CHARLESTON, W.Va. -- Some people in Washington, including members of Congress, are discussing changes to Medicaid funding that could be dangerous if based on outdated and even wrong information.Twenty years ago, states would game the federal Medicaid system to collect more money. They used targeted tax collections on health care providers who treated Medicaid patients to score more Medicaid funds from the federal government. Those funds then reimbursed the providers who essentially put up the cash in the first place.That system was prone to abuse, so the feds changed the law to prohibit it almost 20 years ago. States, including West Virginia, still tax health care providers to fund Medicaid, but the taxes must be sufficiently broad and uniformly collected, whether health care providers take Medicaid patients or not.Now some in Washington are mistakenly portraying state taxes that support Medicaid programs as wasteful or good candidates for cutting to save money for the federal government.
But Congress should be careful to understand why prohibiting a tax that supports Medicaid would save the federal government money, writes Robert Greenstein, founder and president of the non-partisan Center on Budget and Policy Priorities. It would save money by cutting care for the poorest Americans.
If states have less money to spend on Medicaid, they will indeed qualify for less money from Washington. But that means they will have less to spend on people served by Medicaid, the poorest and disabled adults, very low-income children, and even some low-wage workers.While it would be desirable to simplify and maintain Medicaid funding, simply reducing states' capacity to pay for health care will not lead anyone to prosperity. No state would easily find money to make up such a cut. Many states would have a hard time approving another tax to replace it, and so would doubtlessly cut people from Medicaid. The health of individuals, communities and economies would suffer.If anything, states are (or should be) figuring out how to increase their Medicaid spending as outlined in the Affordable Care Act. Part of the law's requirement to provide access to health care for every American includes expanding Medicaid to more citizens.It is a cost-conscious program. Medicaid payment rates tend to be low, sometimes too low, to the point states periodically struggle to find enough providers to care for people. Medicaid costs tend to rise more slowly than those of other health plans. Medicaid is a smart approach to help reach the goal of health care for all.A federal court ruled that states may choose whether to participate in the part of the Affordable Care Act that would expand Medicaid. To do so, states must find the funds. They'll be even less likely to find it if Congress eliminates states' options for funding Medicaid at even the current level.