Democrats, Advocacy Groups Campaign Against Medicaid Block Grants

In the continuing Democratic assault on the House GOP’s 2012 budget bill, a group of senators today warned of dire consequences on the plan to transform Medicaid into a block grant program.

Medicaid, the state-federal health program that covers 50 million poor and disabled, currently guarantees coverage to anyone who meets eligibility requirements. A block grant would instead provide states with annual lump sums, which would allow states to run the program as they wanted, but states would also be responsible for covering costs beyond the federal allotment.

Sen. Al Franken, D-Minn., was quick to point out that one major component of Medicaid was its long-term care coverage. “Basically, get a room ready,” he warned, “because if states don’t have the funds, if counties don’t have the funds, there are going to be a lot of seniors that are going to be moving back in with their children.”  Medicaid covers nearly 1.3 million seniors in long-term care facilities.

Franken was one of several senators at the press conference hosted by Sen. Jay Rockefeller, D-W.V., Jeff Bingaman, N.M., Richard Blumenthal, Conn., Ron Wyden and Jeff Merkley, both from Oregon and Bernie Sanders, I-Vt., as well as Ilene Lieberman of the National Association of Counties. NACo is one of more than 140 organizations which signed a letter to individual members of Congress that says “We urge you to oppose proposals that arbitrarily cut Medicaid and shift a fiscal burden to the states.”

Rockefeller offered his own gloomy prognosis: “If you turn Medicaid into a block grant, and you force it on the counties or in some cases the states, they are going to do what they have to do and they are going to raise property taxes,” he said.

The GOP 2012 budget passed the House on a party-line vote, 235-193, on April 15th. The changes to Medicaid are an important part of the budget’s ambitious deficit reduction goals.

Brian Blase, a policy analyst for the Heritage Foundation, a conservative think tank, says that Medicaid costs crowd out a lot of states’ flexibility in determining how to spend state money.

“It’s common sense,” he said. “If you reform Medicaid to remove the incentive to overspend, it could actually reduce taxes.” In a paper to be published next week, Blase found that between 1989-2009, “Medicaid spending [went] up four times faster than elementary and secondary education,” he said, adding: “If block grants are passed it will discourage states from growing inefficiently large programs.”

The budget with the block grant proposal is not expected to pass the Democratic-controlled Senate.

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