DC Lawmakers Shifting Fiscal Responsibility to States

Fiscal Responsibility – How Will States Handle Repeal of Medicaid and Loss of Housing and Support Dollars?

Kevin Martone, Executive Director, Technical Assistance Collaborative, recently asked the question, “Can States Take on the Fiscal Responsibility that Federal Lawmakers are About to Hand Them?

The Technical Assistance Collaborative is one of the donors supporting the 2017 Congressional Reception tentatively scheduled for Wednesday July 19th. The Reception will be an opportunity to raise policy questions about proposed changes to federal programs articulated by Kevin’s article.

Writes Martone, “A few weeks ago, I had the opportunity to explain to a roomful of congressional staffers the profound impact that a repeal of Medicaid expansion would have on individuals with substance use disorders – and on the systems that serve them. In the questions that followed, an underlying theme was evident: Would lost Medicaid revenue and other federal resources be replaced by state funds to pay for such services?

“This issue has far-reaching implications for all of our nation’s safety net programs.” Martone is the former Deputy Commissioner for the New Jersey Department of Human Services and in that role was responsible for behavioral health.

Wrote Martone, “My experience as a former state commissioner of behavioral health make clear to me that states are in no position to absorb the transfer of fiscal responsibility they are about to receive from federal policymakers.”

Martone emphasizes that systems work better together, explains what potential issues with shifting the burden to states, and describes some of the hard choices that states may face down the road.

“The availability of federal funding has afforded states the opportunity to improve the lives of millions of children and adults,” writes Martone.

New Jersey was one of the thirty-one states to expand Medicaid coverage. But now those newly and often first-time newly insured and very vulnerable people are at risk of losing the health insurance that has helped them stabilize their lives.

“Federal housing assistance programs have been a critical resource for millions of seniors, people with disabilities, and people living on very little income — though a significant gap remains between available assistance and need.”

The potential repeal of the Affordable Care Act (ACA) and potential of block granting of Medicaid funding to the states would translate into less federal dollars.

And combined with potential cuts to housing programs, the opportunities to expand supportive housing look bleak.

Writes Martone, “Decreases in affordable housing assistance resulting from cuts to non-defense discretionary (NDD) programs like those at HUD will disproportionately affect the same populations impacted by cuts in Medicaid. We don’t have to look too far back to see how this plays out: the March 2013 sequestration cuts forced state and local housing agencies to decrease the number of households using tenant-based vouchers by more than 80,000.”

“Most Medicaid expansion states were in a position to increase coverage only because of significant federal matching.” And if that funding disappears, those newly insured and/or new housing may lose the supports that are keeping the housed and cause a spiral into homelessness.

There is little evidence to suggest that state governments can or will assume the financial responsibility offloaded by the federal government under current proposals.

Yet, it is state and local budgets that must absorb the preventable economic consequences when individuals engage costly, crisis-oriented health care, correctional, and homelessness systems,” concludes Martone.

Can States Take on the Fiscal Responsibility that Federal Lawmakers are About to Hand Them?

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