Gov. Terry Branstad expressed concern Monday that government health care programs such as Medicaid are taking a larger bite out of the state budget.
Branstad said the federal formula for calculating Medicaid cost shares is penalizing states like Iowa that have growing economies by shifting a greater share of program costs from the federal government to state budgets.
“If your economy is in the tank and your state is badly managed, you get more money,” he said. “That’s not the way we want to run things in Iowa.”
Branstad noted that Medicaid used to make up about 12 percent of the state budget when he was governor in the 1990s, but now it is approaching 18 percent and could go higher under federal plans to expand the program’s coverage in fiscal 2014.
“We’re concerned that Medicaid has been the biggest growing cost to state governments,” said Branstad, who has joined with other governors in seeking flexibility in instituting federal health reforms in order to avoid extra state spending. He said his administration is “very careful and cautious about buying into federal mandates” that may not be affordable, as the president and Congress work through so-called federal cliff financial challenges to cut national deficit and debt.
“This is a Cadillac program. The problem is it is a rusted-out Cadillac,” Branstad said of the current federal Medicaid cost-share approach with states. “We’d like to be able to have a new program that we could together consistent with our philosophy of being the healthiest state where we partner with people and people contributed some to their own health, and then the state also assists them as opposed to a federal program — which is an entitlement where it’s the government’s responsibility and I have no obligation or responsibility for my own health. That’s something we’re trying to change.”
Do you agree with Branstad’s approach to the Medicaid funding issue? Do you think expanding Medicaid eligibility will present a major budget problem for Iowa?