Lawmakers Likely To Consider Cuts to Medicaid in Budget Reconciliation Effort
As Republican budget writers seek to reduce the federal budget deficit in the coming months, Medicaid and other mandatory spending programs "likely" will be targeted, Senate Budget Committee Chair Judd Gregg (R-N.H.) has indicated, CQ Today reports. President Bush last year said that he would reduce the federal budget deficit by half by 2009, and he is expected to "kick off" debate over a budget reconciliation bill -- which would seek reductions in mandatory spending programs for the first time since 1997 -- when he submits his 2006 budget proposal on Feb. 7, according to CQ Today.
Gregg on Thursday said in an interview in the Concord Monitor that he expects lawmakers to try to reduce Medicaid spending growth by loosening restrictions on states' use of Medicaid funds while also lowering federal contributions to the program. Previous reports have said that the Bush administration is considering resubmitting a proposal to limit allotments for optional populations and benefits in the Medicaid program in exchange for increased federal contributions in the first few years of the proposal.
Bush first proposed such a program in 2003, but the concept was criticized by Democrats and governors. CMS Administrator Mark McClellan said, "Whatever we propose, if we propose something, it's going to be labeled a 'block grant.' But it's important to look at the actual details. We want to support successful models (being proposed or tried in various states)" (CQ Today, 1/13).
According to the Knight Ridder/Tallahassee Democrat, opposition to Medicaid cuts "is already shaping up," with several hundred national and state organizations -- including the AFL-CIO and March of Dimes -- signing a Jan. 12 letter urging Bush not to cut or cap federal Medicaid funding.
Ron Pollack, executive director of Families USA, said that the upcoming debate over Medicaid "constitutes, literally, the largest threat to public health coverage in the history of our country" (Pugh, Knight Ridder/Tallahassee Democrat, 1/13).
Gregg in his interview also said he plans to re-examine the new Medicare law, which he opposed in 2003 because of the legislation's high cost. He said, "About 30% of the [new prescription drug benefit] is a subsidy to big businesses to keep them in the business of providing prescription drug care," adding that such incentives to employers to maintain retiree prescription drug coverage "should be looked at" (CQ Today, 1/13).
However, some experts say concern over Medicare's finances -- related in part to an estimate that Medicare's hospital trust fund will become insolvent in 2019 -- are "overblown," according to the Knight Ridder/Democrat. Bruce Vladeck, a former Medicare administrator and now a health care consultant at Ernst & Young, said that Medicare's finances are healthier now than they were in 1997, when experts said the trust fund would be insolvent by 2001 (Knight Ridder/Tallahassee Democrat, 1/13).