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Thursday, November 4, 2010

Health Care Reform and the New Congress -- A Possible Scale-Back of Medicaid?

There's been a lot of buzz about what changes we might see in health care policy with the new congress.  Outright repeal of the reform package is out of the question, but it's quite possible that there will be several adjustments at the margins, such as a removal of the new 1099 requirement.  It's in both President Obama's and House Republicans' interests to show that they can get some things accomplished, though the big domestic policy initiatives are likely frozen for the next two years.

One potential larger change that I've not heard discussed, and that might actually have a chance, is scaling back the planned expansion of the Medicaid program.  This was a big ticket item in the reform--one of the features that actually did involve a lot of additional direct government spending--and a principal mechanism for getting more people covered. 

Republicans could find some political traction in pushing for such a change, as it would save real money (at least for the government), and the benefits from the expansion are concentrated among the poor, the lower middle class, and the non-elderly--groups that might be less on the President's mind if he continues to lose support among white, better-off, independent, and older voters.  House Republicans could also get some additional political help from state governors.  Despite the reform's provisions to have the feds pick up the tab for the expansion, many governors have been wary of the provision, suspicious that they'll be caught holding the bag down the road.

Bottom line:  Look for Medicaid to get back on the national agenda in 2011.

Update:  Since I wrote this I have read some things about a possible effort by House Republicans to de-fund the entire expansion, but I don't think this is nearly as likely to work--especially with Democrats--as a significant but marginal scaling-back of the expansion itself.  The mechanism for scaling it back would be to lower the income threshold for eligibility.


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