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Governor Walker’s Misleading Claims on Medicaid

April 25, 2011 at 2:30 PM

Wisconsin Governor Scott Walker painted a misleading picture of Medicaid in his New York Times op-ed on Friday.  Medicaid is neither obsolete nor inflexible and changing it to a block grant, as the House Republican budget that Walker supports would do, would significantly harm the millions of seniors, people with disabilities and children who rely on it every day.

Governor Walker says Medicaid is obsolete because it is biased toward covering people in nursing homes rather than their own homes.  In fact, Medicaid is moving in precisely the opposite direction.  In 1990, just 13 percent of Medicaid spending on long-term care went for care in the community rather than in an institution.  By 2009, the figure was 43 percent.  That’s a great example of how Medicaid is changing with the times.

Moreover, health reform, (i.e., the Affordable Care Act) provides several new options to speed this trend along and continues funding for the “Money Follows the Person” program, in particular, which moves people from nursing homes back to the community.  With health reform’s new options and funding, progress will likely continue.  That won’t happen under the House Republican budget plan, which would sharply reduce funding for Medicaid and convert the program to a block grant.

My colleagues, Edwin Park and Matt Broaddus, have shown how risky a block grant is for states.  If the House Republican block grant proposal had been in place starting in 2000, their analysis shows, in 2009 Wisconsin would have received 40 percent less in federal funds – nearly $1.6 billion in that year alone.  With such a sharp drop in federal funds, the state would have been ill-equipped to deal with a recession or even to meet the ongoing needs of an aging population.

Governor Walker claims the success of the Children’s Health Insurance Program (CHIP) and state Medicaid demonstration projects show that states could do well under a Medicaid block grant, but he’s wrong on both counts:

CHIP, which does operate under a structure similar to a block grant, has a narrower purpose than Medicaid, as noted in a recent brief from the Kaiser Commission on Medicaid and the Uninsured.  It covers far fewer children than Medicaid and covers children in families with higher incomes.  Moreover, in the past, some state CHIP programs did run short of funds and had to freeze enrollment and set up waiting lists.

As to Medicaid demonstration projects, they allow states to cover people who are ordinarily not eligible for Medicaid (such as low-income, childless adults) or services that aren’t usually covered (such as short-term, or “respite,” care for families with children with complex medical conditions) as long as they don’t spend more federal funds than they otherwise would have received.  This is nothing like the Ryan block grant, which would slash the federal funds that states would otherwise get to help them run their programs, not hold federal funds steady.


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