Health Center Federal Policy

Top Administration Officials Say “No” To Sweeping Medicaid Cuts

by Heather J Foster, MPH

Last week, top HHS and White House advisors publicly committed to protecting the Medicaid program and providing stable, predictable future funding for the program.  Gene Sperling, the top White House economic advisor, said that the President would oppose any major cuts to the Medicaid program for the rest of his administration.  He did leave open the possibility of minor administrative cuts to Medicaid, but we have no firm details on what exactly those would be.  In advance of another round of negotiations on sequestration and the fiscal cliff, this sends an explicit signal to Members of Congress that large-scale Medicaid cuts are off the table for the White House, and that any deal should not include such cuts.  This also further reiterates that the Blended FMAP proposal, which the White House had formerly put ON the table, is definitively now OFF the table as far as they are concerned.

Equally important, Secretary Sebelius reiterated this stance and publically assured states that the federal government would not back away from its fiscal commitment to Medicaid under the Affordable Care Act’s Medicaid expansion.  This move comes at a time when Governors are weighing the Medicaid expansion—and many have expressed concern that the rug could be ripped right out from under them if the federal government no longer honored its commitment to fund the expansion because of a fiscal cliff deal that limited that funding.  If this happened, states would have to pick up the balance of their newly expanded programs, so some have expressed hesitancy to move forward with the expansion if such a scenario were even potentially on the table.

That being said, we’re not done fighting yet.  We still anticipate a Congressional fight over Medicaid.  Last week, Senator Hatch, Ranking Member of the powerful Senate Finance Committee, included a proposed Medicaid per capita cap in the entitlement reform principles he released.  We will make sure to keep you updated on any proposals moving through Congress—and what such proposals might mean for health centers’ unique Medicaid payment methodology—but in the meantime there is at least some peace of mind from the White House about just how much they are willing to give, not to mention that states can move forward with the Medicaid expansion without fear that funding source being imminently cut.