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Medicaid Overhaul Unpopular; Lawmakers Not Giving Up

June 6, 2011

AUSTIN, Texas - Despite a new poll showing the majority of Americans don't want big changes to Medicaid, Texas lawmakers haven't given up on efforts to wrest control of the program from Washington.

State legislators during the current special session have revived a bill that would instruct the federal government to give Texas its share of Medicaid dollars in lump sums, allowing more flexibility in how the money's spent. If passed, the plan would still need federal approval. That's a tough hurdle as long as the White House and the Senate are controlled by Democrats.

So far, only the GOP-led U.S. House has said "yes" to such an overhaul of Medicaid, in a budget that also would cut the program by a third. States could get by with less money, Republicans argue, if it came in the form of block grants.

Kathleen Stoll, director of health policy for the consumer group Families USA, disagrees. She says states, and ultimately families, would bear the burden of a shortfall.

"A block grant does not provide more flexibility; that flexibility exists now. It simply shifts costs. If you've got a tornado that hit and a lot more people on Medicaid, you're going to have to foot the bill yourself."

The Texas measure says the state should decide who's eligible for Medicaid, set co-payment levels, and generally encourage "a culture of individual responsibility" by using various private-sector ideas to overhaul the program.

A new study by the Kaiser Foundation shows that about 60 percent of Americans want to keep Medicaid in its current form, and just over half don't want federal contributions cut. It's a level of support similar to that for Medicare and Social Security.

Julie Weckel, with the National Association of Social Workers, says some lawmakers seem to think reducing entitlement spending would somehow reduce the need for care. They're fooling themselves, she says.

"If we don't provide for the basics of survival - housing, food, basic medical care - how is it that we can say that we're this great nation, when we are taking away the supports that are needed for our most vulnerable?"

Currently, Medicaid is an open-ended program, with federal funds covering 50 to 80 percent of each state's expenditures. Texas ranks 49th in reimbursement rates, meaning the gap between the cost of care and Medicaid payouts for that care is the second-largest in the nation.

National survey results are at bit.ly/iFLcbm.

A study on the state impact of the GOP plan is at bit.ly/jbAOxE

Peter Malof, Public News Service - TX