U.S. Rep. John D. Dingell (D-Mich.), chairman of the Committee on Energy and Commerce, is asking Congress to consider state Medicaid funding in its new economic stimulus package.
"I am pleased that we are having a second hearing on the role of healthcare as an economic stimulus," said Dingell in a statement. "With the continued deterioration of the economy, it is clear that quick, decisive action is needed."
Earlier this fall, after the collapse of the housing market and failures of key economic institutions, Congress acted to pass the Emergency Economic Stabilization Package of 2008, which was signed into law on October 3. The continued loss of jobs and revenues for states, however, underlines the need for a second stimulus package, Dingell said.
"That package needs to be targeted to include funding for infrastructure, unemployment insurance and healthcare in the form of increased federal funding for Medicaid to the states," he said.
The ranks of the unemployed have risen by 2.2 million workers over the last 12 months, and most states are experiencing considerable budget deficits along with declining or flat revenues, according to Dingell. A single percentage-point increase in unemployment could increase the number of uninsured by 1.1 million, adding a burden on the states through their Medicaid programs.
Healthcare spending, in the form of increased funding for Medicaid to the states, must be a critical component of any stimulus package, according to Dingell.
First, he said, as workers lose their jobs, so too goes their health insurance.
Second, additional healthcare spending acts as an economic booster. Increasing the federal funding of Medicaid is a powerful countercyclical tool, he said - it is direct, immediate, and doesn't require any additional administrative costs or actions to implement.
"Third, increased investment in the National Institutes of Health is vital to a successful economic stimulus package," Dingell said. "NIH is a proven vehicle to provide maximum economic stimulus effect, plus it offers additional opportunities to accelerate biomedical research that will benefit all U.S. citizens."
For the past five years, Federal funding for NIH has not kept pace with inflation, according to Dingell. In addition to stifling scientific progress, funding cuts have had a negative economic impact on communities across the country. Eighty percent to 90 percent of the NIH's $29 billion budget funds research that takes place at universities, medical research centers, hospitals and research institutes in every state.