Even as the compromise federal budget resolution hit an impasse last week, one thing seems almost certain: There will be no Medicaid cuts coming out of Congress for fiscal 2005.
Despite passage in the House, concerns among some Republicans and Democrats in the Senate last week over the federal fiscal deficit put in jeopardy a $2.4 trillion compromise budget bill for 2005.
The House passed the spending blueprint 216-213, but with a projected deficit of $367 billion for 2005, passage of the bill in the Senate remained uncertain after President Bush and Senate Republican leaders unsuccessfully tried to cajole four moderate Republicans and one moderate Democrat, who were going to vote against the bill, to change their minds. The Senate plans to tackle the bill when it comes back from the weeklong Memorial Day break that began May 21.
Senate and House negotiators crafted the compromise bill to reconcile differences in each chamber's budget proposals passed in March. For healthcare providers, the main concern was the possibility of a $2.2 billion cut in Medicaid funding over a five-year period contained in the House proposal. The Senate's own budget blueprint contained no cuts to the program. Last week's compromise removed the provision to cut Medicaid.
The House-Senate budget blueprint allocates $252 billion in 2005 for non-Medicare health programs, the vast majority of which would go to Medicaid and the State Children's Health Insurance Program, and $289 billion for the Medicare program. Because the blueprint is just a broad guide for federal spending, details of how much would go for healthcare-related programs won't be determined until further along in the budget process.
Failure of Congress to pass a budget essentially would leave government without a spending guide. In such a case, federal spending for 2005 would remain at 2004 levels and there would be no cuts to Medicaid.
The budget process is still far from complete and Medicaid cuts may be brought up again during the next few months, but the chances of such a proposal passing Congress, especially in the Senate, are slim, said Tom Nickels, senior vice president of federal relations at the American Hospital Association. "Realistically what this means is that Congress will not cut Medicaid this year," he said.
The Medicaid program, jointly funded by the federal government and states, covers 53 million low-income adults and children. In March, 20 provider groups including the AHA wrote to members of Congress asking them to spare Medicaid from the knife in light of the fiscal crunches states are already experiencing. State Medicaid directors have said that current fiscal deficits already pose a threat to their Medicaid programs and could lead to reduced access and benefits.
The scrapping of the Medicaid cuts was not a surprise. Last year, a similar scenario unfolded and in this election year, many in Washington said legislators were loath to cut into a program benefiting the impoverished.
"I don't think they could enact Medicaid cuts this year," said Matt Salo, director of the health and human services committee for the National Governors Association. "It would be a politically risky move."
In his budget plan, President Bush sought a $24 billion cut to the program over 10 years by eliminating fraud and abuse. The CMS is working to estimate how each state would be financially affected by the proposal.
In congressional testimony last month, Dennis Smith, director of the CMS' Center for Medicaid and State Operations, said not much would change for states that have played by federal rules. Regardless, Democratic opposition to the plan runs high. Removal of the Medicaid cuts from last week's bill should not be interpreted as a referendum against Bush's plans for Medicaid reform in general, said Edwin Park, senior health policy analyst at the Center on Budget and Policy Priorities, a Washington-based nonpartisan think tank. "There is support for the administration's proposal, at least among Republicans," he said.