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Concern About Medicaid — Federal Cuts Looming
Juanuary 18, 2005

Potential action by the new federal congress related to Medicaid has professional organizations and advocates concerned for sustainability of the program. FamiliesUSA, among others, have released alerts and information related to the potential “capping” of Medicaid dollars — a move the Bush administration is considering as the president attempts to ensure that earlier tax cuts are made permanent, Social Security is restructured without loss of benefits, and more funding is available for defense. The ability to pay for proposals of that nature requires cuts elsewhere in the federal budget — and safety net programs such as Medicaid are under consideration.

Capping federal Medicaid contributions – also known as block granting – makes the delivery of Medicaid funded services by states more difficult. Currently, when state Medicaid costs increase so does the federal contribution to the state program. Capping the contributions by the federal government means that regardless of state need and expenditure, only a limited amount of resources would be available. State governments, then, must determine how to address service needs with even fewer resources. Most believe the only way to do this will be to cut eligibility and access to treatment.

In November 2004 Senators Jeff Bingaman (NM) and Patty Murray (WA) organized a letter to President Bush urging that Medicaid not be cut. Forty-five senators signed on to the letter. The Senate will be challenged to not pass budget resolutions or reconciliation bills that cap and cut Medicaid. Since that time, groups such as the National Mental Health Association, the National Governor’s Association, and America’s Health Insurance Plans have requested that President Bush not consider the restructuring of Medicaid in any budget proposal.

Contact with President Bush and Pennsylvania Senators Arlen Specter and Rick Santorum (neither of whom signed the November 2004 letter) regarding this issue is encouraged by all organizations involved in the Medicaid program. Washington DC contact information for both senators is included below. Members are encouraged to share their concerns regarding the effects of capping Medicaid for vulnerable populations in Pennsylvania, especially those in treatment. Information about the impact of Medicaid in Pennsylvania is attached in the fact sheet developed by FamiliesUSA. More information about the federal fight over Medicaid can be found in the Medicaid Action Center at www.familiesusa.org or by contacting Kris Ericson or Melissa DiSanto Simmons at PCPA.

Senator Arlen Specter
202-224-4254
Email: arlen_specter@specter.senate.gov

Senator Rick Santorum
202-224-6324
Internet email form: http://santorum.senate.gov/emailrjs.html

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