NHELP: Medicaid Federal Update

The Latest News:

  • Negotiations around federal funding for Medicaid and Medicare and national deficit reduction have intensified as we approach the August 2 deadline for raising the debt ceiling.  As mentioned previously, failure to raise the debt ceiling would lead to a historic credit default, and according to numerous independent Federal financial authorities, severe risks for a new recession.
  • Negotiations were previously taking place primarily in a small group led by Vice President Biden. The group fell apart two weeks ago, however, when House Majority Leader Eric Cantor and Senator Jon Kyl walked away from the talks over the issue of tax increases.  Republicans have repeatedly asserted that tax hikes remain a topic off the table in negotiations.
  • As a result, President Obama has taken up leadership of the negotiations.  On Thursday of this week, the President met at the White House with the bipartisan leadership of Congress in an effort to work out an agreement to raise the federal debt limit. Democratic officials  have suggested that the President wants to move well beyond the $2 trillion in savings sought in earlier negotiations and seek perhaps twice as much over the next decade.  After the meeting concluded, Obama said he and congressional leaders plan to reconvene Sunday “with the expectation that at that point the parties will at least know where each others’ bottom lines are.”
  • After the meeting on Thursday, multiple news outlets reported that President Obama had proposed significant cuts to Medicare and Social Security in the closed-door talks.
  • President Obama has also proposed a single “blended” matching rate for each state for all Medicaid and CHIP expenses.  We have serious concerns about this proposal because replacing the various matching rates with a single blended rate for each state will not reduce costs, but will only shift risks and costs to states, healthcare providers, and individuals.  If a blended rate is adopted as a method of obtaining reduced Medicaid expenditures, it would likely be as detrimental as a cap on overall Medicaid spending.  And since the proposal was developed to cut funding, any administrative efficiencies of having one matching rate will be offset by the need for states to cut eligibility, services or provider rates to come up with the projected savings.
  • The bottom line is that President Obama needs to hear from our Representatives and Senators that they adamantly oppose these proposed Medicaid cuts. (See the action item below for more information)
  • Senate Budget Chairman Kent Conrad is expected to unveil a fiscal 2012 budget resolution soon, which he said could serve as a tool for raising the debt ceiling.  Conrad planned to brief Senate Majority Leader Reid and Democratic senators before making the plan public.  Although Conrad has released few details, the spending and tax blueprint is expected to aim to trim the deficit by at least $4 trillion over a decade. The plan would generate savings through closing tax breaks, cutting spending and reducing interest payments on the debt.
  • Meanwhile, there is continued discussion that a  short-term debt-ceiling extension might be necessary in light of an impasse between Republicans and Democrats over compromising on a long-term extension. President Obama, however, told a bipartisan group of Congressional leaders Thursday that he will only sign into law a budget deal that extends the debt limit past the 2012 elections.

New Resources:

  • NHeLP has produced a paper identifying actions that, when taken correctly, can save states money in their Medicaid programs without impacting eligibility, services or imposing harmful co-payments.  Most of the measures listed in the paper only require administrative action to implement.  The paper is available here.
  • The Moms Rising story map is a collection of personal stories from members across the country about how Medicaid is helping their families. Stories are often the most time-consuming part of media and policymaker education work. Moms Rising is making these stories available to state advocates for work with policymakers and the media in your own state. If you would like to get in touch with a story sharer in your state, contact Donna Norton at donna@momsrising.org.
  • Consumer and health care provider groups have released a study that highlights the real-world impact across-the-board spending cuts in federal programs could have on some of our nation’s most vulnerable people, including the elderly, children and low-income families. The groups include AARP, American Hospital Association, American Medical Association, American College of Cardiology and LeadingAge. To see AARP’s press release, please click here. A summary of the report can be found here.

Action Items:

  • On Tuesday July 12th, Caring Across Generations, the PICO National Network, Alliance for a Just Society, Community Catalyst and the Campaign for Community Change will join Senator Rockefeller and other champions to stand up for the millions of seniors, children, people with disabilities and working families who depend on Medicaid and Medicare. Come to DC – Join  a rally from 2:30-3:30pm in the Dirksen Senate Building. Sign up for a call to action so your grassroots network across the country has the opportunity to tell their Senators “Medicaid Matters!”
  • Call your Senators and Representatives and ask them to weigh in with President Obama in opposition to Medicaid cuts. The toll-free number is 1-888-907-1485, which directs you to the Capitol switchboard. You can then ask for the Senators and/or Representatives from your state.  You can also call the White House directly and let them know that you oppose Medicaid cuts.   The toll-free comment line (9-5 EST) is  1-888-245-0215.

Cate Hodgetts
Staff Attorney
National Health Law Program

“Securing health rights for those in need”

1444 I Street NW, Suite 1105

Washington, DC 20005




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