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Monday, August 21, 2006
Backdoor Medicaid Cuts Possible
The Bush administration is trying to take health insurance away from poor people again, this time by creating regulations that would force states to lower taxes on health care providers. The taxes help states pay for health care services covered under Medicaid, and result in higher matching grants from the federal government. The states effectively offset the cost of the tax with higher reimbursement rates for the taxed health care providers, which are made possible by the federal matching grants.
The move is opposed by all the relavant stakeholders, including:
- The National Governor's Association
- 330 Members of the House of Representatives, including 82 Republicans
- The American Hospital Association and the American Health Care Association
The new regulation would "save" the federal government $12.2 billion. If the states lose the revenue from these taxes and the federal grants, they are likely to cut services. Thomas Nickels, senior vice president of the American Hospital Association, said that “if provider taxes are cut, the Medicaid program will be reduced, and that will harm beneficiaries. We do not see a political will, at the federal or state level, to supplant provider taxes with other types of revenue.”
The process used here stinks, frankly. This should be a legislative proposal, not a regulation. In fact, the President admitted as much when he asked Congress in his FY 2007 budget proposalto enact legislation that basically does the same thing. If the President wants a benefit cut, he should do it the old-fashioned way and let Congress vote on it.
The problem is, Congress already rejected the cut. Robert Pear wrote in the New York Times that advocates are arguing that Bush "is doing by regulation what he unsuccessfully asked Congress to do by legislation in the last two years."
Health and Human Services Michael O. Levitt says the cut will "remove incentives for states to shift the responsibility to fund their share of the Medicaid payment to health care providers." But since health care providers are effectively reimbursed for the tax by federal matching grants, what he really means is that states shouldn't shift responsibility to the federal government.
As Congress has shown, most of the federal government doesn't really seem to mind helping the states out a bit. The Bush administration is alone in its shameful behavior.
Posted by Matt Lewis
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