There’s no precedent for feds dialing back Medicaid dollars

March 5, 2013

In a comment on my post Tuesday morning, one reader asks the question on a lot of governors' minds right now. What guarantees do states have that once the federal government lures them into the Medicaid expansion, the funding won't get slashed?

What does guarantee federal funding? The federal government's track record on dumping unfunded requirements onto the states goes back decades. The federal government's track record of using those same handouts as a carrot/stick goes back since this country was founded.

Right now, the federal government is on the hook to pay 100 percent of the costs through 2016. After that, the match ratchets back, falling to 90 percent by 2020. Wouldn't a federal government — especially one looking to trim a federal budget — look to reduce funds by cutting into that match?

Legally, there's nothing to stop them: Congress could pass a law that fiddles with these numbers. But such a move would, it turns out, be unprecedented. At least in the Medicaid program, there just isn't a history of the federal government "dumping" new spending on the states. Adrianna McIntyre points that out on Project Millennial, with this chart showing the federal share of Medicaid since the program launched.

"Turns out that since Medicaid was passed in 1965, average funding levels have remained flat—and haven’t oscillated outside the 55-59% range since 1980," McIntyre captions.

There is one time the federal government did fiddle with funding levels, in the late 2000s. That, which you can see in the above chart, was to increase their share of Medicaid spending during the recession.

Past may not be prologue; perhaps this Medicaid program, with its higher federal match, will prove more vulnerable to cuts. But, right now, it's hard to say that there's much of a history of feds cutting back on their Medicaid share.

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Brad Plumer · March 5, 2013