In my previous post, I shared some concerns that Rep. Lora Hubbel raised about someone in state gov’t agreeing to take $1 million grant from the Feds to establish health care exchanges. As TC so helpfully pointed out — it was Governor Mike Rounds who took the $1 million. Confirming what Rep. Hubbel said had happened.
Now the problem in my mind (and I believe in Rep Hubbel’s as well) isn’t whether or not a health care exchange is a good idea or even if it could be money well spent…..it’s how that $1 million may have eliminated the possibility that SD could apply for a waiver for other much more costly requirements of the Federal Health Care law — for instance the Maintenance of Effort (MOE) requirements under both the older stimulus package (ARRA) and the new Health Care law (PPACA) that require the State to continue spending at levels that are not sustainable. The GOP governors and governors elect (including Gov Daugaard) wrote the Obama administration laying out the problem
Medicaid enrollment is up. Revenues are down. States are unable to afford the current Medicaid program, yet our hands are tied by the MOE requirements included in ARRA and PPACA. The effect of the federal requirements is unconscionable; the federal requirements force Governors to cut other critical state programs, such as education, in order to fund a ?one-size-fits-all? approach to Medicaid.
Specific to South Dakota – the letter continues
South Dakota estimates it will cost at least $99.7 million in state funds through 2019 to comply with the Medicaid requirements of the PPACA.
This burden coupled with the inability to change other parts of the Medicaid program due to the MOE requirements will result in rate cuts to providers.
Providers that cannot absorb these cuts may stop taking people eligible for Medicaid, or may stop providing services altogether.
So — here we are again — we had to face a budget shortfall this year and make hard cuts because when the stimulus money was provided, Governor Rounds and the legislature decided the quick payout of federal money was good — of course in the long run the stimulus dollars cost the state because of MOE requirements didn’t allow SD the flexibility to make choices that would have avoided this year’s $127 million hole and the “dreadful” 6% cuts to education or 10% and higher cuts to other agencies and programs.
So the question isn’t will the $1 million be well spent….it’ll get spent….but what does it cost us. According to the Governors’ letter….we can start running the tab at $99.7 million.