Chuck Grassley: “I also wish to discuss a Medicaid provision in the Democrats' economic stimulus package that would provide for an…”

“I also wish to discuss a Medicaid provision in the Democrats' economic stimulus package that would provide for an expansion of the Medicaid program to a new group of individuals. In order to fully evaluate the potential effectiveness of this proposal, it is important to take a look at State fiscal health. The economic slow-down coupled with increased demands on health care safety net programs is creating major strains on State budgets. Just this year, 44 States have revenues below original forecasts; 28 States have implemented or considered Medicaid cuts; 7 States have convened special legislative sessions to address budget shortfalls; and 11 States have determined a need for supplemental appropriations for Medicaid. Today, Medicaid expenditures are 7.5 percent higher than they were in 1999, and on average account for 19.5 percent of State spending. Therefore, Medicaid is a primary target for State budget cutbacks during economic downturns. States have reported a current cumulative revenue shortfall of $10 billion, and predict this number to continue to grow. Moreover, new and unprecedented State responsibilities for homeland security are exacerbating serious fiscal conditions. Therefore, any new State Medicaid option, no matter how generous the Federal match, is not an attractive proposal to States.”