Politics of Medicaid dangerous territory

Gov. Haley Barbour is knee-deep in that snake pit right now.

The program faces a $90 million deficit due not to state overspending or anything irresponsible, but from federal rule changes. This has been developing since 2005, but additional federal funding after Hurricane Katrina and other means kept it in the black.

The governor is right that the Legislature has not addressed the issue, and now is pressing it. Well, pressing it is an understatement. He called a special session to attempt to get lawmakers to approve a plan to tax hospitals to increase federal matching funds and plug the hole.

The great divide
Meanwhile, House Democrats, led by Speaker Billy McCoy, have proposed a cigarette tax, among other measures. They are calling the hospital tax a “sick tax” and say it will be passed along to hospital users and will result in higher insurance rates.

Both sides say the other is wrong on the facts and the policy. Neither side has the votes; neither side is budging.

Barbour now says he will have to cut the Medicaid budget by some $375 million to solve the deficit problem. Lawmakers return to Jackson on Aug. 4.

All in all, Barbour’s hospital assessment, or provider tax plan, has merit. It is good policy for providers to pay into a program that they receive many times over in matching funds.

And, definitely, House Democrats are correct that the cigarette tax should be increased. It is the third lowest in the nation and smoking adds to the Medicaid costs.

But the policy and the politics are two different things. Barbour doesn’t have a policy problem when it comes to funding Medicaid; he has a political problem.

David Hampton
7/13/8