David Brooks can’t seem to help himself, administering a gratuitous and inaccurate slap at The Shrill One today, but even Brooks acknowledges that we should extend unemployment benefits and help out state budgets, many of which are operating on fumes. Brooks’ plan to aid states, though, is silly: he wants to have more programs like Race to the Top, which is an excellent initiative but far too tiny to yield any real state budgetary relief.
A better way to go about it would be greater Federal funds for Medicaid, which might also yield better health care governance and would have a greater budgetary impact. And politically, the best thing about it is that it doesn’t need 60 votes.
Currently, Medicaid is a federal-state match, usually about 50-50. Skyrocketing health care costs are a big reason for long-term, structural pressure on state governments: more than one out of every six state budget dollars are Medicaid expenditures, and depending upon how you count it goes up to one-fifth. The states can’t just choose to stop spending a lot of this money, because if they did, they’d lose the federal match (although many states are hacking up as much Medicaid as they legally can). If the federal government agreed to increase its matching share, this would significantly ease state budget woes, freeing up this money to preserve state expenditures and services in other areas.
Moreover, because these matching formulas are currently part of the Medicaid legislation, changing them could be done through the budget reconciliation process, avoiding the inevitable Republican filibuster.
I wouldn’t want complete federalization of Medicaid at this point, because that would require substantive changes that could run into reconciliation problems. Besides, this would require yet another vote on abortion coverage (states whose Medicaid programs cover abortions — such as California’s — use only state funds in the accouting); let’s not go there again.
Note how the advantage here is both for the short run — helping out states currently facing budgetary disaster — and long-term. States faced with Medicaid pressures can’t just print more money like the feds can, which means that Medicaid is always a budgetary headache. If we want a more rational and more humane system, that can’t continue.
A good relatively recent summary of Medicaid and state budgets can be found here.