More Medicaid Dollars to The States As a Bridge to Health Reform?


More Medicaid Dollars to The States As a Bridge to Health Reform?

Wednesday, June 9th, 2010 - 8:04
Wednesday, June 9, 2010 - 07:37
States are clamoring for -- and in some cases assuming -- more federal Medicaid dollars to make their still reeling budgets whole.

As a story in Monday's New York Times points out, states continuing to struggle from lackluster tax receipts are clamoring for more federal Medicaid spending to keep their budgets afloat. In some cases, states have already penciled in the enhanced spending to balance their budgets despite a vociferous debate continuing to rage in Congress about whether the country should continue its deficit spending.

The new health care reform law uses increased spending on Medicaid to expand coverage. But that spending doesn't really get going until 2014. One way to look at the current debate over increased Medicaid spending, Jack Meyer points out, is to ask whether it should be viewed as a bridge in health spending to tide states over until the real spending in health reform begins in 2014.

With state tax revenues continuing to sag, there is a strong case to be made that increased Medicaid dollars in the near term -- perhaps for the next year or so -- could help states continue to climb out of the recession. But at some point, even those in favor of deficit spending know that the U.S. must begin addressing its deficit. Knowing when to do so represents a tough balancing act.

As calls asking for more Medicaid spending pour into Senate offices, should the federal government turn back the spigot or decide that 2014 is simply too long for states to wait?