August 3, 2015
By Star-Ledger Editorial Board
Christie’s solution to growing Medicaid costs: Dump the problem on state budgets.
More than two years ago, when Chris Christie finally decided to accept federal money to expand Medicaid in New Jersey, he said, “I will make all my judgments as governor based on what is best for New Jerseyans.”
My, how times have changed. Christie the presidential candidate has since pitched a draconian plan to cut federal Medicaid spending nationwide, which would land like a grenade on our state budget, and utterly devastate our health care safety net for the one in five New Jerseyans on Medicaid who are poor, elderly and disabled.
Christie claims the federal government could save more than a half trillion dollars over 10 years with his plan, because he would impose a cap on federal funding per beneficiary that would grow more slowly over time than the projected growth in federal Medicaid spending. He would base this cap on current per capita costs of the program, and allow it to grow at the general inflation rate.
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Problem is, his plan wouldn’t make the growing costs of Medicaid suddenly disappear. It would just dump the burden on state budgets. And there would be a bigger loss to the state each year. By the 8th year of the plan, it would cost New Jersey as much as $3 billion a year to make up the difference, a recent analysis by the think tank New Jersey Policy Perspective calculated.
And while conservatives talk loudly about “out of control” Medicaid spending, the truth is, this is already a lean program. Its costs per beneficiary are well below those of private insurance. Medicaid has lower reimbursement rates, and unlike the private sector, the state doesn’t have to put money into advertising or make a profit. There is also a lot of flexibility under Medicaid for the state to develop more cost effective programs, like the waiver New Jersey got to care for more of our elderly and people with disabilities in the community.
That’s the right solution to cost growth in Medicaid. Not converting it to a block grant for states, as Paul Ryan has proposed, or imposing a per capita cap like Christie is pushing. That just shifts the risk and costs to states like ours, and takes the problem out on our most vulnerable. To compensate, we’d likely have to slash Medicaid’s already meager benefits, kick very poor people off the rolls, squeeze other programs like schools and roads, or raise taxes. Or all of the above.
Christie’s per capita cap is actually a recycled idea that dates back to the 90s, but it’s again under serious debate in Congress, so there’s a good chance it could wind up in legislation. That’s what makes his proposal so worrisome. Most governors oppose such extreme cutbacks. Now, House Republicans have an example of a governor pushing the idea, even though it would be a disaster for his own state budget.
But we knew already that Christie will do anything to woo right wing voters, whether or not it hurts people in New Jersey. That’s why he won’t raise the gas tax, even as our transportation system falls into broad decay. That’s why he defunded Planned Parenthood. That’s why he’s strangled the medical marijuana program with senseless bureaucratic rules. His Medicaid proposal is just one more example.