The recession-fueled state budget crisis has turned Medicaid into the next battleground in the ongoing war over President Obama’s signature health care reform law.
The president on Monday rejected a plan promoted by conservative Republican governors including Haley Barbour of Mississippi and Scott Walker of Wisconsin to turn Medicaid, the joint federal-state program that provides health care for the poor, into a block grant program. Such a transformation would allow states to reduce benefits and exclude all but the most destitute from coverage.
The president rejected that proposal during a closed-door session with governors attending the National Governors Association annual meeting in Washington. “The president didn’t think it was necessarily the best path,” a senior administration official who attended the session told reporters.
During his public address to the governors, Obama said he believes “the concept of shared sacrifice should prevail,” and “If all the pain is borne by only one group — whether it is workers, or seniors or the poor — while the wealthiest among us get to keep or get more tax breaks, we’re not doing the right thing.”
Medicaid provides primary health insurance coverage to 58 million low-income Americans, mostly women and children, and sets basic levels of coverage in every state. The federal government currently pays for 57 percent of the Medicaid program, which cost $387 billion in 2009, according to the Kaiser Commission on Medicaid and the Uninsured.
Turning federal Medicaid support into a block grant without national standards would run counter to the intent of Obama’s Affordable Care Act, which relies on an expanded Medicaid program to cover about half the uninsured who obtain coverage under the health care reform law. The ACA also sets a fairly high standard for minimum coverage under the law. The federal government will pay for about 90 percent of the additional costs that come from adding about 16 million uninsured Americans to the Medicaid roles after health care reform goes into effect in 2015.
Cash-strapped states have seen their Medicaid roles swell by six million people since the recession began in late 2007. One-time federal support from the February 2009 stimulus act helped states meet those additional obligations in the past two years, but now those funds are drying up. States are increasingly looking for ways to limit the program in order to balance their budgets, which is required by almost every state constitution.