Another Battle in the War on Medicaid: Medicaid Blended Rates
Posted on July 01, 2011 by Mandy Beals
Our leaders in Washington are yet again attempting to undercut one of the most vital programs that people with disabilities rely on: Medicaid. In an effort to “save the federal government money” the White House administration has proposed changing how the federal and state matching system for Medicaid works. This would ultimately weaken the federal government’s responsibility to support their share of Medicaid. In turn, the 60 million Americans who rely on this program for their health needs and independence, people with disabilities, children, low income families, and the elderly, will be forced to bear the burden of these costs.
What is the Blended Rate?
Currently, state funding for these programs is matched at different rates by the federal government. For example, the federal government pays Missouri 63% of the Medicaid costs and 74% of CHIP costs. This new proposal will replace these matching rates with a single “blended rate” for each state. This new rate will be set at a level much lower than what states currently receive. Proponents of this proposal say that “the simplicity that comes with one matching rate will cut the red tape, paperwork, and bureaucratic hassles that cost states tens of millions every year.” However, the truth is that these administrative savings would be slight, and the majority of savings would come at the expense of Medicaid beneficiaries and providers. In the end, states will be forced to reduce or eliminate Medicaid coverage and cut provider payments.
A Blended Rate will not Provide Savings, It only Shifts More Costs to Cash-Strapped States
While officials in Washington claim that this measure would provide savings, this is not true. While the federal government will be able to pay less into state Medicaid and CHIP programs, this will do nothing to confront the underlying costs and health needs of citizens. It simply shifts the costs that the federal government has traditionally paid onto already cash-strapped states. These “savings” to the federal government are ultimately just more costs to people with disabilities who rely on Medicaid for their wheelchair or assistive device; people with disabilities who need Medicaid in order to access long term care; and people with disabilities who count on Medicaid for the freedom and independence that they gain from using home and community based services that allow them to live in the community.
The Blended Rate Proposal May not Provide Fair or Accurate Rates for Each State
Another challenge to this plan is that it will be almost impossible for the federal government to set fair and accurate rates for each state. In order to determine how much federal matching money a state will receive, federal officials will have to make a prediction about future enrollment and expenditures. These assumptions will be full of uncertainty because they will not be based on any real experience. They could very easily be off the mark and not adequately cover many people who use Medicaid services. This could lead to strong disputes between states and the federal government about inadequate matching funds.
What Reduced Federal Support for Medicaid Means for You:
Cuts in Federal Medicaid Spending Could…
1. Hurt States’ Economies and Result in Job Loss
- Even a 5% cut in federal Medicaid spending would result in the loss of $13.75 billion that is needed to support health care for vulnerable residents. This will dampen business activity and job creation at a time when states need it the most. (Families USA)
2. Put millions of Americans with disabilities at risk of losing their long-term care.
- Medicaid is often the ONLY avenue that people with disabilities have to access long-term care services. 198,000 Missourians with disabilities depend on Medicaid for their long-term care.
3. Put millions of people with disabilities and seniors at risk of losing their freedom and independence in the community
- 3 million seniors and people with disabilities are able to live in the community because of Medicaid services. Deep cuts will put these people at risk of losing the freedom and independence that every person deserves.
- In Missouri, 83,000 people with disabilities would be at risk of losing home- and community-based services under Medicaid.
4. Without Medicaid, people with disabilities risk losing access to wheelchairs, prosthetics, and other assistive devices that are necessary for their everyday independence.