The fact that liberal Democratic New York Gov. David Paterson and conservative Republican Miss. Gov. Haley Barbour find themselves political bedfellows over proposed federal health care reform is indicative of the obstacles the legislation still faces.

The current Senate and House health reform packages would represent the largest expansion of Medicaid since its creation in 1965. The proposed reforms would change Medicaid from an existing federal-state program targeted mainly at children, the disabled, and pregnant women into a Medicare system for the poor.

The proposals would make benefits available for all people with an annual income below $14,404. That exponential expansion of Medicaid is not only going to carry a federal government cost, but a state cost as well.

Across the nation and across party lines, the nation’s governors have been scrambling to determine whether their state budgets can absorb the state match portions of a huge influx of new Medicaid beneficiaries during the current national economic recession.

In New York, Gov. Paterson has bucked his own party by complaining that Democratic health reform legislation taking shape in both houses of Congress might be particularly punitive to state’s with “generous” Medicaid programs that provide services to recipients beyond minimum federal mandates. The Paterson administration has warned that the Democratic health care reforms might drive up state budget deficits as well.

Paterson’s misgivings are being echoed by governors across the country in both the Republican and Democratic parties as those state executives learn that the proposed legislation will require states to pay part of the cost of a broad expansion of Medicaid, the federal-state insurance program for the poor.

Paterson’s advisors recently told The New York Times that their analysis concluded that the House version of the legislation would eventually require all states to pay 10 percent of the cost of newly enrolled Medicaid beneficiaries while The Senate version would require some states to pay more and some less.

But the bottom line is that by 2019, New York state taxpayers would likely pay about 18 percent of the Medicaid costs for new enrollees.

Barbour expressed some of the same sentiments to U.S. Sen. Thad Cochran in a Sept. 8 letter in which Barbour said: ” In Mississippi, the issue of Medicaid expansion hit’s close to home, since our state’s share of the Medicaid program is currently $707 million, or 12 percent of a $5.87 billion state-supported budget, which includes temporary stimulus funds . . .

“Should the reforms being debated in Congress become law, Mississippi would be saddled with an average increase of $360 million in additional costs, on top of the already $707 million it costs to fund Mississippi’s annual state share of the Medicaid program. These proposals, which would cover all individuals at 133 percent federal poverty level, will burden state budgets, forcing states to raise taxes. In Mississippi, that would necessarily mean increases in our state income or sales tax rates.”

Funding Medicaid has been the single most contentious state government issue in Mississippi over the last five years. That fight will escalate when and if the proposed federal health care reforms become law.



Contact Perspective Editor Sid Salter at (601) 961-7084 or e-mail ssalter@clarionledger.com. Visit his blog at clarionledger.com. His talk radio show, On Deadline with Sid Salter, is broadcast on the SuperTalk Mississippi network.