A conservative congressman from Virginia has proposed legislation to require the District to pay a larger share of its Medicaid costs, a change that D.C. officials say could cost the city at least a half-billion dollars a year.
Mayor Muriel E. Bowser (D) said the bill filed by Rep. H. Morgan Griffith (R-Va.) would “lead to devastating cuts in programs and services for our most vulnerable neighbors, and we won’t stand for it.”
The bill would undo part of the Revitalization Act, a bill negotiated and passed by a Republican-led Congress as part of the Balanced Budget Act of 1997 that shifted certain District costs to the federal government and helped rescue the nation’s capital from the brink of bankruptcy.
D.C. Council member Jack Evans (D-Ward 2), who was on the council at that time, called the Revitalization Act “the single most important thing that turned the city around. Nothing else even comes close.”
Former Virginia congressman Thomas M. Davis III, a Republican who negotiated the legislation with then-House Speaker Newt Gingrich, said foisting a new financial burden on the District ignores history.
“Remember, the city at that point was teetering on bankruptcy,” Davis said. Rating agencies had dropped the District’s bond rating to junk status because of its financial crisis, and a control board was appointed to oversee spending.
“There was a trade-off for this. It wasn’t just given to the city,” Davis said. “The trade-off was to try to get the city where it was financially stable, recognizing that the city is the capital of the free world.”
Griffith, a member of the Freedom Caucus from rural Southwest Virginia, is a spending hawk who earlier this year pushed through the House a provision that would allow members of Congress to reduce federal workers’ salaries to as little as $1.
In explaining his latest proposal, he said the District’s financial situation has improved since the Revitalization Act, reducing the need for significant federal assistance. The D.C. median household income of $75,506 exceeds the national median of $57,617 as well as the median of $41,698 in Griffith’s congressional district, according to 2016 U.S. Census data.
“While the statutory exemption may have made sense 20 years ago,” he said, the District should be able to pay nearly as much of its Medicaid costs as most states, including Virginia.
Del. Eleanor Holmes Norton (D), the city’s nonvoting representative in Congress, promised to fight Griffith’s bill, which so far has no companion in the Senate. She plans to file her own legislation to further reduce the District’s Medicaid share, bringing it in line with that of New York City and other jurisdictions with high rates of poverty and income disparity.
“He’s not getting anywhere with this,” she said in an interview. “We’re not about to go back to where we were.”
Unlike other cities, the District does not have the power to charge a commuter tax to help offset the costs of hosting scores of thousands of workers each day.
The Revitalization Act discontinued a lump-sum payment to the city known as the federal payment, in exchange for the federal government agreeing to fund big-ticket items such as the District’s unfunded pension liability, local courts, prisons and a greater share of Medicaid.
Griffith’s bill would reduce the federal government’s share of the city’s Medicaid costs from the current rate of 70 percent to 54 percent by 2027.
D.C. Health Care Finance Director Wayne Turnage said Medicaid costs run high in the District compared with other states, in part because its concentrated urban poverty leads to Medicaid beneficiaries with unusually expensive health-care needs.
A reduction of the federal government’s share of those costs to 54 percent “would be a substantial hit,” he said.
The District budgeted $2.9 billion for its Medicaid program during the 2017 fiscal year, according to an analysis earlier this year by the Office of the D.C. Auditor. Of that, about $2.2 billion came from the federal government.
Had Griffith’s plan been fully implemented in 2017, the federal government’s share would have been roughly $1.7 billion, leaving D.C. officials to come up with an extra $500 million.
However, the effect could ultimately be greater by the time the bill is fully rolled out in 2027, officials said, both because of rising Medicaid costs and the phasing out of parts of the Affordable Care Act that alleviate some of those costs.
As of Thursday evening, Griffith’s bill had no co-sponsors.
It was referred to the House Committee on Energy and Commerce, of which Griffith is a member, and went unnoticed until Norton’s staff spotted it among newly filed legislation.
Peter Jamison contributed to this report.