Administration continues decades-old assault on Medicaid
May 24, 2005
The Bush administration is not trying to make Medicaid run well but to force its collapse. In the process, states are left to deal with the mess. And the poor and disabled are bearing the brunt.
Medicaid was crafted as one of a suite of programs that defined America as a place of opportunity, a "Great Society" where children born into poor families weren't doomed to poor health.
As an entitlement program, Medicaid has always been structured as an open-ended partnership. The feds pay an agreed upon share of each state's costs, no matter how high they go, and the states remain bound by certain rules in shaping their programs -- rules meant to protect beneficiaries.
But Bush wants Medicaid remade as a block grant, meaning the feds pay only a fixed amount each year. The White House has been pushing versions of this plan since early in the first Bush term, and governors have stood against it, realizing that they were getting stuck with the bill.
From coast to coast, state budgets are reeling under Medicaid's burgeoning costs. On average, state Medicaid budgets increased by 11 percent a year throughout the 1990s, and in some states by as much as 15 percent. As the spending has spiraled upwards, governors and legislatures have fought losing battles to control it. Almost every state has instituted some sort of cost-control restriction. This fiscal year, 43 states limited access to prescription drugs, 15 tightened eligibility and nine cut benefits.
Unable to sell governors on its block grant, the White House has instead tightened the screws.
Under administration pressure, the GOP-led Congress has passed a budget blueprint that would force $10 billion in Medicaid cuts over the next five years. The same budget would contain another $106 billion in tax cuts over that time. States are now scrambling to find ways to come up with the reductions themselves, rather than leaving it to Congress.
To achieve the sorts of Medicaid savings the congressional budget plan would force, states will have to take from those who need it most.
Medicaid's true cost driver is not its cadre of newly enrolled working poor -- largely healthy people earning incomes just above the federal poverty level and using the program to get basic care. The real money is spent on care for seniors and people with disabilities. And to make a difference, this is where governors and legislators are going to have to wield their unforgiving budget knives.
In 2000, Medicaid spent nearly $10,000 per disabled enrollee, compared to just $1,600 per adult beneficiary, on average. It is the nation's top payer for AIDS treatments, shelling out more than $4 billion a year. Overall, seniors and people with disabilities account for 71 percent of the program's costs.
These are savage cuts. And a nation committed to the greater good cannot let them stand.
Kai Wright is editor of BlackAIDS.org, and lives in New York City. He can be reached at pmproj@progressive.org.