The Free Press, Mankato, MN

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April 27, 2008

Our View — Medicaid shouldn’t be shifted to counties

The U.S. House of Representatives served local taxpayers well last week when it voted overwhelmingly to block a Bush Administration plan to shift federal spending on Medicaid to counties and the state.

That so many Republicans — almost two-thirds — voted to block implementation of the plan shows how unfair the plan is. A Free Press in-depth report a few weeks ago showed how counties and the state would have to take over costs on a number of child protection cases, shifting hundreds of thousands of dollars of federal spending onto local taxpayers. The shift came about through rules the administration can implement without the consent of Congress.

The plan the House passed may stave off that shifting.

The Bush plan was touted as a way to save $13 billion in what the administration considers wasteful Medicaid spending. But the policy reality was that, for example, child protection workers in counties in Minnesota would no longer be paid through Medicaid, a healthcare program for the poor. Instead, counties and the state would have to take over paying for what has always been a federal responsibility.

All 50 governors have tried to stop the implementation of the rule, including Gov. Tim Pawlenty, head of the National Governors Association.

“Some of these regulations already have become effective and current state estimates of the impact could be as high as four times the administration’s $13 billion estimate,” Pawlenty told the Associated Press.

Sens. Norm Coleman and Amy Klobuchar have written the administration opposing implementation of the new rule. Congressman Tim Walz was co-author of the legislation that passed the House. The entire Minnesota congressional delegation voted in favor of the bill.

Bush has threatened to veto the measure, but the House and likely the Senate have enough votes to override a veto. The two-thirds of Republicans in the House joined every voting Democrat to pass, by a vote of 349-62, a one-year moratorium on implementing the rules.

While it should always be a goal of government to reduce waste and abuse, the rules didn’t seem to offer a clear plan to finding wasteful spending. It simply shifted all the costs of operating the required child protection programs to the states and counties. Currently, these programs are funded through a partnership between states, counties and the federal government.

Some of the new rules are worthwhile and could indeed save money. That’s why a one-year moratorium on the plan makes sense. That provides time to tweak the plan so as not to unduly and unfairly shift costs to the state level.

And the House legislation calls for making up for the lost savings to the federal government by tightening oversight on some other programs in the meantime. Thus, the House is again following its paygo rules to not add to the federal deficit when passing new legislation.

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