debt ceiling and ongoing budget deficits, the Senate Finance Committee held a hearing today on the long-term sustainability of Medicare and Medicaid. While much of the focus was on Medicare, Medicaid also played a prominent role, especially around proposals to block grant the program.
In response to questions on the effects of such a proposal, Governor Patrick of Massachusetts replied that it would be unsustainable for his state – that they would be forced to either “cut people, or cut benefits.” Even though they are one of only three states with a positive fiscal outlook, they couldn’t afford the loss of federal funding. The federal-state partnership has allowed MA to achieve the highest rate of coverage on record (98%) and by reneging on that partnership, the gains that have been made would likely be lost.
Senator Grassley (R-IA) expressed some concern as to how a block grant would impact those currently covered under Medicaid, especially children with disabilities. (He expressed this apprehension while also acknowledging that even under a block grant, the feds are not going to hand over billions without some strings attached. Raising the question as to what those “strings” might be.) Former Governor Fletcher from Kentucky reassured him that even with additional flexibility under a block grant, the federal government would still be able to set some parameters, such as requiring states to provide services for those with disabilities.
Personally, I’m not at all comforted by Fletcher’s assurances. With states facing massive declines in federal financial participation, the resultant cost-shift to the states would make it hard for states to maintain their current Medicaid enrollment. In fact, estimates suggest that under a block grant proposal (similar to what was passed in the House Budget), enrollment would decline by 19.4 million people. Whose coverage would be at risk? Would the “strings” not include children? People with disabilities? The elderly in long-term care facilities?
Senator Cardin (D-MD) summed it up by saying that we need to find a comprehensive approach to deal with our deficit, but one that does not jeopardize the care for the poor, elderly, and disabled. Senator Baucus (D-MT) agreed, stating that the vulnerable can’t bare the burden of deficit reduction alone. A block grant proposal would, while saving the federal government money, do just that by shifting the burden to the states and those among us that Medicaid was designed to protect.
