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State Medicaid, AIDS Program Experiences A Lesson In "Pure" State Control

January 16, 1996

AIDS Action Network Alert

A little over three months ago, the political clamor in Washington, D.C., centered around Medicare reform, $245 billion in tax cuts, and very little else. The congressional threat to Medicaid went mostly unnoticed by a nation -- and unreported by media outlets -- that could not distinguish one "M" program from another. Today, Medicaid reform, specifically whether control over this 30-year-old program should be ceded to the states in the form of largely unregulated block grants, has emerged as the most intractable philosophical issue separating the President and Congress in the ongoing budget negotiations. For AIDS advocates nationwide, this issue has taken on added significance as we have witnessed the results of "pure" state control over Medicaid and AIDS-specific programs in Missouri, New Jersey, Ohio, Texas and elsewhere.

President Clinton has pledged full support for Medicaid's entitlement status and for continued federal cost-sharing in a program that finances basic health care and prescription drugs for this country's most vulnerable citizens, including half of all people living with AIDS and 90 percent of women and children with AIDS. Meanwhile, congressional Republicans, responding largely to demands from Republican governors, seem equally committed to ending Medicaid's tap into the federal treasury. Under the GOP's "Medigrant" alternative, each state would receive one check each year as the entire federal Medicaid contribution, a contribution that would be reduced by more than $117 billion cumulatively between fiscal years 1996 through 2002. Just as troubling is the proposal under the Medigrant plan that would repeal all minimum federal standards relating to coverage, benefits, quality of care and consumer protections. In effect, this would leave the states with total freedom to define their own assistance programs and would thus fulfill, in the words of Rep. John Kasich (R-Ohio), chairman of the House Budget Committee, the "restoration of power back to people in local communities."

This willingness to trust entirely in the kindness and wisdom of the states -- in Medicaid as in many other health and welfare programs now being eyed for potential block granting -- puts at risk many vulnerable Americans. What's the problem? Why can't we trust the states to do what's right, even with reduced expenditures? Numerous counter-examples around the country show just why this block-granting-without-strings can be disastrous.

The most common state government response to AIDS has been disappointing at best, and often negligent in the extreme. A few states, New York among them, devote substantial amounts of state tax dollars to AIDS care and treatment. In many other states, however, where state legislators are allowed the "flexibility" to act alone, as in defining optional benefits under Medicaid for people living with AIDS, the results on occasion have been catastrophic. In Missouri, for example, only a lawsuit brought by AIDS advocates in the late 1980s forced the state Medicaid program to pay for the anti-AIDS drug AZT commonly prescribed for use by people with AIDS. More recently, under the flexibility of existing federal standards that leave many Medicaid coverage choices entirely up to the states, the Medicaid programs in South Carolina and Texas pay for a patient to be on only three prescriptions at any given time, this even though advanced AIDS or terminally ill elderly patients often require ten or more prescription drugs to keep them alive. Even worse, another 14 states do not provide any prescription drugs under their Medicaid programs: in the absence of federal minimum requirements, states can choose, and they have done so.

The troubles in "pure" state control are not confined to state Medicaid programs. Note the troubles that many localities, including Washington, D.C., and Newark, have had in implementing the Ryan White AIDS emergency relief program. Federal authorities overseeing the District of Columbia's program have been so distraught over its failure to spend federal money quickly on AIDS services that they have threatened to bypass the District government entirely by putting the program into trusteeship. In Ohio, meanwhile, the AIDS unit of the state health department -- operating with and distributing federal funds to local groups for HIV prevention services -- has been shut down and is now under investigation by the Ohio Highway Patrol. These are serious problems generated by the failure of local and state governments across the country to do what is right, problems that can only be corrected by meaningful federal standards and tough federal oversight of how federal money is spent.

From its inception, the federal government has been charged with assuring the common, national good. In an epidemic that knows no state boundaries, that affects all of our families and communities, the way to approach Medicaid and other vital prevention and care programs is not just to punt the issue to the states and hope for the best. The goal, instead, for effective, efficient government, is to use federal funding as a means to replicate good programs, such as those instituted in New York State and elsewhere, and to discourage less effective ones. Simple block-granting without tough federal oversight and high standards, of Medicaid or anything else, does not serve the common good. In AIDS, and in all areas of disease control, the costs of block-granting without accountability are measured in lives needlessly shortened and lost. Take note, please, Mr. Kasich: when you raise revenue, you have an obligation to see that it is spent well, and wisely; and when your revenue sustains the lives of people with AIDS or tuberculosis or cancer, that obligation is serious in ways that the Medigrant proposal, as well as other block-granting proposals, do not begin to appreciate.

For more information, contact
AIDS Action Council
1875 Connecticut Avenue NW #700
Washington DC 20009
202-986-1300 x3042
202-986-1345 (fax)
202-332-9614 (tty)

Mark Barnes is executive director of AIDS Action Council. Founded in 1984, AIDS Action represents more than 1,000 community-based AIDS service organizations nationwide, and is the only national organization devoted solely to lobbying the federal government on AIDS policy, legislation and funding.

This article was provided by AIDS Action Council.
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