National Health Law Program Breaks Down the Federal Budget Threats to Medicaid

As always, NHeLP is committed to helping state advocates protect state Medicaid programs. NHeLP will continue to devote resources to this effort, and engage in strategic litigation to defend the Medicaid program across the country. In addition,NHeLP will continue to defend against efforts to eviscerate the Affordable Care Act?s Maintenance of Effort provision ? a crucial protection to maintain Medicaid eligibility acrossthe states.Unfortunately, however,the tragedy of quantitative Medicaid services or eligibility cuts may be dwarfed by the truly catastrophic budget proposals under consideration at the Federal level. Below, you willfind a description ofthe problematic FY2011 budget process,followed by a description ofthe FY2012 budget process whichmay be the greatestthreatto Medicaid in the past 15 years.
Currently, there are two budgetary processes in motion. The first is the effort to pass a budget for the 2011 fiscal year which started on October 1, 2010. Since October 1, legislators have passed a series of six temporary short?term budgets known as ?continuing  resolutions? while they try to come to agreement on a final figure. The current Republican position is for a $61 billion dollar cut to the baseline budget for 2010. This matches the amount passed by the House on February 19. There has been negotiation with Democrats(and the Obama administration), and it is widely reported that the Democrats first offered to compromise with a cut in the range of $11 billion followed by another offer with an additional $10 billion included, and that subsequently there was a advanced conversation with Republicans on a figure in the range of $30 billion for the remainder of FY2011. (Ironically,the $30 billion figure is almost identical to the number that Republican leadership started with at the beginning of the FY2011 process, before heavy right?wing pressure moved them to $61 billion). There are a couple of complicating factors, however. The first is that Republicans have pressed for the inclusion of legislative riders which are included in the House budget and which attack a wide range of key Democratic  interests,such as funding for health reform and family planning services. The second far greater political problem is that Republican leadership is again under significant right?wing pressure to make a no compromise deal, and has thus started backing away from acknowledging any progress towards compromise ? and the Tea Party has planned a rally for tomorrow, March 31,to further increase the pressure.
The current continuing resolution expires on April 8. And, due to rulesthe Republicans passed requiring 72 hours of advance proposal and debate,the effective deadline for a FY2011 budget deal is April 5. It seems unlikely a deal will be finalized by April 5 (or April 8), and thus another continuing resolution is more likely. Itis expected thatthe new continuing resolution would be for a very short time frame (about a week),to keep both sides close to reaching a deal. If no deal isstruck, and no continuing
resolution is passed,then the government would shut down ? thisresultis notimpossible, but seems lesslikely since both sides considerthat a shut down would be damaging to them.In the big picture, both sides aremoving closerto a deal for FY2011, and while it will involve large cuts, it is not currentlymoving in the direction ofthemassive cutthemost aggressive Republicans were seeking for 2011 and beyond. Assuming the Tea Party does notsuccessfully derailthe Republican leadership?s negotiated progressthusfar,the 2011 budget will not likely be the vehicle forthemajor attack on Medicaid.
The second budgetary processinmotion isfor Fiscal Year 2012. Thisis where the fundamental structure of the Medicaid program is under the greatest threat. Itis expected that on or around April 4, House Republicans will issue their FY2012 budget proposal, and thatthey will push itfor a floor vote within a week ortwo afterthat. Itis possible this proposal?stiming could complicate the FY2011 deal, or it could simplify it by providing Republicans ?cover? for a compromise on FY2011. It is currently unknown what exactly will be in the FY2012 proposal, and itis possible thatthe actual legislative strategy will not be apparentfromthe numbersin the proposal.However,the Budget Committee Chairman, Republican Paul Ryan, has been very clear in his support for the end of the entitlement structure of the Medicaid program, and has also suggested significant changes to Medicare and Social Security.

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