A proposal on the Bush administration's 2004 budget plan would radically change how the Medicaid and state children's health insurance programs are financed and operated and could have wide-ranging effects on health care in New Mexico.
Currently, Medicaid is an open-ended program in which the federal government reimburses states for health care costs based on each individual state's per capita income.
The new system would fund state Medicaid programs with a block grant, or fixed allotment, effectively placing a cap on how much money a state could receive from the federal government.
"Under the president's proposal, this federal guarantee to share in the costs [of Medicaid] with New Mexico, as well as other states, would end," said Joan Alker, senior researcher at the Health Policy Institute, Georgetown University.
According to the Kaiser Commission on Medicaid and the Uninsured, Medicaid is the largest source of federal financing to the states - accounting for 43 percent of all money received. The commission has also produced reports which show that Medicaid covers the poorest and most vulnerable populations nationwide, including 35 million children and their parents, eight million disabled people and more than six million low-income seniors.
According to the group's mission statement, the commission functions as a policy institute and forum for analyzing health care coverage and access for the low-income population and assessing options for reform.
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If the proposal passes as part of the president's budget, New Mexico would be at a "marked disadvantage," said Nancy Koenigsberg, legal director for the New Mexico Center on Law and Poverty.
Koenigsberg said about 24 percent of New Mexicans are uninsured, but New Mexico receives one of the lowest disproportionate share hospital rates - which help states pay for care for people who do not have insurance - in the nation.
"Rising medical costs and increasing numbers of people in need of Medicaid will result in increased costs," Kim Zamarin of the Human Needs Coordinating Council wrote in an e-mail to New Mexico journalists. "The only way a state could stay in the black then would be to slash benefits and/or eligibility. In the case of New Mexico, it would mean tens of thousands of vulnerable individuals and families having significantly reduced care or no care at all."
The National Governors Association Task Force on Medicaid Reform, of which Gov. Bill Richardson is a member, is currently considering whether or not to endorse the Bush proposal, Alker said.
She added that the Bush administration will not accept a recommendation from the task force that does not include some type of cap on federal Medicaid funds.
"Richardson has been a strong opponent of the plan because of its impact on New Mexico," Zamarin wrote. "The task force, however, is under great pressure to produce a recommendation favorable to the president's proposal and there are indications that some of the task force members have begun to waiver in their opposition."
The task force is expected to make its recommendation sometime in the next two weeks, Alker said.
