As states struggle to balance budgets, Medicaid services are being targeted for severe cuts, and in some cases, elimination.

California, for example, has proposed ending its Adult Day Program, and for all practical purposes, eliminating its In-Home Supportive Services program. Proposed budget cuts in Virginia would reduce personal care assistants’ pay by five percent, as well as freeze for one year the Medicaid waiver programs that help Virginians with disabilities and elders live independently in the community.

According to a new report issued by Health Care for America Now, the combined result of three pieces of legislation — the American Recovery and Reinvestment Act (ARRA) and pending comprehensive health reform and jobs bills — will provide much-needed fiscal relief to the states.

“This report again reinforces how we need to take action now and pass these bills to ease the financial burden on states and provide affordable health coverage for so many American families struggling to make ends meet,” said PHI Government Affairs Director Carol Regan.

Easing the States’ Burden

The report, “Federal Health Reform Provides Critical Long-Term Help to States: Passage of Jobs Bill Needed for Additional Short-Term Relief” (pdf), documents how each of the bills provides assistance to states and individuals. The report also explains how together the bills would ease long-term pressures on state budgets, while ensuring coverage for tens of millions of people who would otherwise look to the states for help:

• The health reform bill would provide $849 billion in new federal funding for health coverage over the next ten years — $460 billion to help families purchase private health insurance and $389 billion for state Medicaid programs.
• The ARRA of 2009 provided a temporary increase in the federal share of Medicaid costs and the last installment of funds – $343 billion — is slated to go to the states by the end of this year.
• Finally, the jobs bill, which has passed the House but not the Senate, would extend the higher federal Medicaid match rate to states into early 2011, providing another $23.5 billion to the states.

The authors of the report argue that passage of comprehensive health reform, as well as the enactment of immediate relief through higher federal share of Medicaid costs, would provide an enormous boost to states, “relieving states of significant budgetary pressures while addressing the rising health care needs of American families.”

– by the PHI Policy Team