March 13, 2003

ACTION ALERT

MEDICAID BLOCK GRANTS

Please contact your U.S. Senators and Representatives and urge them to provide immediate relief for states struggling to meet Medicaid needs by supporting the bipartisan "State Budget Relief Act of 2003." The legislation, S138/HR816, provides an increase in the Federal Matching Assistance Percentage (FMAP).

In addition, urge your legislators to oppose efforts to block grant Medicaid through the "State Health Care Partnership Allocations" legislation. This proposal will only serve to dismantle Medicaid.

To find your elected officials, go to http://www.congress.org/.
To read the text of the legislation, click here and go to http://thomas.loc.gov.


Medicaid is the leading provider of health care coverage for the nation's low-income families; however, only a little more then half of the nation's poor benefit from the program. In almost every state, low-income adults without children have very little chance of being covered by Medicaid. The State Children's Health Insurance Plan (SCHIP), created in 1997, provides health care coverage for children who come from low-income families ineligible for Medicaid but unable to afford private insurance.

Currently, most states are facing budget shortfalls exceeding $60 to $85 billion for fiscal year 2004, the worse deficits since World War II. With rising numbers of uninsured and double-digit increases in health care costs, states face even more financial hardship. State Medicaid programs serve as an important safety net for vulnerable children, families, senior citizens and people with disabilities by ensuring access to critical health and long term care services. However, the current economic situation leaves states with little alternative to cutting these vital programs.

The Federation's Jewish Community Relations Council (JCRC) holds that Medicaid must remain universally available to the poor and disabled. We support adequate funding levels to attain this goal and oppose block granting of the Medicaid program to the states.

The Jewish Council for Public Affairs (JCPA), the national umbrella organization for 132 JCRCs and national member organizations, has been working with coalition partners in support of the bipartisan "State Budget Relief Act." The bipartisan bills, S138 and HR816, would provide states with immediate assistance without forcing them to change their current programs. With the additional funding, states would be able to increase their Medicaid enrollment due to rising unemployment, and prevent gaps in health insurance coverage. Under the State Budget Relief Act, states would also be able to retain SCHIP, a program that would be lost under the block grant proposal. The bipartisan bill gives immediate relief to states without forcing them to pay it back in years to come, while guaranteeing that Medicaid recipients are properly insured.

The President's proposal, "the State Health Care Partnership Allocation," ties federal fiscal relief for the states to the restructuring of Medicaid and SCHIP. States that accept the assistance ($12.7 billion over 7 years) will be required to enter into an agreement with the federal government to block grant Medicaid and SCHIP. Under the new plan, states participating in the program would not be subject to existing federal rules regarding the benefit package, cost-sharing, enrollment, and other features of the program. These federal rules are essential to ensure that Medicaid recipients can access the care they need.

In addition, with a block grant, federal funding to each state is capped. Therefore, even with an increase in demand, the programs included in the block grant will not get increased funding. Some argue that block grants provide states greater "flexibility." However, without sufficient funding, the only flexibility for states is in deciding which programs will be cut. This block grant will force states to ration care by limiting the number of people enrolled in Medicaid, reducing the services covered, and increasing the amount of money low-income people must pay.