April 4, 2003
 

Dear Conferee:

We are writing to express our strong opposition to the inclusion of any cuts to the Medicaid program or the Children’s Health Insurance Program (CHIP) in the final FY 2004 Budget Resolution. Together these two programs provide essential health coverage to more than 51 million infants, children, pregnant women, individuals with disabilities, and the elderly. These programs are not only a critical safety net for millions of families but also contribute significantly to state and local economies by providing jobs and generating business activity. The rate of return per dollar invested in Medicaid ranges from $6.34 in Mississippi to $1.95 in Nevada, and on average the program generates $6 billion in additional business activity and 59,000 jobs per state.

The House-passed budget resolution included a reconciliation instruction requiring cuts of $94 billion to the Medicaid and CHIP programs. These cuts were not included in the Senate-passed resolution or in the President’s Budget for FY 2004. It is clear that the level of cuts called for in the House budget resolution is unsustainable. Congress already cut $54 billion from the program in 1997, and an additional cut of $94 billion would decimate health coverage for millions of American families. It has been suggested that savings of this magnitude could come from the elimination of fraud, waste, and abuse. We do not believe this is a realistic expectation. The 1997 Balanced Budget Act was only able to generate $50 million out of a total of $54 billion in Medicaid cuts from fraud, waste, and abuse policies. Even if additional state and federal resources were devoted to this task it is impossible such activities could generate the $94 billion in savings called for in the House resolution.

Rather than cutting Medicaid and CHIP, Congress should instead shore them up in order to preserve existing health insurance coverage and prevent millions more Americans from joining the ranks of the uninsured. States are currently facing the most severe budget crises since World War II. As a result, nearly every state has been forced to make cuts to existing health coverage under Medicaid and CHIP. Federal funding reductions would force states to implement even deeper program cuts by restricting eligibility, eliminating or reducing critical benefits, and cutting or freezing provider reimbursement rates.

We urge you to reject the inclusion of any Medicaid or CHIP cuts in the final budget resolution. In addition, we urge you to follow the Senate’s recommendation and include sufficient money for state fiscal relief. This relief should not be contingent upon states accepting a block grant of any portion of their Medicaid funding, nor should states be forced to pay it back in later years when program enrollment will increase further because of the burgeoning number of Americans needing long-term care. Health care for infants, children, the elderly, pregnant women, and individuals with disabilities should not be held hostage to the pursuit of ideological goals.

We thank you for considering our views.

Sincerely, /s