Articles

Medicaid Block Grant Funding is a Poor Choice for Maine

The Medicaid Block Grant funding resolution proposed by House Republicans is detrimental to Maine's elderly and individuals with special needs. While this resolution is largely overlooked, the measure is a real threat to those most in need and could result in additional significant financial burden for already strained state budgets, like ours. The budget resolution, H.R. Con. Res. 34 is based on a proposal by House Budget Committee Chair Paul Ryan (R-Wis.). The resolution passed in the House along party lines, with all Democrats opposing the legislation. The resolution has not yet made it to the Senate. However, in order to assure passage in the Senate, the House Republican majority is coupling their approval of an increase in the U.S. debt ceiling with this block grant resolution, making this proposal an unprecedented threat.

The bottom line is that block grants or caps are fiscally irresponsible for states like Maine with an increasing aging populations. Block grant funding will completely change the Medicaid/MaineCare program as we know it. The block grant approach is harmful to the states because it shifts the cost and risk for Medicaid from the federal government to the states.

As we all know, unlike Medicare, which is completely funded by the federal government, Medicaid is funded jointly by the states and the federal government. Currently, the federal government pays a fixed percentage of our Medicaid/MaineCare costs. Under a block grant, the federal government will provide each state with a fixed dollar amount, regardless of the true costs the state faces in providing health care for its low-income and elderly population. In the case of Maine, our elder population is growing at a fast pace. Therefore, an appropriate amount of money for Maine in 2011 will not be appropriate in 2015. If Medicaid funds are block granted, or capped, the 2011 funds will be all the State would receive in 2015. We would have to use the same amount of money to cover more and more people each year. This means that either services will have to be cut or we will have to cover the unknown additional costs.

While the current system accounts for changes in state Medicaid costs, a block grant can only provide a fixed amount per state, regardless of how much care each state needs to provide. With a large "baby boomer" population on the horizon, states will need as much help as they can get to provide care for their elderly. Block granting or capping might make sense for a federal government hoping to cut Medicaid spending, but it is detrimental for the states with an increasing elder population and already strained state budgets.

In addition, block grants increase the burden in times of emergency. In the recent recession, the need for Medicaid/MaineCare services rose dramatically. Under the current system the federal government automatically responded by increasing the percentage match to the states. With a block grant, if there is an emergency or the state runs out of federal funding, the state is left without any federal support.

Those promoting this resolution need to remember that older adults and individuals with special needs account for 75 percent of all Medicaid expenditures. The block grant solution leads to a smaller number of people qualifying for health benefits, with those who do qualify receiving fewer benefits. Those hardest hit will be our elderly and individuals with special needs.

Reducing Medicaid/MaineCare funding as a means to reduce federal deficits is bad public policy and a poor choice for Maine.

Hopefully, when it comes to passing a bipartisan budget, our congressional delegation, Republicans and Democrats alike, will look to sources higher up the economic ladder for help and oppose the harmful Medicaid/MaineCare block grant resolution.

John E. Nale is an elder law attorney with offices in Waterville and serves as Volunteer President of the Maine Association of Area Agencies on Aging, a statewide organization made up of the five Area Agencies on Aging that serve Maine's 200,000 plus seniors.