GOP proposes cuts to Medicaid

Flanked by other congressionial members, U.S. Rep. Paul Ryan (R-WI) (C), chairman of the House Budget Committee, holds up a copy of the 2012 Republican budget proposal during a news conference April 5, 2011 on Capitol Hill in Washington, DC.
Flanked by other congressionial members, U.S. Rep. Paul Ryan (R-WI) (C), chairman of the House Budget Committee, holds up a copy of the 2012 Republican budget proposal during a news conference April 5, 2011 on Capitol Hill in Washington, DC. Alex Wong/Getty Images

About one in five Californians relies on MediCal, the state’s version of Medicaid, to pay for their health care. On Tuesday, US House Republicans unveiled their budget proposal for 2012. It includes hefty cuts and major structural changes to the federal Medicaid program.

The GOP budget proposal would shrink Medicaid’s budget by $750 billion over the next 10 years. That’s a cut of about 30 percent.

California’s health care services director Toby Douglas says those cuts wouldn’t just affect the 7.5 million poor people in California who rely on MediCal.

"MediCal is a huge investment in California in the broader delivery system: keeping our trauma centers open, keeping our hospitals open, keeping nursing facilities open," he says. "To the extent you pull a lot of money out of the system, you’re creating a situation where providers may have to close their doors, leaving other citizens without access to care."

The GOP proposal also changes the way federal Medicaid dollars would be delivered to states. Congressman Tom McClintock sits on the House Budget Committee. The Republican from South Lake Tahoe says the plan would offer states like California the freedom to spend Medicaid dollars based on their particular needs and populations.

"Federal government will be block granting a sum to each of the states and the states will be restored the freedom to decide how best to manage those funds," says McClintock.

Douglas says he supports flexibility, "but believes that the current Medicaid program is structured in a way that we can create more flexibility within the current rules."

Douglas is in Washington this week for meetings with his federal counterparts at the Department of Health Services. He says block grants are risky for state governments.

"Fundamentally a block grant is based on assumptions on how enrollment will grow in a program, how health care costs will grow," he says. "To the extent those assumptions are off, you’re placing fiscal risks on a state. That if enrollment grows because of an economic recession, if there are new health care costs that are far outpacing projected health care trends, again states will have to do it."

Congresswoman Karen Bass of Los Angeles remembers a battle she fought in Sacramento when she was state Assembly Speaker.

"Our governor wanted to have flexibility in the in-home supportive services program because he essentially wanted to gut it," says Bass.

The Democrat, a freshman member of the House Budget Committee, hopes to avoid déjà vu on the federal level.

"I think the idea of allowing states to pick and choose who they provide health care to and the type of services that are provided, you’re talking about a throwback to the past of states’ rights," says Bass. "The reason we put it in the hands of the federal government was to protect against the whims of an individual state."

The Medicaid changes Republican House members have proposed are the opening salvo in a long fight over next year’s budget. That battle won’t begin in earnest until Congress can agree how to fund the government for the next six months.

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