Wednesday, February 24, 2010

Does White House Health Care Bill Affect Transit?

After the nation witnessed Congressional action on health reform reach near-paralysis in the Senate, President Obama announced a White House summit on health reform for February 25, and issued what was touted as his administration's own legislative proposal for health reform.

In contrast to the Clinton-era health reform efforts, Mr Obama's proposal does not exist in detailed legislative language. Instead, he and his team have published many pages of bullet-pointed priorities on the White House web site.

There are many important and complex issues being considered in the health reform discussion. Most of these affect individuals, employers, and - of course - the medical and insurance industries.

Thus far, the main thing in the health care debate that would affect public and community transportation providers is an expansion of who's eligible for coverage under the federal-state Medicaid program. Both the House- and Senate-passed health reform bills would guarantee Medicaid benefits for a lot more people than the 40+ million low-income people currently covered. The President recommends this expansion, as well, and would have the federal government underwrite the full cost for this expansion in the first few years of enacted reform. After that, there would be a phase-down period of a few years, during which states would be expected to pick up a gradually increasing share of these increased Medicaid costs.

The reason this Medicaid issue is important to transit is two-fold. For one, Medicaid payments continue to be the largest single federal investment in public transit operating costs, as Medicaid requires states to assure access - and transportation - to non-emergency medical services. Although proposed Medicaid expansions are likely to bring in young adults and low-income working families, as opposed to the more-traditional populations of non-working, elderly and otherwise disadvantaged persons long covered under this program, there are bound to be some increased riders - and payments - for transportation services under this expansion.

From the transportation industry's perspective, that's the good news in proposed Medicaid expansion. The second point of concern, though, is that there eventually would come a time when states have to pick up more of the costs of the expansion. However, all budgetary evidence shows that the price tag for this Medicaid increase will hit states' coffers several years before they can expect to begin enjoying the fruits of any economic recovery, even under the rosiest scenarios currently at play. Drains on state budgets put a lot of transportation needs at risk, including social services, workforce development, and even the ability of states to assist with the capital and operating costs of public transit.

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