November 4, 2009
By Dennis G. Smith
Medicaid is designed to be a partnership between the states and the federal government. In the Balanced Budget Act of 1997 and again in the Deficit Reduction Act of 2005, states won additional flexibility to run Medicaid and its companion program, the State Children's Health Insurance Program (SCHIP).
But under H.R. 3962, the health bill introduced last week by Speaker Pelosi, the ability of states to run their programs to reflect state variations and preferences would be substantially diminished. Policy decisions would be removed from the elected representatives at the state level and placed in the hands of the federal bureaucracy.
Consolidation of Power
Under H.R. 3962, state authority will be reduced through a number of provisions, including:
State Rebellion Looming
At some point, states will rebel against the reduced role outlined by H.R. 3962. It is unlikely that state officials will simply write checks for a program that consumes 20-25 percent of a state's budget but is run remotely by the federal government. There is much more at stake than adding 15 million people to Medicaid. The balance of power in our federalist system is at risk as well.
Dennis G. Smith is Senior Fellow in the Center for Health Policy Studies at The Heritage Foundation.
Dennis G. Smith
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