Medicaid Expansion: Health Care Reform's Newest Challenge

"Until the nation's governors staged a public revolt last weekend, few people were paying attention to one of the most far-reaching proposals being considered as part of overhauling the health care system: a dramatic expansion and redefinition of the Medicaid program," Time reports. "Redefining who is eligible for Medicaid would be one of the major means by which lawmakers hope to achieve universal health coverage — which is one of the reasons that Governors, whose budgets already are straining under the program's growing costs, are so wary of the idea."

The Medicaid proposal, which "came to a boil as the National Governors Association met in Biloxi, Miss., could "hardly come at a worse time for the Governors. The recession has drained state coffers of tax receipts, even as public need for state safety-net services is growing. According to the Center for Budget and Policy Priorities, at least 48 states are facing shortfalls totaling $166 billion — which is 24% of their total budgets. ... Nor, it seems, could the governors' rebellion have come at a worse time for President Obama's health-care-reform effort, which is being hit from every side by growing doubts."

Currently, many low-income adults are not eligible for Medicaid, but they could be if Congress decides to "make income alone the determinant of Medicaid coverage. Under the health reform bill now being considered by the House, all non-elderly people earning at or below 133% of poverty — about $14,400 for an individual, and $29,300 for a family of four — would be eligible." The House bill would have the federal government "pick up the entire cost of those newly covered under Medicaid — $438 billion over 10 years," while a Senate finance draft version "would have the feds paying the additional cost for only five years, after which the states would have to pick up their typical share of existing Medicaid costs, which averages over 40%" (Tumulty, 7/21).

NPR interviewed Gov. Jim Douglas, D-Vt., who heads the National Governors Association. Douglas "says at 24 percent, his state has one of the highest rates of Medicaid enrollment in the nation. Douglas tells Robert Siegel that in Vermont, Medicaid costs $1.2 billion, a burden that is shared by the state and federal governments." He "estimates that by the end of the next decade, 25 percent across the nation will be enrolled in the program, and, unless costs are controlled, that figure could approach 30 percent. 'That really clouds out all the other responsibilities of state government,' he says" (7/20).

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