Threats to Medicaid Materialize as Congress Begins Work on 2012 Budget, Additional Legislation

by Rebecca Farley on March 24, 2011

In the midst of an ongoing standoff over the Fiscal Year 2011 budget, Congress has begun work on its FY 2012 budget resolution. The budget resolution sets the framework for consideration of the budget and affects later decisions about levels of funding for specific programs. Reports from the House indicate that Medicaid may be a target for substantial proposed cuts in this process.

Of most concern to the community behavioral health field, it appears likely that the budget resolution set forth by Rep. Paul Ryan (R-WI), chair of the House Appropriations Committee, will include a global health spending cap. The goal of this spending cap is $600 billion in cuts to federal health programs over the next ten years, and could only be attained with significant cuts to Medicaid. In fact, although the resolution will not directly require such a move, the only way to achieve such high levels of savings would be to convert the Medicaid program to a block grant or otherwise cap federal spending on Medicaid. The House is expected to release its 2012 budget resolution by April 6, with the goal of passing it through the full chamber by April 15.

Additional threats to Medicaid are likely as the House Energy and Commerce Committee prepares to release a bill that would repeal health reform’s maintenance of effort (MOE) requirement. Under current law, states must maintain 2010 Medicaid eligibility levels until at least 2014, when new federal rules and eligibility levels will go into effect. A group of governors has urged Congress to repeal this MOE provision and allow states to save money by cutting beneficiaries from the rolls. The effect would be a loss of coverage for hundreds of thousands of vulnerable low-income families, children, and adults. Optional Medicaid coverage groups, such as working-poor parents and their children, along with seniors and people with disabilities who are low-income but living near or marginally above the poverty level, would be at highest risk for losing coverage if states are permitted to roll back eligibility.

Action Needed: The National Council is working with our colleague organizations in Washington to fight against these serious threats to Medicaid. We will continue to keep readers informed about the latest updates on these issues through the Public Policy Update and our Action Alert system. If you have not already done so, please sign up to receive our action alerts so that you can take advantage of opportunities to contact your legislators and oppose these threats to Medicaid. Grassroots pressure on Congress will make all the difference as our field organizes against policies that would strip funding from this important program – please stay tuned for more information and opportunities to get involved!

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