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Monday, February 27, 2017

Think It Can't Get Worse? Now The Medicaid Bomb Starts Ticking; GOP Reform Proposal Called "Catastrophic" for NM, Plus: John Sanchez: Damned If He Does And Damned If He Doesn't 

At least the budget debacle can't get worse, right? Everything bad that can happen has already happened, right? Unfortunately. . .

Even after an oil price crash, a years-long anemic economic recovery and a slowdown in crucial federal spending--even after all that--there's still another budget bomb that could go off--Medicaid.

Legislators in Santa Fe are so busy trying to plug the budget hole for the next year that they don't have time to think about what would happen if the Republicans in congress radically revise Medicaid--the free health insurance program for low income housholds--into a block grant. But it could happen, and then what?:

Changing Medicaid into a per-capita funding program and eliminating expansion could reduce federal spending by $1.4 trillion over 10 years, according to Avalere's analysis. Governors are wary of overhauling Medicaid because it's the largest source of federal funding for states.

The Feds pay New Mexico from $3 to $4 for every dollar it spends on Medicaid. Some $6 billion is being spent here to fund the program. If the funding formula is changed under a block grant program, as the GOP' is proposing, Democrat Senator Martin Heinrich, not one given to hyperbole, says the results here would be "catastrophic":

. . . We would see tens of thousands of people who have insurance either through the exchanges or through Medicaid expansion kicked off of their coverage. In addition it would be, financially, a disaster for the state. Literally billions of dollars flow (here) because of the ACA. That would be lost revenue. It’s of a scale that could not be made up at the legislature. . . Block grants mean defunding Medicaid expansion, not funding expansion. . . Medicaid is incredibly important for the kids covered, but it’s also how we cover much of our nursing home [expenses]. These things will have enormous impacts on people’s lives. The plan that’s been put out so far by House Speaker Ryan would be an absolute catastrophic disaster for New Mexico.

An "absolute catastrophic disaster" may be avoided as Republicans stare into the fiscal abyss. Gov. Martinez was huddling with fellow Governors in DC this weekend, discussing  all this with the new Secretary for Human Services. Martinez was one of  several GOP Governors who signed off on Obamacare which included the Medicaid expansion  that led to soaring Medicaid enrollment. Almost one million New Mexicans now receive coverage--nearly half the state. It was a move widely panned by her own party but received warmly by others who pointed to the state's chronic poverty and lack of health coverage.

If the worst is realized and Medicaid is turned into a block grant or chopped in another way that costs New Mexico a billion or more yearly, Martinez probably won't be around to see the impact. Her term ends at the end of '18. But the new Governor would. Maybe that's one reason why there are relatively few candidates thus far for the open governorship. Who wants to deal with this mess?

SIDEBAR

A sidebar on Sen. Heinrich and healthcare. One of our readers reports seeing Heinrich TV spots aimed at limiting damage inflicted on him when he voted with the majority in January against an amendment "that would have allowed pharmacists to import identical—but much less expensive—drugs from Canada and other countries." Heinrich cited safety. His critics on the left cited his campaign contributions from Big Pharma. Heinrich is up for re-election next year.

DAMNED AND DAMNED

Lt. Gov. Sanchez
And then there's Lt. Governor John Sanchez. Talk about damned if you do and damned if you don't. A successful run for Governor touting Martinez's economic record seems out of the question given the state of the state.

Maybe that's why he's also eyeing a run for the ABQ congressional seat being vacated by Dem US Rep. Michelle Lujan Grisham who has already announced a Guv run. But given its demographics and recent history, a Republican taking the ABQ seat is as likely as the Lobos going to the NCAA this year.

Whatever the case, Sanchez's campaign (for whatever it turns out to be) was buying ads on Facebook last week showing him as the Acting Governor and signing legislation for emergency funding so jury trials could continue. Of course, even that is tricky for Sanchez. Hardcore fiscal conservatives are calling for even more budget cuts, no matter the consequences.

Right now John Sanchez is looking like a round peg facing a wall of square holes. How he handles that peg is going to be intriguing to watch.

BUDGET DRAMA

Who knows what last minute budget drama Santa Fe will conjur up but there is a  scenario developing that one of our readers thinks is worth keeping tabs on.  He seizes on Gov. Martinez's announcement that the state will "save millions" by consolidating all human resources departments under the State Personnel Office:

So three or four years into severe budget problems she finally decides to "manage." Reorganization rarely saves money, at least in the early stages. Trust me, I've been through a couple. The disruption to staff relocation and physical plant issues for office space are going to cost plenty, before you even try to address the morale and effectiveness of this. The savings, if any, will be minimal and I am suspect that the trade offs will be worth it. This is managing by a dying administration, that will have no impact on the immediate budget. She is trying to justify her veto in advance.

So Susana will veto the budget deal or portions of it that call for tax increases saying she is going to save millions through this reorganization? Interesting. What's also interesting is that the administration is not saying exactly how much money would be saved by the reorganization or how many employees would be out of a job. Maybe she will say the savings are just enough for her to veto one or two of the tax hikes that will soon be on her desk? Stay tuned.

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