Federal Deficit Reduction Proposals Put Services for People with Disabilities at Risk
Posted on May 09, 2011 by Megan Burke
Members of Congress have important decisions to make regarding the Federal budget and deficit reduction in the coming months. The deadline for a vote to raise the debt ceiling has been moved from mid-May to August. Most people could probably agree that something needs to be done about the federal deficit. Current proposals will harm the disability community, are not balanced between spending cuts and revenue, and do not address the core cost issues. If the current proposals move forward services for people with disabilities will be significantly reduced. The lives of Missourians with disabilities who depend on Medicaid for healthcare and supports will be effected even more severely than when Missouri made cuts to Medicaid in 2005.
Paul Ryan’s Budget Resolution of FY2012:
The House voted to approve House Committee Budget Chair Paul Ryan’s budget plan which includes changing the way the federal government provides funding to states for Medicaid, drastically reducing Medicaid funding by $700 billion over ten years. Currently states receive a federal match for each dollar they spend on Medicaid services. So, if the number of Missourians using MO HealthNet increases (like during the recession) Missouri is able to draw down more federal dollars to help fund the services. Ryan’s plan would change Medicaid funding into a block grant and reduce federal funding to states for Medicaid by 39% in 2022 and 49% in 2030.
Read more about Ryan’s budget plan in an earlier post: Are people with disabilities to bear the brunt of the debt reduction burden?
Resource: Ryan Medicaid Block Grant Would Cause Severe Reductions in Health Care and Long-Term Care for Seniors, People with Disabilities, and Children, Center for Budget Policy and Priorities
Over 300 members of ADAPT took to the streets of DC and the Capitol this week to fight this plan which could put the lives of people with disabilities at unnecessary risk. Read about their efforts here.
Senators Corker and McCaskill have a proposal which would put caps on federal spending. This proposal has received attention in Congress, and would be just as detrimental to Medicaid as Ryan’s block grant proposal. Basically, the bill would limit federal spending to 20.6% of the gross domestic product (GDP) by 2013. Once federal spending exceeds the set limit, automatic cuts to funding are triggered. Our current federal spending is at 24% GDP.
Senator McCaskill has said she does not support block grants. Yet her proposal would be just as harmful. The Congressional Budget Office (CBO) projects that if the cap is reached, Medicaid would sustain a $547 billion cut from 2013 to 2021. Global spending caps do not adjust for recession, ignore the fact that there will be a greater demand on Medicaid as our population is aging, and do not address rising health care costs. In addition, it is a one sided approach to addressing the deficit which does not take a look at revenue needed for essential programs.
If spending caps are implemented, the cost of Medicaid will be shifted to states and to those who need the system most. Some reports state that setting caps could lead to block granting Medicaid to keep from hitting the spending limit. This significant cut in federal Medicaid funding to states will result in wait lists, loss of services, and higher cost sharing (co-pays, spenddown, etc.). Medicaid is a necessary safety net for many people with disabilities as health insurance and long-term services and supports are often unaffordable. In a time when the disability community is fighting for the rebalancing of long-term services and supports from institutions to the community, home and community-based services will be at risk.
Resource: Proposed Cap on Federal Spending Would Force Deep Cuts in Medicare, Medicaid, and Social Security, Center for Budget Policies and Priorities