Feds Threaten to Cut $4 billion in Medicaid Funding to Indiana

Sunday, June 5th, 2011 and is filed under Blog

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In the culmination of several years of work, the 2011 session of the General Assembly was able to successfully pass legislation denying any and all state funds from going to Planned Parenthood of Indiana. State directed Medicaid dollars formed the largest source of government funding streaming into Planned Parenthood through its 28 clinics around the state.

Because the new policy resulted in an adjustment to the way the state of Indiana allocates Medicaid funds that originate at both the federal and state level, it had to be sent to the national Center for Medicaid and Medicare Services (CMS) for review. CMS has the authority to accept or reject any amendments that states make to their Medicaid programs. On June 1st Dr. Donald Berwick, the Obama Administration’s CMS administrator, notified Indiana officials that the new policy is not acceptable, and will subject the state to financial penalties if its not rescinded.

Baring a successful appeal of the administration’s decision, the cost of maintaining the newly enacted law could be upwards of $4 billion per year. That’s the amount the state annually receives in Medicaid funding from the federal government. By threatening to cut off all Medicaid funding, the Obama administration is forcing Hoosier officials to chose between protecting life and maintaining the financial viability of the state budget and its Medicaid program.

To explain his decision, Berwick argued (document download) that the new Indiana law conflicts with a federal statute that protects the freedom of Medicaid beneficiaries to chose their own service providers so long as the providers are professional qualified. “This SPA [the new Indiana policy] would eliminate the ability of Medicaid beneficiaries to receive services from specific providers for reasons not related to their qualifications to provide such services.”

But such reasoning raises an important question. Is Planned Parenthood really professional qualified to provide family planning services? State Rep. Wes Culver (R-Goshen) pointed out that “we have to remember that Planned Parenthood has been caught on undercover video counseling clients on how to circumvent the law regarding men having sex with underage girls.” Indeed, and that brings into doubt their professional and legal credibility to be a Medicaid approved service provider. Shouldn’t states be given the freedom to hold service providers in their state accountable to high standards of professionalism? One must wonder what CMS would say if a pro-life medical organization that was party to some fraud was given a free pass to receive millions of dollars in Medicaid funds.

The CMS also argues that to deny Planned Parenthood the ability to be service provider would be tantamount to denying Medicaid beneficiaries access to important services. Per Berwick’s letter, “[s]uch a restriction would have a particular effect on beneficiaries’ ability to access family planning providers.” Certainly it would be wrong to deny beneficiaries access to vital services based on the political views of the service provider. However, there is no place in Indiana where Planned Parenthood’s clinics stand as the sole provider of vital, non-abortion family planning and women’s health services. Every woman in the state of Indiana has access to a women’s health provider besides Planned Parenthood. There is no denial of access to important services under the present law.

At its heart, this debate is about 10th Amendment prerogatives serving as a battle ground for the issue of protecting human life at its very earliest stages. So far legislators who supported the new measure have not signaled any willingness to concede the issue. Sen. Jim Banks (R-Columbia City) noted, “Clearly President Obama is the most pro-abortion President in our nation’s history and he will stop at nothing to prevent our efforts to defund public funding of Planned Parenthood in Indiana.” Banks also expressed his support for Indiana Attorney General Greg Zoeller’s effort to defend the law “against the federal government’s overreach into what is clearly a state prerogative.”

$4 billion is a lot of money and to blackmail a state with that amount, particularly during difficult economic times, is a major power play by individuals desperate to push an anti-life agenda. Let’s hope that Indiana lawmakers continue to realize the stakes of what is involved and chose to hold the line in defense of life. If they don’t hold out, the country will know what kind of price tag states are willing to pay to surrender their Constitutional prerogatives and abandon the unborn. To falter in this would be to fail the very core principles that define what makes America great.