Human Needs Report Article

The Human Needs Report is the Coalition on Human Needs' newsletter on national policy issues affecting low-income and vulnerable populations. It is published every other week while Congress is in session.

Administration-Appointed Commission to Draw Plans for Cutting $10 Billion From Medicaid (5/20/05)

After promising Congressional allies of Medicaid that a commission would be formed to make sound policy recommendations for the program, the Bush Administration has now made clear its intention to appoint all the voting members of the commission on its own. The move follows a months-long struggle on the part of Medicaid allies to prevent arbitrary, budget-driven decisions to cut federal dollars out of the program. In March, Senator Gordon Smith (R-OR) and a handful of other Republican Senators were joined by Democrats in voting to replace budget language cutting Medicaid (similar language was included in the version approved by the House) with language creating a bipartisan commission that would study the program to find ways of making it more efficient. The final resolution that came out of conference included $10 billion in Medicaid cuts over four fiscal years (starting in FY 2007, a year later than most other cuts proposed in the budget). It was understood that the Administration had agreed to establish a Medicaid commission to satisfy Senator Smith and others who ultimately voted for the budget resolution.

Last week, several Senators, including Smith, signed a letter to Health and Human Services Secretary Leavitt asking that the panel be managed by the National Academy of Sciences Institute of Health (IOM) (as Smith and others intended in their original call for a Medicaid Commission) but it was reported that Secretary Leavitt plans to appoint all voting members of the commission himself. According to a New York Times article published on May 12, the commission is to have 15 voting members selected by Leavitt. They will include Leavitt or his designee, federal and state Medicaid officials, former and current governors and other Medicaid experts. The commission will have 18 nonvoting members, including four Democrats and four Republicans from Congress, appointed by Congressional leaders, as well as state and local officials, consumer representatives, and health care providers. Senators who voted for the Medicaid Commission expected that members appointed by Congressional leaders and others would have voting rights.

The charter of the commission, which should include more detailed information, is expected to be published in the Federal Register any day. By September 1, the commission is to recommend changes that will result in the $10 billion in savings from the program. (The commission is to make longer-term recommendations by December 31, 2006.) The committees with jurisdiction over the program, the Finance Committee in the Senate and the Commerce and Energy Committee in the House of Representatives, are instructed by the budget resolution to pass the cuts assigned to them by September 16.

The Senate Finance Committee is instructed to make $10 billion in cuts to programs under its jurisdiction, with the understanding that these cuts will come from Medicaid, by September 16. The House Energy and Commerce Committee is instructed to make $14.7 billion in cuts by September 16 to the programs under its jurisdiction, with the understanding that $10 billion will come from Medicaid (although it is possible that the committee could make the entire $14.7 million in cuts in Medicaid alone). Democrats have pointed out that regardless of what the commission recommends, the ultimate decisions over whether and how to cut Medicaid lay with the committees. Congressional debate and work on Medicaid will therefore continue while the commission conducts its work.

The ranking Democrats on both committees, Representative John Dingell (D-MI) and Senator Max Baucus (D-MT), wrote a letter to Secretary Leavitt on May 10 emphasizing this point and highlighting the fact that a majority of both the House and Senate have indicated their opposition to Medicaid cuts, as have hundreds of organizations at the state and national levels.

The letter states that "Medicaid is not the problem, but rather has been the solution for millions who have lost job-based health coverage over the past few years." They further argue that it "will be difficult, if not impossible, to achieve $10 billion in Medicaid savings without undue harm to vulnerable beneficiaries." Finally, the letter calls for any Medicaid commission to follow five principles: 1) It must be bipartisan. 2) Recommendations must be agreed upon unanimously by its members. 3) Its recommendations must be policy-driven, not driven by arbitrarily-defined budget cuts. 4) The commission must comply with the Federal Advisory Committee Act which assures transparency and opportunity for public input. 5) All recommendations should be accompanied by impact analyses including costs and savings to the federal and state governments as well as effects on beneficiaries and providers.