More Medicaid Changes Coming?

Readers of my blog know that I have written often of the need to plan ahead because nobody, especially the government, is going to bail you out.  The last round of changes to the Medicaid program were made more than 5 years ago and have had a dire impact on many Americans who need long term care.  There are indications from Washington that perhaps even more drastic changes are yet to come.

 The numbers are staggering.  The federal government spent $216 billion on Medicaid in 2009, about 7% of the overall budget.  States spend, on average, 22% of their budgets on Medicaid.  Those numbers are increasing at a rate of 6 to 7%, outpacing the rate of inflation.  The government realizes it must do something to rein in the cost.  As usual, the battleis drawn along political lines.  Republicans are pushing to turn Medicaid into a block grant program.  Democrats are fearful that services will be cut and costs won’t be curtailed if that happens.

 So, what would a block grant program mean?  First of all, under the Republican proposal, there would be set funding levels, rather than open ended funding as there is now.  Less federal funds would be provided to the states, but that would mean more control for them.  Now, all states must follow certain guidelines and offer Medicaid to specific categories of people.  However, they can offer additional programs, provided they apply for a waiver from the federal government.  If Medicaid is converted to a block grant program states would be able to entirely set their own Medicaid rules.  Some state governors feel that their hands are tied in terms of their attempts to “rein in” Medicaid because of the federal restrictions.  A block grant program would “release” those strings.

 What would the change look like?  It’s hard to say specifically, but it is reasonable, in light of tough economic times and government budget deficits, to expect that it will be more difficult to qualify for benefits.  And when can we expect these changes?  The House of Representative passed a proposal but political experts believe the Senate will reject it and President Obama has said he opposes it.  Even if it fails this time around, the issue won’t go away and another presidential election looms in 2012.  A transfer of power could change the political landscape considerably so stay tuned.