GOP Likes Medicaid Block Grants, Liberals Warn of Less Coverage

By: David Royse, The News Service of Florida
By: David Royse, The News Service of Florida

THE CAPITAL, TALLAHASSEE, April 6, 2011 --

Florida Republicans reacted favorably Tuesday to a Congressional GOP proposal to send Medicaid money to the states in block grants, freeing them from the coverage and enrollment criteria that currently come with the matching money.

U.S. Rep. Paul Ryan, R-Wisc., chairman of the U.S. House Budget Committee on Tuesday presented a proposed health care budget that also would rely on repealing the new federal health care law, which is slated to put more people into the Medicaid system as it currently is, driving up costs.

The Republican plan would seek to keep Medicaid – which many states have complained has grown in cost to where its future is in danger – viable by converting the federal share into a lump sum payment that states could use as they wish. That would free up states to more easily take steps to revamp Medicaid as Florida lawmakers are currently considering with a broad proposal to essentially privatize most Medicaid patients’ care.

“This reform ends the misguided one-size-fits-all approach that has tied the hands of so many state governments,” the GOP’s proposal says. “States will no longer be shackled by federally determined program requirements and enrollment criteria. Instead, they will have the freedom and flexibility to tailor a Medicaid program that fits the needs of their unique populations.”

Florida Senate President Mike Haridopolos praised the idea.

“The block grant approach is exactly what we in Florida are asking for as we reform the state’s Medicaid program,” Haridopolos said in a statement. “The current program doesn’t serve patients, doctors or taxpayers well. In addition it’s rife with fraud.”

In Florida, the House has passed and the Senate is considering a massive overhaul of the Medicaid system that would put patients in private HMOs and other managed care organizations. That plan, if passed and signed by Gov. Rick Scott as expected, would need federal approval to go forward. State legislative leaders have said they’re prepared to essentially withdraw from the Medicaid system if they can’t overhaul it and run it the way they want without Washington vetoing their plans.

“I welcome Congressman Ryan’s efforts to allow states to manage their individual Medicaid programs,” Haridopolos said. “As someone on the front line of tackling declining state budgets, I urge the U.S. House and Senate to embrace Congressman Ryan’s efforts to curb out-of-control Medicaid costs. Give states the flexibility they need, allow us to clean up the fraud, and then watch us reform this broken system.”

The Congressional Budget Office suggested last year that a block grant system similar to what was proposed Tuesday could reduce by $180 billion the $4.2 trillion in additional Medicaid costs the new federal health care law is expected to cost over the next decade. Republicans said this week that the new proposal would save $1 trillion in Medicaid costs overall.

Conservative interest groups and think tanks have backed the block grant idea for several years.

While conservatives heralded the Ryan proposal, some groups that advocate for Medicaid patients and liberal organizations were critical of the proposal, saying it would have the opposite of states’ stated intended effect of keeping the program viable.

“The Ryan Medicaid proposal takes us from neglecting the least among us to targeting them —threatening the lives, dignity, and future of poor, vulnerable seniors, children, and people with disabilities,” Howard Bedlin, Vice President for Public Policy and Advocacy at the National Council, on Aging said in a statement.

Bedlin said the federal government has to watch the states or they’ll weaken quality standards to the detriment of beneficiaries.

“What would happen if nursing home residents and their families could not afford the care, and the Medicaid safety net was no longer there to help?” Bedlin asked. “Could they be thrown out on the streets or have no choice but to move into their children's homes, creating enormous family caregiver burdens?”

The liberal Center on Budget and Policy Priorities also warned that allowing states to drop coverage would likely mean they would.

“The only ways that states could make up for Ryan’s massive Medicaid cuts would be to contribute much more of their own funds or (as is more likely) to use the greater flexibility they would receive under a block grant to roll back coverage for millions of low-income children, seniors, people with disabilities, pregnant women, and working parents,” said Edwin Park, the center’s vice president for health policy.


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