Health Center Federal Policy, Uncategorized

Debt Debate Heats Up…and We’re (Still) Working to Keep Medicaid Out of the Fire

Today is D-Day – Debt Ceiling Day, that is.  As some point today the Treasury is expected to announce that the U.S. government has officially hit its $14.294 trillion debt ceiling; Treasury is also expected to announce that it will begin taking a series of steps to delay a U.S. government default until August 2nd, 2011, which is the current projected ‘drop dead’ date for the country to avoid defaulting on our debt and the day by which Congress must take the all-important vote to extend the debt ceiling.  We’ve blogged before about why the debt ceiling vote has become significant, how it’s being tied to entitlement reforms including possible changes to Medicaid, and why any changes to Medicaid will be critically important to health centers.  The debate has been steadily heating on the debt ceiling and there are a lot of moving pieces to the discussion.  To keep it simple, here’s an update on what we’re hearing from the Hill, and what your Members of Congress still need to hear loud and clear from home while they’re back in the district on recess this week.

A spending cap is still a threat. Thanks to widespread advocacy here in DC and out in the field (thanks to all of you!), support for block granting the Medicaid program may be waning and the notion of a global spending cap is taking some heat in the Senate.  However, we are still facing very real threats that the Medicaid program may fall under a spending or deficit cap of some kind, whether it is global or health-specific.  If there is a spending cap written into law and the Medicaid program is not excluded from it, then the government will enforce swift and certain cuts across the Medicaid program to bring spending down to target levels.  These cuts to Medicaid will go deeper still if Medicare and Social Security are excluded from the cap, as has been discussed by leaders in both parties.  The only way to ensure that Medicaid is protected under a global spending cap will be to exempt it from any debt financing mechanism.

The “Revenues vs. Spending” debate. As negotiations have moved forward with the Gang of Six, the Biden group, and the myriad of other players working to influence the debt ceiling debate, politicos have drawn some lines in the sand about how the government should approach fiscal reform.  Specifically, while Democrats are generally supporting a mix of revenue measures and spending cuts, some Republicans have firmly stated that deficit reduction targets must be reached through spending cuts exclusively.  With no revenue options in the mix, cuts to Medicaid would likely have to be significant. The President has already offered his support for $100 billion cuts in Medicaid in a deficit reduction speech last month.

Restricting Medicaid spending without maintaining health center protections would be devastating. We’ve blogged and posted new resources on the importance of Medicaid to health centers and on health centers’ unique (and cost-effective) Medicaid payment system.  Without assurances that state Medicaid programs will continue to reimburse health centers for their services under a prospective payment system, health centers stand to lose a reliable payer source for over one third of their patients. With more than another third of health center patients with no insurance at all, this would severely jeopardize health centers’ fiscal solvency and operations.  With such high stakes, we’re making the case to Congress loud and clear that if there are any changes to the Medicaid program, health centers’ payment system and service package must be protected and preserved.

We’re following the debate and debt ceiling discussions closely from here in DC so stay tuned to the blog and our website for new resources and information on the proposals circulating Congress and their impact on your local community health center.