Federal programs generally begin with a desire to achieve equity among all affected parties. This sense of fairness is essential for large programs like Medicaid to gain a consensus in Congress. Over the 30 years since its inception, the Medicaid matching formula has produced grotesquely unfair results.
Numerous General Accounting Office studies have documented the flaws in the Medicaid matching formula. With 1994 per-capita spending ranging from a high of $9,661 in New Hampshire to a low of $2,681 in Mississippi, all pretense at fairness has vanished.
Because of congressional determination to break Medicaid's link to specific categorical programs and reduce the rate of growth, we have a golden opportunity to restore equity in the federal dollars that go to the states to cover the healthcare needs of vulnerable populations.
At least 21 state hospitals associations have come together in the Medicaid Hospital Association Coalition to push for equity. We are urging our congressional delegations and governors to achieve equity through a formula that will:
Be population driven by recognizing the growth in a state's poverty population.
Increase payments to those states below the national per-capita average until they are brought up to the average.
Include a factor to account for the variations in the cost of care among the states.
Once the nation moves closer to equity among states, we would support a future allocation formula that is driven primarily by population with an adjustment for cost-of-care variations.
The possibility of a congressional train wreck or implosion of the appropriation process is distasteful to us. We need to correct this growing disparity among the states. There should be room enough for all the states to come together.