The Republican health care plans brought forward by both the House and now the Senate are attempts to dismantle the Medicaid program. The changes would force state budgets to either pick up the tab or cut services to their frail populations. Is North Dakota in a position to take on more of Medicaid's funding? That is an important question to consider while Congress debates health care reform.
Often people simply equate Medicaid to poor people. The misconception is Medicaid is simply welfare. Not accurate. Medicaid funds many services for children, women, working individuals, keeps rural hospitals afloat, and sets the rate for North Dakota nursing homes. These vital services are funded jointly by the federal government and states. Currently, the funding for traditional Medicaid comes from an equation known as Federal Medical Assistance Percentages (FMAP). Over the last decade, when North Dakota's budget grew, our state and federal share became approximately 50-50. The state's share picked up because we could afford it. Under current federal law, states cannot receive less than a 50% federal match.
Medicaid Expansion, a new program under Obamacare, expanded eligibility for coverage in states who adopted the program. In 2013, North Dakota expanded Medicaid to a lot of people's surprise. It was renewed this year, and approximately 20,000 North Dakotans have benefited from its passage. Under current law, the federal funding will be phased down to 90% by the year 2020. States will pick up the other 10%. If the GOP changes being offered to Medicaid Expansion take effect, North Dakota would need to increase their Medicaid spending by 400% to make up for federal cuts according to Republican U.S. Senator Bill Cassidy of Louisiana.
Though the Medicaid funding formulas are different, one thing is common; both rely heavily on constant federal involvement. Under the current GOP plans in Congress, that federal funding would be capped or put into a per person formula putting more pressure on state budgets to either increase their expenditures or cut services to individuals and hospitals that so desperately rely on it. Which begs the question if North Dakota is in an ideal position for this? My answer: absolutely not.
We saw the dramatic downturn in our state's budget over the last few years because of volatile commodities and poor fiscal management by the Republican-led Legislature. To make the budget balance this session, they cut services and dug deep into budgetary reserves. The method does not look to be sustainable over the long run and for future budgets.
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The decrease in federal funding to Medicaid doesn't mean the cost of providing these services will go down. In fact, costs will likely continue to rise. Is the legislature prepared to fill that gap with increase general fund dollars? I'm not confident they are. Governor Burgum and legislators themselves should not be eager for these federal changes.
If these changes, supported by Congressman Kevin Cramer, take effect and the state can't afford the new budget burden, then what? Where do children with disabilities receive speech therapy? How does your elderly parent stay independent in their own home without their care providers? Where does your grandparent go when the nursing home can't afford to hire enough staff? What is your hospital going to do when people lose their expanded Medicaid coverage so patients rely on emergency room care which adds debt to your provider? All of these questions deserve answers before undertaking the dramatic changes being rushed through Congress.
North Dakota is not in a situation to pick up these costs unless a dramatic uptick in our economy occurs. Even then, it would take a little more to cover this expense to help our neighbors, rural hospitals, and nursing homes. Political courage being one.
