Document Type

Journal Article

Publication Date



American Health Lawyers Association, Health Lawyers Weekly


Volume 5


Medicaid & SCHIP


During its 47-year existence, Medicaid has been the subject of countless analyses, articles, books, and studies, in view of its sheer size (federal expenditures standing at $190 billion in FY 2006),[1] its complexity (more than five dozen separate federal eligibility categories), and its importance in the American healthcare system. Medicaid funds nearly 40% of all births,[2] covers about one-third of all children,[3] and is the primary source of healthcare financing for persons with severe and chronic physical and mental disabilities.[4] Medicaid virtually enables the operation of public healthcare providers, such as school-based clinics, community health centers, and public hospitals, whose primary mission under both law and policy is healthcare for the poor, the uninsured, and the medically underserved. Over the years, several legislative proposals to dramatically structure the federal/state Medicaid financing relationship have been considered and rejected by Congress.[5] Now the Bush Administration has come forward with a proposed rule[6] titled “Cost Limits for Providers Operated by Units of Government and Provisions to Ensure the Integrity of the Federal-State Financial Partnership.” The rule appears to attempt to achieve the type of fundamental alteration in the federal/state Medicaid financial relationship that has been rejected by Congress numerous times over the years. Moreover, the proposal, if adopted in its current form, could have far-reaching consequences for government healthcare initiatives, ranging from hospital care to publicly supported managed care systems, public primary care clinic networks in medically underserved urban and rural communities, school health services in low income schools, and other governmental initiatives aimed at promoting healthcare access and protecting public health.

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