The New Health Dialogue

We are a broken record about how the cost of doing nothing on health care reform is dire for everyone -- individuals, families, businesses, the federal budget. But states too will suffer enormously in the absence of federal reform. Just ask the governors -- who held their big winter meeting recently and couldn’t stop talking about health reform. National Governors Association Vice Chair West Virginia Gov. Joe Manchin III explained:

States cannot afford to sustain our existing level of health care spending. Governors recognize that it is a critical priority in ensuring the economic viability of our states and the quality of life for our citizens that we work tirelessly to address the current healthcare delivery challenges states are facing.

And those smarties over at CMS said that state Medicaid spending is projected to have grown 9.9% in 2009 -- the fastest rate of Medicaid growth since 2002 -- largely because people are losing their jobs, and then losing their employer-based insurance. The states could not have absorbed several million new beneficiaries without an emergency shot of federal aid under last year's stimulus package, but as of now, that money stops at the end of this year.

It is not just us and the governors and a few dozen credible economists. Even those soft touches over at Goldman-Sachs and Moody’s are joining the chorus. In fact, the Center on Budget and Policy Priorities just released a report arguing that, “Extending federal fiscal relief to states would both bolster the economy and lessen or avert what otherwise may be the most draconian cuts in the history of the history of the Medicaid and CHIP programs.”

The governor of Arizona, as an example, has proposed slashing over 310,000 low-income people from its Medicaid program and, we we noted recently, the state has even considered eliminating hospice benefits to dying poor people. Similarly, the governor of California is looking to scale back its program by 250,000. Both have proposed ending their state’s children’s health insurance programs (CHIP). In Tennessee, the governor has proposed capping Medicaid reimbursement for hospitalized beneficiaries at $10,000. And, up North, Massachusetts may cut restorative dental benefits.

We don’t mind being a broken record, but how much more evidence does Congress need that federal reform must be passed NOW. States will need more Medicaid relief in the short term to get them through the current economic crisis. And then health reform (and an infusion of federal funds) will let them begin stabilizing, expanding, and fixing Medicaid well into the future. And then, we can get rid of this broken record, and maybe find a happier song.