If Congress federalizes Medicaid and sets uniform national standards, the big losers are likely to be poor people in New York, California and a handful of other northern industrial states with generous programs. These states now account for half the nation's Medicaid outlays.
The big winners, on the other hand, would be the needy in poorer southern states with limited Medicaid programs, states like Mississippi, Alabama, and South Carolina. A uniform national standard would pull up these states and their needy citizens would enjoy improved benefits.
This is one of the principal political problems embedded in President Reagan's proposal to "swap" responsibility for some social programs with state governments.
The eligibility levels and benefits differ so sharply that there are enormous disparities between states. Yet, if there is a single program run from Washington, the federal government would have difficulty providing one level of medical benefits in one state while it paid lower benefits in another.
In California, for example, any family of four whose income was under $7,800 a year as of the end of 1980 was eligible for Medicaid benefits, but in Arkansas the figure was $3,100, according to a government study. A nationally controlled program would be hard-pressed to justify this inequity.
President Reagan didn't say anything about setting national Medicaid rules in his State of the Union address when he asked that the $32-billion-a-year program, now operated by the states with federal financial aid, be taken over completely by Washington.
But many observers believe there will be tremendous pressure in Congress to apply the same eligibility and benefit rules everywhere.
Some administration officials even believe, sources said, that under the Constitution or federal precedents it would be hard to justify letting a program where the United States is footing the entire bill give very good benefits to people in one area and very poor ones in another.
"If Medicaid is nationalized, it would need to be equal in all states. You can't have separate sets of rules and benefits and cutoffs. Congress could not withstand the pressure to equalize," said Jack Amser, of the National Conference on Social Welfare.
And that would squarely raise the question: Do you bring other states up to the relatively generous eligibility and benefit levels now in place in New York, California and other top Medicaid states?
It's a theoretical possibility, but unlikely because it would mean many billions more added to the federal budget.
Secretary of Health and Human Services Richard S. Schweiker said yesterday, in naming a task force on federalism to work out this and other problems, that one estimate is that it could cost the United States as much as $14 billion a year to bring all states up to a uniform level equal to that of the top states.
On the other hand, the government could cut everyone down to some low or middling level. This would mean improved benefits for the southern states, but a tremendous reduction of benefits in states like New York, California, Massachusetts and several others.
These states might then be forced, in order to maintain the level of benefits they already have, to pay out of their own pockets for anything the feds refused to cover. They would therefore lose any financial advantage from the federal takeover of Medicaid and might even be far worse off because the Reagan "swap" proposes that states assume the entire cost of two companion welfare programs, food stamps and Aid to Families with Dependent Children.
This possibility has already occurred to New York's Mayor Edward I. Koch and Rep. Henry Waxman (D-Calif.), chairman of the House subcommittee with jurisdiction over Medicaid.
Koch, in a statement yesterday, said, "I am particularly concerned that a federal takeover of Medicaid would result in dramatic and unfair cutbacks in the program, so that the poor and the elderly would be unable to receive the health care they deserve. I will not support a federal takeover of Medicaid until the president has issued a clear set of guidelines that guarantee that a full range of services will continue to be provided at adequate levels."
And Waxman, in a statement Tuesday night, warned that if in taking over Medicaid the federal government sets standards lower than now operate in some states, the poor could "lose access to important health care services."
Under existing law, the United States does set some standards, but it leaves an enormous number of key decisions up to the states on both coverage and range of benefits.
For example, compare Alabama and California. According to the latest data available, poor people in Alabama are eligible for the cash welfare program--and, therefore, automatically eligible for Medicaid--if a family of four has an income below $2,830. In California the figure was $6,132.
Furthermore, Alabama has had no program for the "medically needy," that is, people not quite poor enough for cash welfare but too poor to pay medical bills. But California's medically needy program covered any such family that had income up to $7,800, or if the family had spent so much on medical bills that it only had $7,800 left. On top of that, California provided 30 different types of optional medical services above that required by the U.S. basic law, Alabama only 12.
Would the new federalized Medicaid program be more like Alabama's or California's? That is what the president and Congress must decide. Billions of dollars hang on the answer and, whatever it is, some will win and some will lose.