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Friday, January 14, 2005

More warning signs that federal Medicaid dollars may shrink

[Tony Pugh, "Medicare, Medicaid in dire financial states," Knight Ridder Newspapers, The Wichita Eagle, 13 January 2005.]

The states are not the only ones struggling to maintain bloated Medicaid programs. The federal government may act soon to put a stop the spending binge, and states need to act quickly to prepare:

Social Security may top the Bush administration's domestic agenda, but Medicare's financial problems are more dire and Medicaid's are more immediate.

Members of Congress, state lawmakers and local health officials nationwide are bracing for probable White House plans to cap or cut federal Medicaid funding in order to trim the federal budget deficit. The Bush administration could also revisit its failed 2003 effort to transform Medicaid into a block grant program, in which states would get a fixed amount of federal funding and would have to make up any program shortfalls themselves. Currently, if state Medicaid costs increase, federal funding increases to keep pace.

For Senate Budget Committee Chairman Judd Gregg, R-N.H., and House Budget Committee Chairman Jim Nussle, R-Iowa - both concerned about federal spending for benefit programs - Medicaid could be first in line for cuts, said Ron Pollack, president of Families USA, a liberal patient-advocacy group in Washington.


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