Bush plans renewed assault on Medicaid

The proposed federal budget calls for cutting $60 billion from projected Medicaid spending over the course of the next decade. Overall, the austerity budget is directed at boosting military spending and extending tax cuts for the rich, while seeking to compensate for the resulting deficit by cutting back or eliminating funding for education, health care and other social programs that aid the most vulnerable layers of society.

Cuts in Medicaid will be one of the main ways that the administration restrains spending on non-discretionary programs, which include Social Security and Medicare. They account for nearly 45 percent of the total amount slated to be squeezed out of these programs.

On February 1, in his first speech since being confirmed as the administration’s new secretary of health and human services, Michael Leavitt described the administration’s planned assault on Medicaid. The new wave of cuts will have a severe impact on many of the 50 million elderly, children, poor and disabled people who depend on Medicaid to pay for needed health care.

Medicaid is funded jointly by the states and the federal government, with the federal government paying between 50 and 77 percent of the total bill, depending on the state. Medicaid now costs over $300 billion a year, including both the state and federal portions. The share paid by the federal government is expected to reach $190 billion this year, less than half of the defense budget.

Outlays for Medicaid have increased by 63 percent over the past five years, due largely to the economic downturn that has affected millions of working people and poor, increasing the number of people eligible for Medicaid. In 2004, total spending by all states on Medicaid surpassed total spending on education for the first time.

Each of the states manages and runs its own Medicaid program. So far, the main impetus for cuts has come from state governments. At the same time as Medicaid costs have increased, states have faced declining revenues due to a combination of tax cuts and the economic slowdown. State governments are required by law to balance their budgets, meaning that any reduction in revenue must be met by a cut in spending.

The Medicaid law, passed in 1965, mandates that certain individuals must be covered and that certain services must be provided in all state Medicaid programs. These include health care to poor children and to elderly and disabled individuals who fall below very minimal income levels. However, these individuals account for only a third of total Medicaid spending. Most states provide “optional” services to other people in need, including many disabled and elderly people. These optional services are the immediate target of attack.

According to Families USA, a health care advocacy group, optional beneficiaries include 6 million working poor adults, 5 million children, 3 million seniors, 2 million people with severe chronic disabilities and 3.5 million additional adults and children with medical bills that take up most or all of their income.

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http://wsws.org/articles/2005/feb2005/medi-f08.shtml