The Stimulus Package and Medicaid

The debate over the stimulus package dominated new sources this week. Although the President has shown consistent support of the almost $800 billion dollar economic recovery plan, Congress has stalled its passage. Over the past few weeks, the stimulus package bounced between the legislative houses and Americans saw many different figures and proposed allocations of money. Finally, a compromise is in sight. According to a recent report on the NPR website, Congressional negotiators reached a deal with the White House. The solution: a $789 billion dollar economic recovery plan that provides tax cuts for the middle class, allots funding for school construction, and divides money to the individual states. Legislators are hopeful that the bill will alleviate the unemployment rate by creating more opportunities in the job market. Not only is the bill a compromise of the House and Senate, but the Democrats and Republicans, too. This proposal received more Republican support than earlier versions, despite some lingering disagreements regarding money allocation.
One point of contention is Medicaid. Medicaid, a federally funded program, “provides health insurance to an average of 58 million low-income Americans,” according to reporter Julie Rovner. The federal government distributes Medicaid funding to individual states for implementation. The current economic crisis has had negative consequences on the government sponsored health program. There is a direct relationship between the unemployment rate and the demand for Medicaid. As the unemployment rate increases, people lose their income and health care coverage, and the demand for Medicaid soars. Unfortunately, “because most states must by law balance their budgets each year, a number of them have no choice except to cut their Medicaid programs, which for many states represents the largest or second-largest budget item” (“Medicaid”). Since access to Medicaid programs is limited, Americans are seeking health care services in the private sector. However, patients are unable to pay for the services, placing a significant financial burden on private health care companies. Without some Medicaid funding, it is likely that the private sector will continue to suffer. To alleviate some of the issues, Congress proposes allocating $87 billion towards the Medicaid program over the next two years. Legislators are confident that increased funding will allow states to shift current Medicaid funding to other areas of need. Some supporters believe that the Medicaid funding will create more job opportunities in the health care field, an added bonus.
Critics of the proposed Medicaid funding argue that the economic recovery plan is not the proper means of addressing the health care problem. One editorial in the Chicago Tribune suggests that due to the complexity of the health care system, a more extensive reform is required. Throwing money at the Medicaid system may have negative consequences, such as reducing competition in the private sector. The stimulus package would extend health care benefits to the unemployed, specifically those who do not qualify yet for Medicare, and provide funding for technological advancements in the field. However, according to one editorialist, “once benefits are extended, it will be politically difficult if not impossible to scale them back to pre-crisis levels” (“Mission”). So, a separate debate continues. Should the government boost federal funding of its health care program and improve the current conditions? Or, should it wait until all branches can agree on a more extensive reform of our problematic health care system?


Articles in order used:
Tedford, Deborah. "Negotiators Reach Stimulus Deal." NPR.org

Rovner, Julie. "Medicaid A Prickly Issue in Stimulus Package." NPR.org

"Mission Creep." ChicagoTribune.com