Yesterday, the Congress finally passed a $26 billion aid package designed to help states “open their school years with fewer layoffs” and “pay health care benefits for the poor.” In addition to the education spending, “the bill will send $16.1 billion to state governments to help shore up Medicaid, the joint federal-state health care program for lower-income people.” ““I’m grateful that Congress has passed legislation that will keep Michigan teachers educating our children and ensure that our citizens have access to health care services,” Gov. Jennifer Granholm (D-MI) said in a stement, echoing the sentiment of state lawmakers across the country. Throughout the recession, states have struggled with lower than expected revenues and rising Medicaid caseloads and some have already made painful cuts to their health programs or increased taxes.
But Republicans in Congress — who characterized the measure as an unfunded bailout for “special interests” and the states — are arguing that states don’t need the extra health care funding:
REP. JOHN BOEHNER (R-OH): “Washington Democrats claim that spending an additional $180 million per day on Medicaid will somehow create jobs when it is in reality a giveaway to state bureaucrats at the expense of American taxpayers. While Democrats want to add another $16 billion to the cost of the Medicaid program, states would be better off if Congress would simply help them address the 40 percent of their Medicaid expenditures that are either criminally fraudulent or simply unnecessary.” [House website, 8/10/2010]
REP. JOE BARTON (R-TX): “There’s no national emergency…New York has a Medicaid reimbursement rate at 350 percent of poverty, which is pushing about $80,000 for a family of four.” “This is money we don’t have being spent on programs that are not in dire emergency at a time when the unemployment rate is 10 percent.” [The Hill, 8/10/2010]
REP. PETE HOEKSTRA (R-MI): “Bailing out unions is not the solution to fixing K-12 education or states failing to budget for Medicaid. Government needs to get out of the way and allow for more local control and decision-making.” [House website, 8/10/2010]
REP. JEB HENSARLING (R-TX): “There’s a national emergency—apparently Congress has not spent enough money.” [Wall Street Journal, 8/11/2010]
While the additional spending package will provide only temporary relief to overstretched state budgets, without the funding, states would have been forced to lay off tens of thousands of employees and cut essential services from fire fighters to care for the elderly and disabled. Medicaid recipients would have had to pay higher co-pays or face strict eligibility requirements. In fact, according to the Center on Budget and Policy Priorities (CBPP), at least 31 states have already “implemented cuts that will restrict eligibility for health insurance programs and/or access to health care services.” In Arizona, for instance, over 1 million low-income residents have “lost access to Medicaid services offered by the state, including emergency dental services, medically necessary dentures, insulin pumps, airway devices for people with chronic lung disease, gastric bypass surgery, certain hearing aids for the deaf or severely hard of hearing, and prosthetics.”
In February, 47 governors signed on to a National Governors Association letter urging congressional leadership of both parties to extend the “enhanced federal match for Medicaid (FMAP) for two additional quarters.” “States and territories are in the process of finalizing budgets for FY 2011 that our legislatures will be considering over the next several months. Timely passage of an extension of ARRA’s enhanced FMAP would greatly assist us in maintaining services and further stabilizing the economy,” the letter said.
Significantly, some GOP governors with presidential aspirations have agreed with Congressional Republicans. “It’s probably not going to help the economy,” Indiana Governor Mitch Daniels said, after initially signing on to the February letter. Minnesota Governor Tim Pawlenty and Mississippi Gov. Haley Barbour (R) released a similar statements.