Medicaid is a program run by the Department of Health and Human Services, administered by each State, which provides health care to economically challenged individuals and families and other people who qualify for care.
It makes up 16% of each States’ budget on average, and while it is administered by the States, the rules for running the program are not set by the States. General eligibility requirements and other factors are handled by the federal government. So basically it’s the Federal Government forcing the States to pay for something. Perhaps there are shades of grey to the situation, but ultimately it’s not like most Federal government social programs, which provide money to states who administer desired programs. No indeed, Medicaid is basically the worst of both worlds. It’s federally mandated AND the State has to pay for it.
This wasn’t true of course till last year, around the time that the Health Care Overhaul Bill / Obamacare was passed. Before that time period Medicaid was a voluntary program. But since the bill was passed into law states no longer have the same level of control over the program as they used too. And it’s bleeding them dry. Think about it: 16% of any given state’s budget is going to this single program. That leaves only 84% for education (Schools and Universities), the state judicial (Judges and jails), executive (The Governor and Police Force), and legislative branches, state infrastructure projects (highways and waterways), and the myriad of other things the states do with their money. Now combine that with state budget shortfalls on average of 17% and maybe you can see why this is important.
What’s worse is that the economic downturn has caused more and more people to jump onto the program. That’s right, since more people are out of work, more people qualify for the program so the program becomes more expensive. And the kicker: The states were getting extra money to pay for this program from the stimulus bills and that money runs out this month. Unfortunately for us, the states can’t go into debt like the Fed can. No, they have to balance their budget. So instead of being able to lessen their Medicaid burden, each state will have to cut funds from elsewhere: meaning jobs will be lost in one part of the state government or other, and potentially in the private sector depending on where the cuts hit.
So yeah, next time everyone gets all up in arms about education spending cuts, or transportation projects getting closed down halfway through, please thank the Federal Government instead of your state representatives. More and more the Fed is strong arming policies, and I assure you, as long as the bill stands, it will only get worse.
