THE BLOG
06/22/2010 09:42 am ET Updated May 25, 2011

Put Aside Politics-Extend Medicaid Aid to States

It's time for federal legislators to put aside partisan politics and pass legislation to extend federal Medicaid aid to the states.

Across the nation, Democrat and Republican governors have come together to plea with Congress to extend $24 billion in additional federal Medicaid aid to the states, the majority of which are facing severe shortfalls in their 2010-11 fiscal budgets in the wake of the Great Recession. This is not a new program or an expanded entitlement; it is simply a six month transition to help states survive the continuing recession.

Without the additional funds, vital programs and services nationwide will face severe cuts since these dollars are used to sustain entire state budgets, not just health care programs. Most states have anticipated this extension, and without it States will not be able to balance their budgets.

Pennsylvania Governor Edward G. Rendell has been one of the nation's champions for this aid, and rightfully so, because here in Pennsylvania, we have so much to lose.

Without the aid, Governor Rendell has said that 20,000 state and local government employees may lose their jobs, from social workers to police officers to firefighters to teachers -- not exactly the kind of stimulus that triggers an economic recovery. Thousands more who provide direct care in hospitals, nursing homes, and child care centers will face a similar fate.

Without the aid, child welfare services and programs for people with mental and physical challenges will be cut back. Nearly 90 percent of hospitals will face cuts, especially those that care for our most indigent people.

I'm particularly concerned about the impact this will have on nursing home residents - not only in Pennsylvania, but around the country. Governor Rendell has said Pennsylvania nursing homes will face draconian cuts without the federal aid - and rest assured, Pennsylvania nursing homes will not be alone if the aid doesn't come.

Because Medicaid is the largest payer of long term care, with roughly two-thirds of all nursing home residents across the country funded through Medicaid, this will have serious and negative effects on the frail and sick elderly who call nursing homes their home.

Even without further cuts, nursing homes in virtually every state face shortfalls when caring for Medicaid residents. In Pennsylvania, nursing homes are forced to absorb an average loss of $14 per day - or $5,000 a year - for each Medicaid resident. In other states - for example, Illinois, Massachusetts, Minnesota, Nebraska, New Jersey, New York, Rhode Island, Wisconsin and Wyoming - the shortfalls are much higher.

Nursing homes care for our most fragile elderly - those who are too sick to safely receive care at home. They are also the health care provider that is most dependent on government funding. Nearly 80 percent of their residents are funded through Medicaid (64 percent) or Medicare (14 percent) and nursing homes have already been challenged with $14.6 billion in Medicare cuts from the health care reform legislation passed earlier this year. Unlike other providers, they have little wiggle room for recapturing shortfalls elsewhere, except to charge their small percentage of private pay residents a higher rate, which only forces those residents to spend down their assets faster and ultimately, to become dependent on Medicaid themselves. Again, not exactly the kind of stimulus that triggers an economic recovery.

Without adequate Medicaid funding, nursing homes struggle to hire and retain qualified, compassionate caregivers, and risk losing the quality gains they have accomplished in the past decade. Without adequate funding, it's only a matter of time until the elderly have difficulty obtaining care. Here in Pennsylvania - one of the nation's 'oldest' states - access to nursing home care is already becoming an issue in some areas.

It's true that granting the federal Medicaid extension to states only pushes back by six months the day of reckoning for states, when they have to find a way to balance their budgets and pay for their services on their own. And yes, we must curb our debts and deficits, but the short-term extension of the stimulus Medicaid funding is necessary to provide a transition. It will allow states to protect their already fraying social services safety nets and plan for the day when additional federal aid disappears, while also giving the economy a little more time to continue its slow recovery.

One thing is clear: while all Americans will feel the impact of the budget cuts, should Congress not approve this federal aid, it's the most vulnerable among us - our elderly, our children, our disabled, our working poor families - who will pay the highest price.

It is now time for our federal legislators--republicans and democrats--to follow the lead of our governors and put aside partisan politics and pass legislation that would extend this aid for another six months. Joining together to vote "Yea" will prove to be not only good policy, but it will ultimately prove to also be good politics.

Stuart H. Shapiro, M.D.
President and CEO
Pennsylvania Health Care Association
sshapiro@phca.org