Capps Condemns Bush Administration's Misguided Medicaid Regulations

Press Release

Congresswoman Lois Capps (D-CA) condemned the Bush Administration's misguided regulations that would make sweeping changes to Medicaid, known as MediCal in California, and further undermine the nation's largest low-income health program. Capps cited a new report released today by the Committee on Oversight and Government Reform, The Administration's Medicaid Regulations: State-by-State Impacts, which details the impacts of seven regulations recently issued by the Centers for Medicare & Medicaid Service (CMS).

"Medicaid plays a fundamentally critical role in the lives of low-income individuals, people with disabilities and their families," said Capps. "The services provided by Medicaid constitute one of the most important government safety nets, serving some of the most vulnerable members of our society - the poor, the disabled, and the elderly. Unfortunately these harmful Bush Administration regulations significantly hinder our ability to properly serve the millions of Americans who depend on Medicaid. In particular, I'm worried about the impact of the regulation regarding school-based health services that provide local school districts with reimbursements for transportation and administrative costs so students with special needs can attend school with their peers. The effect of the school-based regulation amounts to a loss of $130 million in California this year alone and would deal a stunning financial blow to our schools when they are already reeling from the State of California's proposed budget cuts."

Although Medicaid is the largest health care program operated by the states, the Bush Administration has failed to provide any estimates of the state-specific impacts of its regulations. After several unsuccessful attempts by the Oversight Committee to obtain these important state estimates from CMS, the Committee requested an analysis from Medicaid State Directors on the impact of the CMS regulations on their state.

The report finds that the state estimates of the fiscal impact of the CMS regulations are significantly higher than the $15 billion impact projected by the Bush Administration for next five years. States estimated that the regulations would reduce federal payments to them by nearly $50 billion over the next five years, more than three times the Bush Administration's estimate.

The large discrepancy between the state estimates and the CMS estimates is evidence that the regulations are likely to have a much larger fiscal and programmatic impact on state Medicaid programs and state budgets than people realize. California's State Medicaid Director estimates that California will lose 10.8 million in federal funding over the next five years, a devastating loss of revenue at a time when California is experience a significant budget shortfall.

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