Governors: Don't Fray the Medicaid Safety Net, Congress: Don't Let Them

The federal government is pumping trillions of dollars into state programs to help get the national economy back on track and Americans back on their feet. But whether our most vulnerable citizens truly get the financial assistance promised to them is another question.

The National Governor's Association, led by its chairman, Gov. Edward G. Rendell of Pennsylvania, succeeded in persuading the U.S. Congress to add $87 billion, nationally, in Medicaid funding to the American Recovery and Reinvestment Act of 2009.

These state and federal leaders were right in doing this. Medicaid stimulus dollars are vital to the nation's economic recovery.

When times are tough, demand for the social services rises, and that further fuels demand for Medicaid funds. Even before the economic downturn, state Medicaid programs were stretched too thin. When financial markets crashed and unemployment soared, state tax revenues fell like a stone off a cliff.

Given that Medicaid is a state and federal taxpayer-funded public health insurance program that finances essential health care and long-term care for those in need, few states would have been able to manage increasing Medicaid costs to help the growing ranks of those in need, and still find money to invest in programs that promote economic growth.

The federal stimulus money helped to stave off a health-care emergency on top of our economic collapse. At least, that was the theory.

Unfortunately, in state capitols across country, governors are playing a shell game with state and federal dollars.

Federal stimulus funds were meant to shore up a fraying safety net that cares for needy citizens, including children, seniors and disabled individuals. But as federal Medicaid funds flow in, state Medicaid dollars are being shifted to pay for other budget priorities, such as corrections, transportation and education.

In other words, just as the federal government is reducing the size and numbers of the holes in the safety net, governors are enlarging the holes by removing other parts of the netting.

All of this isn't to say these other programs aren't worthy of additional funds. They may be.

But the real issue is whether Congress intended that social service dollars be diverted for other purposes, and whether this federal money is being used in a way that violates the spirit of the stimulus law that Congress passed.

Congress clearly included the Medicaid funding in the economic stimulus package in order to preserve health care access. Instead, in many states those funds are being used to substitute for state dollars.

Federal legislators would be wise to keep watch over states to ensure their intent is met. As the nation begins a serious debate on health care reform, a crisis could be at hand if already limited Medicaid dollars continue to be diverted to other needs or health care reform is "paid for" by cutting Medicare and Medicaid funding.

States should not be allowed to play a shell game with the dollars when it comes to managing the health-care needs of a rapidly aging population.

We, in Pennsylvania, among the oldest in the nation, are fortunate that Governor Rendell recognizes this fact. In fact, this past weekend he told the media, "Ending vital programs for sick children and adults with disabilities would simply increase unfunded costs to hospitals and nursing homes, many of which are already near the brink of financial collapse." Other Governors should follow his lead and recognize that Medicare and Medicaid cuts simply cannot be absorbed if the elderly are to continue to receive quality care.

While all health care providers lose money caring for Medicaid patients, nursing homes are especially impacted, since nationally, more than 60 percent of nursing home residents are on Medicaid. On average nationally, for each one of those residents, a nursing home is forced to absorb nearly $12.50 a day, or $4,500 a year.

One-third of those entering nursing homes as self-paying individuals spend down their assets and eventually qualify for Medicaid. With the stock market collapse eating up nest eggs, people have fewer dollars and are turning to Medicaid much sooner.

Making matters worse are proposed regulatory changes at the federal level that will cut Medicare-financed nursing home care by $18 billion in the year ahead. In fact, the Obama administration has proposed the identical cuts that the Democrats in Congress defeated when they were proposed by President Bush.

Medicare and Medicaid funding are inextricably linked, and the combination of cuts to both programs squeezes facilities in a manner harmful to older residents' growing care needs.

Congress included Medicaid stimulus dollars precisely for this reason -- to ensure our most vulnerable residents, especially the frail elderly and disabled in nursing homes, get the high level of care we all want and expect for our loved ones.

States would be wise to follow the lead. Ensuring quality care into the future means using health-care funds as intended, and not shifting those resources to pay for other budget priorities.

Stuart H. Shapiro, M.D.
President and CEO
Pennsylvania Health Care Association
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