Feds propose to solve budget problems by shortchanging NC Medicaid: The “blended rate”

Watch out North Carolina.  Our Medicaid program, which pays for health care for lower-income older adults, people with disabilities and children, could get much more expensive.  Why?  The federal government is looking for ways to cut the federal budget and the latest idea is to shortchange the states.  The federal government currently picks up about 2/3rds of the total cost of Medicaid in NC.  While the exact details are still unclear, under this new proposal one thing is certain:  NC would get less money from the federal government and would have to make major cuts to Medicaid.

The so-called “blended rate” proposal is being presented as an administrative simplification that combines the different percentage of costs that the federal government pays for various state health programs into one number.  But as the folks at the Center for Budget and Policy Priorities have convincingly demonstrated, this is really just a big cut to Medicaid funding.  There are no winners and losers among states either – all states will inevitably see less money.

What’s happening here is that the Obama Administration is grasping at just about anything that will significantly cut the federal budget in the current discussions with Congress over trying to raise the debt ceiling limit.  With Republicans continuing to insist that no revenues can be a part of the equation in the budget negotiations, this sort of major cut suddenly shows up.  Of course, if Congress did nothing over the next few years, the federal budget would be in balance but that would mean letting all the Bush tax cuts expire and going back to 1990s tax rates.

When budget cutting its easier to pass the onus of doing the unpopular cuts onto the other guy.  That’s exactly what’s happening here and the increasingly silly refusal of GOPers to acknowledge that raising taxes and closing tax loopholes has to be a part of any federal budget solution along with program cuts is making it worse.

3 Comments

  1. Alex

    June 30, 2011 at 4:21 pm

    If we went back to Pre- Reagan tax rates, it would only generate $700 billion over the next 10 years- hardly enough to balance the budget. Sorry Adam, but you will need to sharpen your pencil a lot more. In fact, even if we taxed everyone at full income , it would still not be enough to balance the budget

  2. Single Payer Action

    July 1, 2011 at 10:27 am

    Universal Health Care: Can We Afford Anything Less?
    Why only a single-payer system can solve America’s health-care mess.

    http://www.commondreams.org/view/2011/07/01-3

  3. Adam Searing

    July 1, 2011 at 11:17 am

    Alex – those charts on the tax rates v. budget needs are from the Congressional Budget Office, not me. Basically, letting the Bush tax cuts expire, the savings from the ACA, and – most equally politically difficult to the tax cut expiration for everyone – letting a scheduled huge cut to doc payments under Medicare go into effect – all combine to solve our federal budget problems for the next few years. I don’t think all this is going to happen, but that’s just the baseline if Congress took no action.