Congress Postpones Medicaid Cuts, Pushes Instead for Expansion

WASHINGTON–In the wake of Hurricane Katrina, Congress is
postponing legislation that would cut Medicaid and is instead
considering expanding federal funding of the program.

The fiscal year 2006 budget resolution had a deadline this
Friday for the House Energy and Commerce Committee and the Senate
Finance Committee to produce legislation that would reduce $35
billion in federal entitlement spending–including $10 billion from
Medicaid–over the next five years.

“At a time when millions are displaced and seeking federal and
state assistance, we believe it is inappropriate to move forward on
… a legislative package that would cut funding for Medicaid, food
stamps … housing and education,” Sens. Gordon Smith, R-Ore.;
Olympia Snow, R-Maine; Jeff Bingaman, D-N.M.; and Blanche Lincoln,
D-Ark., wrote in a letter last week to Senate Finance Committee
Chair Charles Grassley.

Although the original cuts may now be delayed by a few weeks,
some legislators point out they are still necessary, citing a need
to balance the budget–especially with the costs of Katrina adding
up. Congress has already approved $62.3 billion in hurricane aid,
and many experts are estimating that federal costs for the disaster
could pass $100 billion.

Meanwhile, proposed legislation in the House and Senate aims to
expand federal Medicaid funding to states that suffered damage from
Katrina, as well as to states hosting evacuees. With tens of
thousands of victims fleeing the Gulf Coast region, some states
have warned that they will have trouble providing health care to
hurricane survivors if the federal government does not foot the
bill.

“The states directly affected by Katrina, and those hosting the
survivors, will not be able to put up their match payments due to
the fiscal crisis that Katrina has created,” said Lincoln, who
introduced a Senate bill that would have the federal government pay
the full costs of Medicaid in Louisiana, Mississippi and Alabama
and the full costs of victims from those states who enroll as
Medicaid recipients in other states.

Reps. John Dingell, D-Mich., and Sherrod Brown, D-Ohio,
introduced the House version of the bill.

Other priorities also are shifting on Capitol Hill as fallout
from Katrina’s devastation mounts. Health care legislation
including information technology bills and a Medicare payment
increase for doctors are expected to be put on hold for now.