Medicaid Expansions Could Spell Trouble For States, Democrats In Congress

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Rising health costs, growing numbers of Medicaid enrollees and the possibility of a new mandate to increase the income threshold to become eligible for the program are combining to put state's governors, as well as Democrats in Congress in sometimes awkward positions.

The Democratic reform proposals in Congress would increase the income threshold for Medicaid eligibility and would add millions to the rolls, the New York Times reports. States currently have much leeway in setting the eligibility rules for their programs, although on average they receive a majority of the funding from the federal government. Alabama, Louisiana, Arkansas and Texas are among the most stringent states, while states with strong Democratic bases such as California, New York and New Jersey are among the more generous. To achieve the desired expansions of the program in the poorer states, federal payments would be higher there, which means Democrats would be signing off on a bill that "directs a disproportionate sum of money to traditionally red states" (Herszenhorn, 9/14).

Those congressional Democrats aren't alone in their Medicaid troubles. State officials, who are wrestling with growing budget gaps as unemployment rises and Medicaid ranks expand, are concerned, the Associated Press reports. "[S]ome governors worry their financial burdens could get worse as Congress works on a comprehensive health care bill." Mississippi Gov. Haley Barbour said, "If the federal government wants to expand health care to everybody in the country, they should not force the states to pay part of the bill. If they want to do that, the federal government should pay for it." In many states, like New Mexico, where Medicaid enrollment has risen by 10 percent in about a year, budgets are already strained. The reform proposals would vastly expand enrollment, requiring states to pay more matching sums (Pettus, 9/14).

South Carolina Gov. Mark Sanford, a Republican, has voiced his opposition to the plan as well. "If these so-called reform proposals move forward, almost all states will have to raise taxes to manage this health care expansion," he wrote in a letter to federal lawmakers, The Greenville (S.C.) News reports. Sanford also opposed a Medicaid expansion that increased the federal match through the stimulus package in anticipation of growing numbers of unemployed persons eligible for the program. When that funding expires, Sanford says, the state will be forced to pick up an additional $450 million in annual spending (Osby, 9/15).

These anxieties have reached the Senate Finance Committee, which continues to negotiate a more centrist reform package. The Washington Times reports, "A proposed expansion of Medicaid, the health care program for lower-income Americans, has emerged as one of the last sticking points in the Senate Finance Committee's health care reform bill, with governors and state legislatures around the country worried they're going to get left with the tab" (Haberkorn and Hallow, 9/15).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.

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