Finance Committee Holds Hearing on Medicaid and Medicare – Say Ahhh! A Children’s Health Policy Blog

As negotiations stalled on addressing the debt ceiling and ongoing budget deficits, the Senate Finance Committee held a hearing
today on the long-term sustainability of Medicare and Medicaid. While
much of the focus was on Medicare, Medicaid also played a prominent
role, especially around proposals to block grant the program.

response to questions on the effects of such a proposal, Governor
Patrick of Massachusetts replied that it would be unsustainable for his
state – that they would be forced to either “cut people, or cut
benefits.” Even though they are one of only three states with a
positive fiscal outlook, they couldn’t afford the loss of federal
funding. The federal-state partnership has allowed MA to achieve the
highest rate of coverage on record (98%) and by reneging on that
partnership, the gains that have been made would likely be lost.

Grassley (R-IA) expressed some concern as to how a block grant would
impact those currently covered under Medicaid, especially children with
disabilities. (He expressed this apprehension while also acknowledging
that even under a block grant, the feds are not going to hand over
billions without some strings attached. Raising the question as to what
those “strings” might be.) Former Governor Fletcher from Kentucky
reassured him that even with additional flexibility under a block
grant, the federal government would still be able to set some
parameters, such as requiring states to provide services for those with

Personally, I’m not at all comforted by
Fletcher’s assurances. With states facing massive declines in federal
financial participation, the resultant cost-shift to the states would
make it hard for states to maintain their current Medicaid enrollment.
In fact, estimates
suggest that under a block grant proposal (similar to what was passed
in the House Budget), enrollment would decline by 19.4 million people.
Whose coverage would be at risk? Would the “strings” not include
children? People with disabilities? The elderly in long-term care

Senator Cardin (D-MD) summed it up by saying that we need to find
a comprehensive approach to deal with our deficit, but one that does
not jeopardize the care for the poor, elderly, and disabled. Senator
Baucus (D-MT) agreed, stating that the vulnerable can’t bare the burden of
deficit reduction alone. A block grant proposal would, while saving the
federal government money, do just that by shifting the burden to the
states and those among us that Medicaid was designed to protect.

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