Cutting back on Medicaid GOP revolution rolls: Ending Great Society entitlement, turning program over to the states

September 21, 1995

HOUSE REPUBLICANS intent on dismantling Great Society legislation have chosen Medicaid as their latest target. They propose to save $182 billion over seven years -- one of the key elements in their drive to balance the budget -- by capping the federal costs of the huge program, turning most of its administration over to individual states and canceling the concept that the poor, the disabled and elderly who cannot afford Medicare premiums are entitled to government-financed health care regardless of cost.

Democrats already are in retreat on welfare reform and on means-testing Medicare. But whether they can or will make a stand on Medicaid may largely depend on which state they represent. Five of the nation's 30 Republican governors spurned the new GOP Medicaid plan because pending formulas for distributing federal money would hit them hard. Most Democratic governors will also rebel.

President Clinton has sounded the tocsin for battle by charging that the Republican proposals would cause "havoc" in the lives of the 36 million Americans on Medicaid. But such is the momentum of the GOP revolution on Capitol Hill that the administration may have to accept many of its features in showdown legislation.

For Maryland, the annual increase in federal funding would fall from 7.09 in 1997 to 3 percent each year thereafter -- a drop that would force vast changes in the way health care is provided to disadvantaged citizens. While this state has been eager to free itself from a large array of federal restrictions in its handling of the Medicaid program, it does not fare well in the pending GOP measure. If it is passed, state officials would probably have to cut costs by moving recipients of new "MediGrants" into managed care plans. This actually would be in line with directives issued by the General Assembly.

Granted, the GOP plan presents many problems -- not least the prospect of replacing federal standards with a patchwork quilt of state health programs. Nevertheless, the case for stopping the headlong growth of budget-busting federal entitlements is compelling. Unless drastic action is taken, there can be no hope of ending federal deficits that feed a national debt of unsustainable proportions.

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