Charities Set To Fight President On Budget

Will Lobby Bush On Healthcare

By Ori Nir

Published February 21, 2003, issue of February 21, 2003.

WASHINGTON — Ending a months-long reluctance by major Jewish institutions to challenge the Bush administration on domestic issues, representatives of the nation’s largest Jewish charitable network are gearing up for a fight with the administration over plans to revamp Medicare and Medicaid.

Lobbying efforts are planned at both the federal and state levels by the nation’s network of federated Jewish philanthropies and their national roof body, United Jewish Communities. The protests are not directed at Bush’s overall budget, UJC officials caution, but at specific administration proposals to reform Medicaid and Medicare, the public health insurance programs for, respectively, the poor and the elderly.

Lobbyists for the charities are critical of broader aspects of the president’s social-service budget as well. They say they do not plan to mount a broad fight on other fronts, however, saying the odds of achieving major change are too slim.

On the health care issue, representatives of local Jewish social services agencies are mobilizing on the state level around the country, contacting state legislators and governors to oppose the president’s reported plan to shift key Medicaid decisions from the federal government to the states.

“We are telling local elected officials that that creates an opportunity for the states to abrogate their responsibility of putting up any Medicaid money,” said Diana Aviv, director of the Washington Action Office of United Jewish Communities.

An early version of the plan would have permitted states to limit the number of visits to the emergency room allowed to Medicaid patients per year. That proposal was dropped under protest, but some critics say it may resurface in the new proposal.

In Washington, national representatives of Jewish social services agencies and of UJC have joined a coalition of organizations opposing Bush’s Medicaid reform proposal. Other coalition members include the American Association of

Retired Persons, the National Council on Aging, Families USA and others.

UJC officials say the proposed Medicaid shift would give states too much freedom to balance their budgets by cutting healthcare for the poor.

Aviv said her main lobbying effort was focused on state capitals, because “we think that it begins in the states, although we are also active in Washington.”

UJC officials and others say they are also alarmed at proposed federal budget cuts to a broad range of social services, which they say will hurt their ability to provide aid to clients in wide range of programs. Agencies represented by Aviv’s office provide services to about 1 million people across the United States, through programs funded primarily by the government, which contributes an estimated $5-7 billion per year.

The president’s budget proposal for the 2004 fiscal year, submitted to Congress on February 3, would either reduce or freeze funding for nearly all social services at fiscal 2003 levels.

A freeze “in real terms means a decrease as well, because of the 3.9% rate of inflation,” Aviv said. Moreover, she said, “in all programs, our agencies have to deal with increased costs, and therefore end up with less money,” even though the dollar value of these programs remains the same as in 2003. “There is no program where we see an increase,” she said.

Aviv said that although “this will hurt,” there appears to be little likelihood of winning increased funding for such programs. In any case, she said, “these are all small programs” in terms of funding. “Frankly, we will consider it a success if all funding for these programs ends up at current levels.” To ensure that, her office is lobbying key members of Congress, working together with other interest groups. It is not opposing the Bush budget as a package, however. “That would be very controversial,” Aviv said.

“At the same time,” she said, “if you look at what the administration has floated in terms of reforming Medicaid and Medicare, there we could see some radical changes that could have a profound impact on us, because that is the lion’s share of public funds that our agencies receive.” On this issue, therefore, UJC and the agencies it represents are preparing to wage a pitched battle.

Although the president has not submitted a clear proposal to revamp Medicaid and Medicare, the White House has indicated how it intends to reform both programs.

On Medicare, the president has indicated that he would like to spend about $400 billion in the next 10 years providing prescription-drug benefits to seniors who agree to enroll in competitive health-management plans, which are seen as less costly than the current fee-for-service Medicare plan.

On Medicaid, the White House has indicated that it would encourage lifting virtually all federal restrictions on the ways individual states choose to enroll clients in Medicaid under rules governing state choice. This category comprises about one-third of the 44 million beneficiaries of Medicaid.

The White House also favors decreasing federal involvement in the implementation of Medicaid by granting states a fixed payment, which would be adjusted in accordance with changes in the price of healthcare. This plan would replace the current system under which the federal government subsidizes a share of the care of every patient and adjusts federal subsidies based on the number of Medicaid recipients. The cost of Medicaid, the largest single program in most states’ budgets, increased by 12% in the 2002 fiscal year and will total $160 billion in 2003. Demand for Medicaid is expected to rise even more as a result of growing unemployment.

Most states are suffering their worse financial crisis in more than two decades, and are already cutting spending, raising taxes and tapping into their reserves. If federal subsidies for Medicaid are given to the states without rigorous terms and conditions attached, critics warn, states may be tempted to divert such funds to other causes.

White House staffers say the president is convinced that states know best what policies are most appropriate for their populations.

But critics are skeptical. “The consequences of this kind of block-granting goes beyond questionable management abilities of states, which could lead to wide disparities between states in terms of quality and quantity of social services,” said Anne Kim of the Progressive Policy Institute, a Washington think tank affiliated with the centrist Democratic Leadership Council. “Another consequence is the freedom the states would have to use the money for supplantations. Money will be diverted. This is always what happens with block-grants.”

States have not yet reacted to the White House’s ideas on Medicaid. “Our sense is that most states won’t think this is a good idea,” said UJC’s Aviv. “But some states may be in such desperate financial straits that they will be tempted by getting an infusion of money up front.”

Bush’s drive to shift the burden of social services management from the federal government to the states causes particular concern among service providers in states that participate heavily in funding Medicaid. In New York City, the state picks up 25% of the cost, the city 25% and the federal government funds the remaining half. In some states, federal funds account for 75% of Medicaid costs. “When the state has a deficit of about $15 million and the city is in a $5 million deficit, we are very concerned,” said William Rapfogel, executive director of the Metropolitan Council on Jewish Poverty in New York, whose services are 97% government-funded.

Both Kim and Aviv said they don’t expect Bush’s domestic budget to be approved by Congress as is. They definitely don’t expect his proposals on Medicaid to sail through Congress, they said. This is not so much because of the Democratic minority, which is certain to oppose cuts to social programs, but because some Republicans have now indicated their opposition to some of Bush’s social policies. “We are quietly taking the temperature of some Republican leaders on this,” Aviv said. Her prediction is that “the president will have to scale back, significantly, from what he proposed,” particularly on Medicare.

Kim concurred. Bush’s proposals, she said, “with any luck would be scaled down drastically in Congress because cooler heads will prevail, particularly in the Senate, where moderate Republicans believe in a strong Federal role” to be played in social services. “This is definitely going backward in terms of the role federal government should play in combating social problems,” Kim said, “but it’s not yet the end of the game.”



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