Budget Reconciliation, Medicaid Cuts Temporarily Delayed Following Hurricane Katrina
Hurricane Katrina has "forced Republicans to temporarily set aside a planned fall agenda," including the budget reconciliation process and plans to find $10 billion in Medicaid spending reductions over five years, the Washington Post reports. The move comes after President Bush on Wednesday sent Congress a request for $51.8 billion in hurricane relief, raising Katrina's cost to the federal government to $62.3 billion, "easily a record for domestic disaster relief," the Post reports (Weisman/Goldstein, Washington Post, 9/8). Senate and House committees had been working to meet a Sept. 16 deadline to complete packages of tax and spending cuts required by the fiscal year 2006 budget resolution (Young/Hearn, The Hill, 9/8).
But Sens. Gordon Smith (R-Ore.) and Olympia Snowe (R-Maine) -- members of the Senate Finance Committee, which is charged with finding $10 billion in savings primarily from Medicaid -- on Tuesday in a letter to committee Chair Chuck Grassley (R-Iowa) expressed opposition to continuing the process to find Medicaid cuts. Smith said, "I do want to reform Medicaid. But this is not the time to take on Medicaid, nor other entitlements for the poor. ... To do it now is counterproductive and insensitive."
In addition, Senate Minority Leader Harry Reid (D-Nev.), House Minority Leader Nancy Pelosi (D-Calif.), Sen. Kent Conrad (D-N.D.) and Rep. John Spratt (D-S.C.) on Wednesday in a separate letter asked Republican leaders to focus on Hurricane Katrina-related legislation instead of the planned agenda. They wrote, "Under the present circumstances, we believe it would be misguided to proceed with fast-track consideration of legislation that would place at risk services to those in need and divert resources that are necessary to fund the federal response to this tragedy."
Republican leaders on Wednesday said they will suspend action on reconciliation bills but will resume action on the legislation in a few weeks (Rovner/Cohn, CongressDaily, 9/8). A spokesperson for Senate Majority Leader Bill Frist (R-Tenn.) on Wednesday said a final decision on whether to delay the budget cuts or entirely abandon them would be made by the end of the week (Richmond Times-Dispatch, 9/8). A spokesperson for HHS declined to comment on the delay (Freking, AP/Las Vegas Sun, 9/8).
Angela Kuck, spokesperson for House Budget Committee Chair Jim Nussle (R-Iowa), said, "Nussle feels that it is more than reasonable to expect a delay on this due to national emergency, but he still believes the need for fundamental programmatic reform is still critical" (The Hill, 9/8).
Senate Budget Committee Chair Judd Gregg (R-N.H.) said most of the planned cuts to Medicaid would not occur for at least two years, by which time the hurricane survivors' immediate needs would be met. Gregg added that the planned cuts would represent only $10 billion out of Medicaid's $1.3 trillion projected five-year budget (Richmond Times-Dispatch, 9/8).
Grassley said he will propose that any state affected by the hurricane could opt out of the changes to Medicaid if they thought the proposals would not help.
Rep. Sherrod Brown (D-Ohio) said, "Clearly, the number of dollars required in Medicaid, very stretched already, will increase. It would be amazingly callous, and to me, unconscionable if they insist on these Medicaid cuts" (AP/Las Vegas Sun, 9/7).
Tom Kahn, Democratic staff director to the House Budget Committee, said, "We think the announcement of the delay is good news," adding, "We think it reflects a recognition that the Republican reconciliation bill has the wrong priorities for the country, especially after Katrina" (The Hill, 9/8).
In related hurricane news, the Los Angeles Times on Thursday examined efforts by several federal agencies, state and local governments and private charities "to improvise a safety net capable of helping support displaced people for months," including providing Medicaid benefits to hurricane survivors. Government agencies are "rewriting rules" to provide medical care, cash, housing, education and jobs for as many as one million evacuees, according to the Times.
Medicaid eligibility rules that differ from state to state "will have to be waived" to ensure care for evacuees with chronic illnesses, and "[a]dvocates are urging the federal government to pick up the entire Medicaid cost in Louisiana, Mississippi and Alabama," the Times reports. CMS Administrator Mark McClellan said, "New kinds of Medicaid waivers may be needed. We are moving now to think of the longer-term needs of people who have been displaced and getting them into benefit programs that will help get them on their feet."
HHS Secretary Mike Leavitt said, "We need to help evacuees all over the country. Food, health care ... all of the things it takes to get one's life on track. You will hear much more about that soon." Wade Horn, assistant secretary for children and families at HHS, said, "There is nothing in our history on the scale of what we are trying to accomplish" (Alonso-Zaldivar/Fiore, Los Angeles Times, 9/8).
Grassley and Sen. Max Baucus (D-Mont.), ranking finance committee member, have been working together on a hurricane relief bill for programs in their committee's jurisdiction. According to CongressDaily, "[a]mong the topics the relief bill will address are ensuring that Medicare, Medicaid and the [state SCHIP program] 'are available to help in every way'; giving states flexibility with unemployment benefits, and possibly tax changes to help in the rebuilding effort."
Full Senate action should be taken "as quickly as possible, ideally that would be early next week," according to the senators (CongressDaily, 9/8). In addition, Reps. John Dingell (D-Mich.), Henry Waxman (D-Calif.) and Brown on Wednesday in a letter to Leavitt urged the Bush administration to agree to states' request to pay 100% of costs for Medicaid beneficiaries added to their rolls as a result of Hurricane Katrina.
The lawmakers wrote that states' "economies, already poor and struggling to recover from the recession, will be unable to support the regular matching payments needed to provide health care to the tens of thousands who will need it over the coming months" (AP/Las Vegas Sun, 9/7).
Texas Gov. Rick Perry (R) has warned that his state might not be able to afford to provide health care to hurricane survivors if the federal government does not pay the full cost. In a letter to Leavitt, Perry wrote, "Clearly, no state in America could absorb the tremendous financial cost associated with meeting this public health challenge." Perry added, "Without the guarantee of total federal funding for Medicaid services for evacuees in Texas, Texas taxpayers will be forced to bear a financial burden that, in effect, punishes them for opening their hearts and homes to fellow Americans in need" (Garrett, Dallas Morning News, 9/8).
In Georgia, where state health officials said the Medicaid eligibility process will be streamlined for hurricane survivors who have lost their homes and jobs, officials expressed concern about the cost and also about the burden to an already overstretched health care system. Kevin Bloye, spokesperson for the Georgia Hospital Association, said, "We suspect a fairly high number of evacuees are uninsured, and the hospitals will end up bearing the cost of that care unless the federal government elects to reimburse hospitals for those costs." Patrick O'Neal, medical director of Georgia's Division of Public Health emergency medical and trauma services, said, "I'm concerned about trying to protect a fairly fragile emergency response system that is already, on occasion, on the verge of collapse" (Miller, Atlanta Journal-Constitution, 9/8).
Meanwhile, Tennessee officials on Wednesday said certain hurricane survivors are eligible for TennCare, the state's Medicaid program. The state recently implemented changes to the program that will result in 200,000 people losing coverage (Wadhwani, Tennessean, 9/8).