Medicaid Funding: U.S. Senate Makes It a Ballgame

The U.S. Senate rebuked its Republican leaders and the Bush administration by voting earlier this month to reject all proposed Medicaid cuts in the bill outlining the federal budget for the next five years. Seven Republican senators joined all the Democrats, including Illinois Senators Richard Durbin and Barack Obama, and one independent to constitute the 52-vote majority. Sen. Gordon Smith (R–Ore.), joined by Sen. Jeff Bingaman (D–N.M.) drafted the amendment to delete the Medicaid cuts from the Senate budget bill.

President Bush announced last month that he wanted Congress to cut $60 billion from Medicaid over the next 10 years (he proposed $15 billion in expanding certain aspects of Medicaid-funded health care for a net cut of $45 billion). Senate Republican leaders, following the president’s blueprint, proposed $14 billion in cuts for the next five years (under the president’s proposal, larger cuts would follow in the following five years to reach the $60 billion target). That proposal was included in the committee bill that went to the floor.

Due to very strong public outcry in support of Medicaid and against cuts, and due to a similarly strong position taken by the National Governors Association, the Medicaid cuts quickly became controversial. Gov. Rod Blagojevich played a strong role in the National Governors Association on this issue. Governors of both parties, beset by state fiscal crises, strongly opposed cuts in federal Medicaid spending, which would only exacerbate state problems without helping states in any way whatsoever. Health care in Illinois would be especially harmed by the president’s proposals because those proposals would eliminate important funding mechanisms that Illinois uses more than most other states to bring federal dollars to the health care systems of Cook County and other high-poverty areas of the state. These cuts threaten not only Medicaid beneficiaries and providers but also the entire indigent care system that helps the uninsured.

Because the Senate passed the Smith-Bingaman amendment deleting all Medicaid cuts from the Senate’s budget bill, a confrontation with the House is next. The House of Representatives has dutifully passed a budget that not only follows the president’s blueprint for cuts in Medicaid but also proposes even higher cuts: $20 billion over the next five years. The two chambers will try to negotiate a budget bill that reconciles all of the inconsistencies between their bills. The House and Senate will appoint conferees to attempt to reach an agreement in April. Those who care about Medicaid will want the Senate to hold fast to its position—no cuts.

Many of the people in Congress and the Bush administration see the possible Medicaid cuts as a crucial aspect of the administration’s attempt to slow down the growth of the deficit—without Medicaid cuts (and without a cessation of the tax cuts for higher-income families), the deficit will continue to spiral upward. The confrontation over the budget bill is therefore one of the most important budget fights this year and perhaps one of the highest-priority battlegrounds for the president’s domestic agenda.

A new campaign for people concerned with protecting Medicaid is “Medicaid Matters for Someone You Know,” a title reflecting that over 50 million Americans get their health coverage from Medicaid. The campaign has produced a fact sheet and other advocacy materials found at its website, www.medicaidmatters2005.org. Those concerned with the issue should contact their representatives and senators starting now and until the budget is finalized to insist that Medicaid not be cut.