House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Senate Finance Committee Ranking Member Orrin Hatch (R-UT) today sent a letter to Health and Human Services Secretary Kathleen Sebelius on the administration's major policy reversal on the Medicaid blended rate proposal. The members specifically expressed concern regarding the administration's failure to address the one of the biggest contributors to federal spending and current budget deficits.
The members wrote, "As the Obama administration and Congress debate the best way to address the upcoming fiscal cliff, it is impossible to ignore the role of entitlement spending as we work to strengthen our economy and put our nation on a strong fiscal path. With a $16 trillion debt and four straight years of more than trillion dollar deficits, it's time to acknowledge that entitlement programs are the biggest contributors to federal spending and current budget deficits. This is not a discussion that can be delayed.
"As we have previously noted, President Obama's deficit reduction recommendations last year and FY 2013 Budget proposal reinforced the concerns of many governors that there is a continuing lack of certainty around funding for Medicaid."
Upton and Hatch continued, "The president had outlined a provision that would ultimately decrease the federal match for the newly eligible Medicaid beneficiaries through the application of a single blended rate to Medicaid and CHIP. The FAQs released on Monday represented a major policy reversal away from the administration's blended rate proposed just months ago, and the only rationale offered was the Supreme Court decision that made the Medicaid expansion voluntary for the states. While states now have the option, rather than the mandatory requirement, to expand Medicaid, many worry that the administration's policy shift simply represents a "bait and switch' in order to get states to agree to PPACA's expansions. States should be aware that when fiscal realities later dictate cuts to the Medicaid program, they may be left to finance a larger share of the Medicaid expansions.
"Since the administration first proposed a blended rate in its budget, the country's fiscal position has significantly weakened, and we now face the possibility of another national recession. The lack of certainty and failure to address these challenges head-on only add to the peril surrounding entitlement programs. We hope the administration will engage in serious discussions to strengthen our economy and secure a more prosperous future."