Administration’s Medicaid Regulations Will Weaken Coverage, Harm States, And Strain Health Care System

Source: Allison Orris and Judith Solomon, Center on Budget and Policy Priorities, February 13, 2008

Over the last year, the Department of Health and Human Services (HHS) has issued a series of Medicaid regulations that could significantly affect health care at the state and local level. These regulations, most of which alter longstanding Medicaid policies, do not require congressional approval. In fact, in some cases Congress has expressly declined to enact the very same changes that HHS is now making through administrative action.

In addition, in December the Administration issued an interim final rule to implement a provision of the 2006 Deficit Reduction Act. The new rule goes well beyond Congress’s intent in that legislation, and does so in ways that will jeopardize access to essential health services.

Taken together, these regulatory changes will reduce federal Medicaid spending by close to $15 billion over the next five years. Most of these costs will simply be shifted to state and local governments, at a time when states have less capacity to absorb added costs given the economic slowdown and their weakening fiscal conditions.

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