President Takes One Step Forward, Two Steps Back On Medicaid

Conn Carroll / February 11, 2008

There is good and bad in President Bush’s fiscal 2009 budget when it comes to Medicaid. First the good: The President’s budget proposal takes modest but meaningful steps to rein in spending on Medicaid. The President’s budget slows the annual rate of growth in Medicaid’s budget from 7.4 percent to 7.1 percent over the next five years.

Now the bad: The President’s proposal dramatically increases spending for the State Children’s Health Insurance Program (SCHIP) — a sharp departure from its position last year. Instead of keeping in line with its $5 billion over five year proposal, the President’s budget would flood $20 billion over five years into the program — a four-fold increase.

Moreover, its focus on expanding enrollment 2 percent by 2013 changes the dynamic of a block grant program by stressing enrollment over fiscal responsibility. Instead of promoting policy solutions, such as tax credits, that would empower low-income families to purchase private health insurance. This approach implies that the preferred solution for low-income uninsured children is a government-run health care program.