Target Medicaid?

Iowa lawmakers who may be dreaming of using Iowa's budget balances for big tax cuts or new spending in the future might want to save a chunk of those bucks. Unless they're keen on kicking folks off Medicaid.

Federal Medicaid cuts may be coming. From the Wall Street Journal:

The Medicaid program for the poor is facing significant cuts in an emerging bipartisan budget deal as Republicans seek to shrink entitlements and Democrats protect other priorities.Vice President Joe Biden and a group of negotiators from both parties met for the eighth time Wednesday at the Capitol, seeking an agreement that would pave the way for Congress to raise the debt ceiling.Officials familiar with the talks in both parties say they expect Medicaid to be the biggest source of cuts in federal entitlement programs in whatever compromise emerges.

Vice President Joe Biden and a group of negotiators from both parties met for the eighth time Wednesday at the Capitol, seeking an agreement that would pave the way for Congress to raise the debt ceiling.

Officials familiar with the talks in both parties say they expect Medicaid to be the biggest source of cuts in federal entitlement programs in whatever compromise emerges.

H/t to Ezra Klein, who interprets and laments this development:

That could mean Medicaid is coming in for very large cuts or it could mean Medicare and Social Security is are coming in for very small ones. Either way, the focus on Medicaid is perverse. Medicaid is a much more precisely targeted program than Social Security and Medicare. It's used by primarily by people without the means or the agency to pursue other forms of coverage. Social Security and Medicare, conversely, serve millions of beneficiaries who hardly notice the programs, and don't need them.

Medicaid was a $3 billion program in Iowa in fiscal year 2010, including more than $719 million in state funds.  Democrats expanded the Medicaid roles considerably when they ran the Statehouse, adding more kids and raising income thresholds. In 2010, 549,093 were eligible, up from 307,364 in 2001. Gov. Branstad complained about those additions during the campaign, but hasn't moved to slice eligibility.

The loss of federal dollars would mean cutting the program or increasing the state's share. Sounds like the makings of a big election year fight.