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.