A Dangerous Proposal in the Debt Limit Deal to Cut Medicaid or Render It Ineffective

[Better Believe It]

The “Blended Rate” – A Dangerous Proposal in the Debt Limit Deal to Cut Medicaid or Render It Ineffective
By: David Dayen
July 6, 2011

.... And the Center for Budget and Policy Priorities has the best explanation of what the Medicaid blended rate would do. Essentially, if you strip away the jargon, this would reduce the federal share of Medicaid and the Children’s Health Insurance Program (CHIP), forcing the states to reduce provider payments or reduce coverage in their programs.

The proposal would replace the various matching rates at which the federal government reimburses states for their costs in insuring people through Medicaid and CHIP with a single “blended rate” for each state. A state’s blended rate would be set at a level that provided the state with less federal funding than under current law, thereby saving the federal government money.

Combined with this is a proposal to limit or bar states from raising taxes on medical providers to make up the costs. Forty-six states currently use provider taxes, and would see a key source of revenue for Medicaid and CHIP lost. These combined limits – restricting federal dollars for Medicaid through a different rate of payment, and banning provider taxes – have the effect of forcing states, which have less money to sustain their programs, and no way to raise that money outside of stressed general revenue pots, to cut back their Medicaid and CHIP programs. This lowers federal costs even more. The total target for the reductions is $100 billion.

What does this mean in the real world? It means that poor people and children will either have less generous health care services through Medicaid and CHIP, or that providers will see their payments cut again, which could lead to a lack of access to those services. Medicaid reimbursement rates are already as low as you can get. So cutting them even more could represent a tipping point, where providers simply refuse to accept Medicaid patients.

Read the full article at:

http://news.firedoglake.com/2011/07/06/the-blended-rate-a-dangerous-proposal-in-the-debt-limit-deal-to-cut-medicaid-or-render-it-ineffective/

[defendandprotect]

1. K/R ---