Federal Issues
The Federal Budget and a Medicaid Block-Grant Proposal
In 2003, Care for the Homeless worked with health care advocates around
the country to voice opposition to the Bush Administration’s
proposal to turn portions of Medicaid funding into block grants. The
President’s plan would provide states with set amounts of money
for Medicaid, and the funding would remain stable even if the number
of beneficiaries increased. It would also allow states to duck federal
standards and make up their own rules. The National Governor’s
Association (NGA) formed a bipartisan task force to create an alternative
Medicaid reform proposal. House Republicans were poised to write legislation
based on the NGA’s recommendation. The NGA failed to come to
agreement, however, despite intense pressure from the Bush Administration.
Without an NGA proposal, Medicaid block-grant legislation is far less
likely in 2004.
Legislation is even less likely because 48 Senators, including
Hillary Clinton and Charles Schumer, signed a letter to President
Bush promising to fight any proposal to cap Medicaid funding. Should
Medicaid block-grant legislation begin to emerge in 2004, it would
likely be stopped in the Senate, where only 41 Senators can prevent
a bill from passing.
Still, the block-grant discussion has reemerged this year, but
in a very different form. President Bush’s fiscal year 2005
budget request included Medicaid block-grant rhetoric but without
a specific legislative proposal. All signs indicate that the Bush
Administration is moving forward with its plans to bypass Congress
and turn Medicaid funding into block grants through state governments
themselves. In mid-February 2004, Governor Benson (R-NH) asked Health
and Human Services Secretary Tommy Thompson to make New Hampshire
the first state to block grant its Medicaid program in exchange
for some $55 million in federal Medicaid funds. Presumably, the
Administration would do this by approving a Section 1115 waiver
that would establish a global cap on federal Medicaid funding for
the state. It is unclear what else the waiver would allow New Hampshire
to do with its Medicaid program.
Unfortunately, it’s unlikely that New Hampshire will be the
last state to do this. There are rumors that other states, such
as California and Florida, may be seeking waivers to “reform
Medicaid” in their states as well. What is clear is that the
fight against capped funding for Medicaid is not over. Care for
the Homeless is committed to working toward the defeat of any Medicaid
block-grant proposal.
Federal Medical Assistance Percentage (FMAP)
In 2003, both the House and Senate’s final tax bill included
increased monies for state Medicaid programs. This bill provided
$20 billion for state fiscal relief; of that amount, $10 billion
was for a temporary increase in the Federal Medical Assistance Percentage
(FMAP), the share of Medicaid paid by the federal government. The
increased FMAP funds provide much needed relief to state budgets
and thus minimize the need for Medicaid cuts. These funds were available
for the last three months of 2003 and for the fiscal year 2004.
Although this was agreed to be a temporary increase, the economy
has not improved in such a way to relieve states from their fiscal
crises and continued assistance from the federal government will
keep states from implementing drastic cuts in Medicaid. Therefore,
Care for the Homeless will continue to support work to secure an
extended FMAP increase for New York State.
Federal Medicare Legislation
During the fall of 2003, we saw federal legislation to address the
fact that Medicare, the health insurance program for Americans aged
65 years and older, did not include prescription drug coverage.
Because the financial burden for this lack of coverage has disproportionately
fallen upon low-income seniors, Care for the Homeless supports the
addition of prescription drug benefits to Medicare. Good prescription
drug coverage from Medicare would strengthen the Medicare program
and go a long way toward easing the financial strain on other public
health insurance programs, including Medicaid.
Unfortunately, the legislation enacted last fall does not fully
address the urgent need of elderly Americans for appropriate medications
at an affordable price. In fact, this bill will actually do more
harm than good for many Medicare beneficiaries, especially for those
who are dually eligible for Medicaid and Medicare and reside in
states with relatively generous Medicaid prescription drug benefits,
like New York.
Given these harmful effects, Care for the Homeless worked with
health care advocates around the country to voice opposition to
the Bush Administration’s proposal to reform Medicare. Although
the legislation passed, the good news is that Senator Schumer heard
our pleas and voted, with Senator Clinton, against the federal Medicare
prescription bill. Senator Schumer’s office reached out to
Care for the Homeless, thanking us for providing him with information
about how this bill will actually affect New Yorkers.
Public commitment to the preservation of New York’s
health care programs is very important. Call Doug Berman for information
on how you can support health care advocates in their fight to protect
our health care system.
Doug Berman
Health Policy Coordinator
(212) 366-4459
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