THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, June 4, 1995 TAG: 9506030011
SECTION: COMMENTARY PAGE: J4 EDITION: FINAL
TYPE: Editorial
LENGTH: Medium: 56 lines
Republican plans to balance the budget depend on squeezing hundreds of billions in savings from Medicare and Medicaid. Seniors may make Medicare cuts difficult. So far, equally strenuous opposition to Medicaid reductions hasn't been obvious, but it could be coming.
Medicaid is often imagined to be a health-care safety net for the poor alone, but a recent Wall Street Journal report carried the reminder that it's more.
Two-thirds of Medicaid recipients are poor women and children. But they receive only one-third of the benefits.
Two-thirds of Medicaid dollars pay for nursing-home care for the elderly who have exhausted other resources, and for the disabled.
Medicaid covers one in 10 Americans, 25 percent of children, 33 percent of births, 50 percent of nursing-home care.
That adds up to a huge - though diffuse - constituency. Republican budgeteers tend to downplay the impact of slowing growth to under 4 percent a year. But since health-care costs and the number of new beneficiaries have been pushing up the demand at a far higher rate, something will have to get squeezed to produce $175 billion in projected savings over seven years.
The obvious options are (1) fewer benefits for patients, (2) higher costs for patients in order to make up the shortfall or (3) fewer patients eligible for benefits. In all three cases, patients get whacked.
Since there are 36 million patients covered by Medicaid, a lot of votes are at stake. Normally, the specter of so many perturbed voters would stay the hand of Congress. But that's the beauty part about downsizing Medicaid.
Its expenses are shared by the states and the program is administered by them. Congress would shift more of the responsibility to states by the use of block grants. States would receive a set amount of money and states would decide which benefits to cut, what prices to raise and who to declare ineligible. If voters are irate, they may direct their ire at state, not Washington, politicians.
Some governors have begun to worry about being left holding the bag. Florida's Lawton Chiles has been especially outspoken. He complains that states like Florida that have already cut wasteful Medicaid spending will be penalized for frugality while those that have been less responsible will profit. That's because the block-grant-allocation formula will be based on present spending. The lean will get less; the bloated more.
The budget has got to be balanced. Everyone has got to shoulder a share of the burden. But politics is politics. The larger the interest group affected, the harder the cuts are to make. If state officeholders, the poor and seniors all rally to the Medicaid cause, significant cuts could be very hard to make. Especially if corporate welfare, farm subsidies and tax breaks for special interests continue to escape unscathed. by CNB