Sunday's House vote means there's a new era dawning for health insurance in this country -- but not for tens of thousands of poor children about to lose their coverage, or the hundreds of thousands of poor families about to suffer the brunt of significant Medicaid spending cuts.
That's because while the health care debate has been raging in Washington, the recession continues to rage everywhere else. And state governments across the country are dealing with massive budget shortfalls by reducing spending on the people who need it most, with health costs a chief target.
"If it's a new dawn, it's still night for a lot of people," said Jon Shure, deputy director of the State Fiscal Project at the progressive Center on Budget and Policy Priorities.
"With all the attention on national health reform, the reality for families on the ground is that what's going to matter the most over the next several months and maybe the next several years is the states' budget decisions," said Jocelyn Guyer, co-executive director of the Center for Children and Families at Georgetown University.
The Republican governor and state legislature of Arizona last week made national news when they eliminated the state's Children's Health Insurance Program (CHIP), eliminating coverage for nearly 47,000 low-income children.
It could be the first of several such moves. Although the federal government covers most of the costs of both Medicaid and the CHIP program, more and more states are finding that with tax receipts way down, they can't even find the matching funds they are required to pony up.
Meanwhile, the recession and high unemployment have driven Medicaid enrollment up dramatically -- by 3.3 million people over the last year.
States are dealing with a "paradox of rising public needs at the same time that revenues are shrinking," Shure told HuffPost.
Cuts in CHIP, which subsidizes insurance to children of the working poor, are particularly bitter to swallow for advocates of universal coverage. Until this weekend's vote, the expansion of CHIP last February, after two years of relentless opposition from former president George W. Bush, had been the Obama administration's biggest step forward to health coverage for all Americans.
The Recovery Act included an $87 billion temporary increase in the share of Medicaid that the federal government pays, in return for a promise from states that they wouldn't reduce their eligibility requirements. That fiscal relief "is probably part of why it's not a far more dismal picture," Guyer told HuffPost.
And yet despite that, states are slashing Medicaid spending where they can -- by reducing reimbursement rates to providers and cutting or capping various benefits.
"They're not actually cutting people off but, in some cases, what they're doing is paying providers less, so it's harder for people to get the services that they need," Guyer said.
For instance, in Tennessee, Gov. Phil Bredesen is capping inpatient hospital services for most Medicaid recipients at $10,000. In Nevada, the legislature has put in place new limits on the number of diapers and bed pads available to incontinent Medicaid patients.
But Recovery Act funding -- along with the accompanying restrictions -- is currently set to run out at the end of 2010, raising the possibility that states will remove hundreds of thousands of people from the Medicaid rolls come January.
The House and Senate both recently passed similar but not identical six-month extensions of the Medicaid provisions, raising the possibility that states will be able to "hold steady" a while longer, Guyer said.
Nevertheless, as the Kaiser Family Foundation recently reported, for now:
Many governors' proposed budgets for state fiscal year 2011 include drastic cuts to Medicaid as well as other state programs and state employees.... Medicaid directors see the prospect for widespread program cutbacks in 2011, including eligibility cuts that would affect millions of Medicaid beneficiaries as well as the hospitals, doctors and other providers who depend on Medicaid to pay for health care they provide to Medicaid enrollees.
Progressive voices are arguing for more federal money to be sent to the states overall, as a way of offsetting the economic effect of massive budget cuts at the state level.
Nobel Prize winning economist Joseph Stiglitz, for instance, recently warned that state cutbacks would amount to "a negative stimulus of half the magnitude of the positive stimulus that is coming out of Washington." And groups like the Economic Policy Institute are trying to raise support for additional fiscal relief to state and local governments.