Van Hollen: In budget balancing, we must preserve Medicaid

Top Democrat on the House budget committee, says health insurance for the poor has a tremendous economic impact

July 25, 2011|By Christopher Van Hollen Jr

Congress is engaged in an ongoing debate on proposals to reduce the deficit. There is no question we need get our fiscal house in order and put our nation on the path to long-term fiscal stability — the question is how.

First, we must ensure that we do no harm to our still fragile economy — anything that would put American jobs at risk is unacceptable. Second, we must find a balanced approach that does not put undue burdens on our seniors and most vulnerable or slash critical investments in education, infrastructure and innovation. Unfortunately, many of the deficit reduction proposals being debated would do just the opposite —battering our economy, killing jobs and essential investments and, at the same time, shredding the social safety net.

One area where that is starkly clear is with the Medicaid program, the state and federally funded health care plan for people struggling near the poverty line. The Republican budget that passed the House of Representatives would impose steadily larger cuts in federal funding to state Medicaid programs — a 5 percent cut in 2013 and a cut approaching 33 percent by the 10th year. Maryland's Medicaid program would lose billions of federal dollars if those cuts were enacted. This plan would not just cut Medicaid but would fundamentally alter its very structure, turning it into a no-strings-attached "block grant" program. This approach would give governors a blank check for pet initiatives and a license to cut support for seniors and low-income kids.

Here in Maryland, draconian Medicaid cuts would be especially devastating because of the great progress we have made in the last four years to expand health care to over 250,000 children, parents and seniors. A drastic reduction in federal Medicaid funding would jeopardize the health of more than 800,000 Marylanders. These are seniors who rely on Medicaid for nursing home care and people with disabilities who would be unable to live in the community without the care and support Medicaid provides. These are pregnant women who need prenatal care and children who count on Medicaid to help give them a healthy start in life.

Walking away from the federal commitment to Medicaid doesn't solve the problem; it just passes health care costs down to states. Because almost every state, including Maryland, is required by law to balance its budget every year, it means cuts in services and more financial strains for already suffering families, cuts in provider payments, lost jobs in the health care sector, and dampened business activity as the consequences of lost jobs and unmet health care needs ripple through the economy.

A recent report released by Families USA looks at what the Medicaid cuts envisioned in the Republican budget would mean for states in terms of lost jobs and business activity. The results are sobering. If Maryland lost just 5 percent of federal Medicaid funds — $244 million in 2011 — it would cost the state $511 million in business activity and more than 4,000 jobs. A 33 percent cut would mean a loss of $1.6 billion in federal funds, $3.4 billion in state business activity, and roughly 27,000 jobs. The first would be a blow to our state's economy, the latter would be devastating.

This month we celebrate the 46th anniversary of Medicaid, when we overcame seemingly impossible political odds to create a program that has literally saved millions of lives in our country and provided much-needed health security. Today, Medicaid gives access to health care to over 50 million Americans. A landmark study recently conducted in Oregon found that Medicaid increases access and use of preventative services, improves health, provides greater financial security, and yields savings for providers. It is a program that helps pay for long-term care for seniors and people with disabilities, provides health care for mothers and children, and creates jobs for thousands of Marylanders. It's a program that helps us all.

It is simply the wrong choice to balance the budget on the backs of seniors and people who are struggling to make ends meet without asking special interests and the wealthiest in our country to pay their fair share. We must make choices that are in the best interests of American families and give a voice to those who oftentimes don't have much sway in Washington. We must protect Maryland and the nation from the devastating cuts that have been proposed to Medicaid.

Rep. Christopher Van Hollen Jr. is the ranking Democrat on the House Budget Committee. He represents Maryland's 8th district.

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