Cutting Medicaid Funds Is Short-Sighted Move

Posted July 11, 2005 at 2:00pm

Late in April, Congress passed a federal budget blueprint for fiscal 2006 that includes a $10 billion cut in federal funding for Medicaid. The Bush administration then stepped in and established a “Medicaid Commission” charged with identifying policy changes that would produce a spending cut of that magnitude. Even though it is the responsibility of Congress, not the White House, to modify the Medicaid program, the administration refused to give Members of Congress a vote on this commission.

While the Bush administration does some things well, advancing the interests of the nation’s most vulnerable is not among them. An administration that would champion $2 trillion in tax cuts disproportionately benefiting billionaires, and at the same time recommend cuts in unemployment insurance for low income families, heating assistance for low income elderly, food stamps for low income children and adults, and economic aid for distressed communities is not an administration to turn to for advice on the nation’s insurer of last resort. After all, this is the same administration that tried to place a hard cap on Medicaid spending even if that left elderly Americans and children without any source of care.

Medicaid is a federal/state partnership that covers more than two-thirds of the nursing home care in this country. It provides health insurance to 25 million children, eight million disabled Americans, and five million seniors. Only those who live at or near the poverty line are eligible. Draining federal dollars from this already struggling program is both short-sighted and contrary to our nation’s values.

Medicaid serves individuals in critical need. In Ohio, for example, only those seniors with incomes equal to or less than 64 percent of the poverty limit (about $5,950 per year) are eligible for Medicaid nursing home care.

Medicaid is expensive because our demographics are shifting, private insurance is eroding, and health care itself is expensive. The first two phenomena inflate enrollment, the third inflates per enrollee spending. Under-funding Medicaid doesn’t stem any of these forces.

And the fact is, Medicaid is a more efficient insurance carrier than private health plans. It’s even more efficient than Medicare. Per capita Medicaid costs have historically grown about 4.5 percent a year. Medicare costs have grown at about 7.1 percent and premiums for private employer-sponsored premiums have grown at 12.6 percent.

There are ways of bringing down U.S. health care costs, including the costs of services provided by Medicaid. We can get tough with the pharmaceutical industry. We can reduce overpriced and unnecessary treatments by investing in performance measurement and cost effectiveness research. We can ensure that there are good long-term care insurance policies available and do more to encourage retirement savings. We can work to reduce medical errors and craft responsible medical malpractice reform. Private and public insurance alike can do a better job using case management to improve health care efficiency.

But taking health care and long-term care away from people who need it is immoral and counterproductive. When low-income children can’t get needed health care they end up in hospital emergency rooms, or in hospital beds.

When seniors can’t get needed long-term care — when they can’t get good quality nursing home or community-based care — the tangible costs to families and the intangible costs to this nation’s integrity simply can’t be calculated.

Americans come to the aid of people in need. Our values and strength as a nation are grounded in that core principle. The Medicaid program is a lifeline for children and adults who have nowhere else to turn, and it is incumbent upon both the federal and state governments to ensure its continued financial viability.

Rep. Sherrod Brown (D-Ohio) is the ranking member on the Energy and Commerce subcommittee on health.