Families USA Takes Aim at Bush Medicaid Plan

Administration Offers Governors "Fool's Gold"

February 17, 2003
Denouncing President Bush's Medicaid budget as a "cruel hoax," Families USA is launching a campaign to influence governors before they head for Washington later this month for meetings with White House and Congressional leaders.

"The President's Medicaid budget represents a cruel hoax," said Ron Pollack, executive director of Families USA. "The President offers a slight increase in Medicaid funding in the first years, but then reduces such funding in the later years. Over the long term, this proposal would significantly reduce the federal aid needed to sustain Medicaid coverage for low-income families."

"The President's proposal offers modest upfront money in a manner that is reminiscent of a loan shark. The modest upfront money comes attached with a heavy cost -- less money in the long run and much less fiscal flexibility in future years," Pollock said. "In effect, the Bush Administration is forcing cash-strapped states to buy into a very bad deal so that they can receive quick money now."

Families USA is also targeting Bush's proposal to give states more "flexibility" in deciding what services and benefit packages they wanted to offer. The plan would be a "disaster for health care in rural America," the group said.

Families USA cited comments by Health and Human Services Secretary Tommy G. Thompson last week, saying that Thompson indicated that states would have the "flexibility" to not offer Medicaid services in rural areas if they were deemed too costly to provide.

"Some governors are undoubtedly tempted by this 'Fool's Gold,' which, under the guise of fiscal relief, offers a small amount of money up front (money that will have to be repaid) and locks states into a block grant of the program. They may overlook the longer-term fiscal straightjacket they'll be in when federal Medicaid funding is reduced in later years," Pollock said.