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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Watch Out for Medicaid

With all the attention being focused on Bush’s Social Security privatization proposal, it’s important for Democrats to keep an eye on a different entitlement program: Medicaid, where there are lots of signs the administration will soon pursue something equally radical.
Making Medicaid something less than a federal guarantee of minimum, defined benefits has long been a conservative goal. Ronald Reagan’s first budget proposal included a “cap” on federal Medicaid payments, which would have basically left the states holding the bag for cost and eligibility increases. It was the one big proposal in the 1981 Reagan budget that was defeated in Congress. But the Medicaid “cap” has continued to circulate on the back-burner of conservative thought ever since. There was a very interesting story in WaPo last week in which the new Secretary of Health and Human Services, Mike Leavitt, preemptively denied that Bush was about to renew the Medicaid “cap” idea. But in the fine print, Leavitt made it clear the foreswearance of a “cap” would only apply to federally mandatory Medicaid coverage, which excludes a whole array of important Medicaid services offered by most states, including prescription drugs, long-term care, and indeed, most services made available to elderly and disabled adults.
Leavitt went on to cite state “gaming” of Medicaid to draw down federal funds, and alleged abuse by middle-class families who hide or shift resources in order to qualify for long-term care benefits, as a big part of the Medicaid cost spiral. But as the Center on Budget and Policy Priorities pointed out in a Feburary 4 report, rising health care (including Rx drug) costs, families losing employer-based coverage, and the aging of the population are the main culprits.
So: expect the administration to propose a Medicaid cap-by-another-name, disguised as some sort of attack on waste, fraud and abuse. And recognize that states are hardly in a position to pick up the slack; any sort of limitation on federal fiscal responsibility for Medicaid will guarantee a significant reduction in services, and another boost in the ranks of the uninsured.
The ultimate conservative plan for Medicaid tracks their main goal with Social Security: making it a defined contribution rather than a defined benefit program. For a glimpse of the Golden Future they desire, look no further than Jeb Bush’s proposal for “Medicaid reform” in Florida, which would basically write checks to private insurers and give them unprecedented latitude over who they will cover and what services they will provide.
If you care about old folks and po’ folks, this is some scary stuff, and a token of how far both Bush brothers are willing to take their ongoing mockery of George W. Bush’s pledge to usher in a “responsibility era.”

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