Florida Medicaid: Already Cut to the Bone…And Now Facing Threat of Compound Fracture

What currently poses a bigger threat to Florida’s health care safety net: legislative or congressional proposals to undermine the Medicaid program?  That’s actually a trick question, to which the answer is, unfortunately, a combination of state and federal threats.

With Republican proposals to undercut Medicare in Congress facing strong opposition, the pressure on Medicaid has only intensified. As the program providing health coverage for only the very poorest and often sickest children, seniors and people with disabilities – individuals with few resources and no political clout – Medicaid is a far easier target than Medicare.  

As a result, proposals that cut Medicaid and put Medicaid recipients at risk remain squarely on the table in Congress.  Among them:  the conversion of Medicaid to a "block grant" program (capping federal funding to states) and the elimination of the "maintenance of effort" requirement (allowing states to tighten eligibility).

And with a deadline on raising the federal debt ceiling looming, even President Obama has indicated a willingness to consider cuts to Medicaid as part of a compromise, perhaps trimming $100 billion from the program over the next decade.  The mechanisms discussed for exacting these cuts include a so-called "blended rate," whereby the various federal matching rates for different components of Medicaid and the Children’s Health Insurance Program would be replaced with a single statewide match rate. Although that may seem like a helpful simplification of Medicaid, it would facilitate an across-the-board federal funding cut, and perhaps even set the stage for a block grant.

Meanwhile, most states -- including Florida -- began new fiscal years July 1 amidst continuing recession-fueled budget shortfalls.  Because Medicaid is funded through a state-federal partnership and the federal stimulus funds have dried up, the Medicaid program has already been hit hard.  Although Florida and all states have great flexibility in running their Medicaid programs now, many governors, including Rick Scott, have been demanding more.