Budgetary Analysis Essay Sample

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The United States administers a healthcare program that is nationwide to qualifying individuals who are either disabled or have a low-income. This program is one of the largest contributors for providing health care services for poverty-stricken Americans. It is collectively receives its funding from state governments as well as the federal government. The major responsible party for funding is the state government (“Overview of the Medicaid”, 1995). When the government undergoes an economic crisis, this places a strain on the current budget in place. This causes an increase in Medicaid eligibility resulting in states making necessary budget cuts as they see fit. This author will describe the process of budgeting and the impact that budget alterations to place upon the general public. This author will also address suggestions on how to resolve budget strains as well as the current political climate of the state of Arizona. Medicare is often referred to as the “entitlement program”.

What this means is once an individual meets the requirements necessary for the program then they will be accepted and placed within the program. State and federal governments do not have the ability to place limitations on the amount of people that can be accepted into this program. According to Sommers, Gordon, Somers, Ingram, & Epstein (2014), it has been reported that Medicaid “serves more than fifty million beneficiaries and spends more than $300 billion a year” (254). The costs associated with Medicaid continue to rise and have expanded over the last five years by 63%. Although Medicaid receives funding by the state and the federal government, there are quite a few states that are running out of the necessary funds as the funds allocated in the Medicaid budget are gone. In return, states have their backs pushed up against a wall. They are faced with only one solution to this problem. Unfortunately, necessary cuts and revisions take place, cutting out services and programs; resulting in downsize of the budget. Budget Process

The United States Constitution grants Congress the power over how funds are spent from creating taxes to collecting taxes. However, the Constitution did not depict any standards as far as how this power is to be exercised and it did not detail requirements for the budget process. Congress has derived it’s very own set of rules that is continuously altered/updated (Heniff, Lynch, & Tollestrup, 2012). The bill dictates how agencies and programs will obtain funds annually. Legislation has to be passed by Congress. This gives Congress the ability to disperse money to these agencies as well as programs. Social Security, Medicare and Medicaid benefits are considered to be mandatory expenses. This is because the law indicates that the government will need to pay benefits to all people (Heniff, Lynch, & Tollestrup, 2012). Each state follows a budget process that is very similar to the Federal process. According to Heniff, Lynch, & Tollestrup (2012), there is a five step process involved for creating a federal budget. These steps are as follows: Step 1: Budget proposal submitted by the President

In February of each year, the President sends over a request for budget to Congress for the next year. The budget proposal is just a simple request. However, Congress needs to review the bill and accept it. When the President signs the bill or bills, then a budget for the next year is created Step 2: Budget Resolution is passed by Congress

Congress can take a while, sometimes even months when reviewing budget proposals from the President. Once budget is carefully reviewed, a budget resolution is then create and written by the House Budget Committee and the Senate Budget Committee. The budget resolution is not a legally binding contract. However, the proposal serves as a guideline on how to properly make decision in regards to the budget. Step 3: Congressional Subcommittees “Markup” Bills

The appropriation committee is comprised of various subcommittees. These committees address different aspects of spending. The subcommittees review the proposed budget and then begin hearings. This encourages healthy debate of the budget. Subcommittees can either amend or recreate the budget. All members within the subcommittee come together collectively and vote. Once the bill is approved, the bill is then sent to Congress for further review and analysis. Step 4: Congress votes on Bill and settles dissimilarities

Congress has to place votes and then the bill must be reviewed by the Conference Committee. The Conference Committee acts as a mediator between each part of congress ensuring that all issues are resolved. The Conference Committee then submits the bill to Congress. Congress proceeds to vote again. Once bill is approved by Congress it is then sent over to the President. Step 5: President signs each bill; the budget becomes law

Each bill must be signed by the President in order for the bill to become a law. The current United States economy is slowly recovering from the economic crisis; the Recession. The Recession is depicted as the worst economic condition since that of the Great Depression. This crisis has opened up the flood gates for Medicaid eligibility which places a stipulation on the state budget. However, no person or family can be rejected or refused. Therefore, states are faced with hard decisions to make as far as what service or service to cut-back to ensure that there is funding to accommodate the expansion. States budgets are created solely based on criteria of the state, the general public, and the outcome of the federal government program. These budgets detail how funds will be used, distributed, and evaluated. The Impact of Budget Cuts on the Community

Those that would be deeply impacted by budget cuts to Medicaid would be low-income families and those that are disabled or elderly. Hospitals and provider facilities will be impacted as well as they will no longer be able to provide the same services that they use to. This due to the fact that providers and hospitals currently receive Medicaid reimbursements that are approximately 100% less that cost of care provided (Dickson, 2014). Providers will begin to avoid performing services that are not profitable. The creation of job opportunities and boosting the economy is generated through the Medicaid program. So, when the enrollment for Medicaid rises, it becomes the responsibility of the state to find the means to gather the necessary funds to accommodate the increase. Typically, states proceed with cutting back funding for other services included in the budget such community services, education services, and emergency services. (Dickson, 2014). Recommendations to Medicaid Budget Changes

With the continuous fluctuation of budget in regards to Medicaid, it is essential that the states make it their objective to not only generate funds but have them accessible to assist with providing health care. When it comes to offering assistance through the Medicaid program, those who truly need the services the most should be the individuals who that the states really focus on. Ensuring that health care insurance is provided to all Americans is an issue of extreme importance. However, increasing the enrollment for Medicaid is not the solution to this dilemma. We will need to seek out other alternatives to the problem such as considering lower, shared cost-effective selections. Every state has the freedom to decide the terms of Medicaid eligibility (Dickson, 2014). Therefore, having a monthly payment between ten to twenty dollars a month for those who are above the low-income level should be deeply contemplated. To generate more funding, the following should be considered: increasing taxation to businesses, increasing renewals for licensing, increasing registration for vehicles and drivers’ licenses, increases to professional and business license renewals.

However, the fees applied should minimal but significant enough to expand the budget. For example, renewals for business licenses, the fee applied should not be over 1% of the estimated revenue. By monitoring spending and expanding the methods to generate revenue, this should allocate more funds that are existent outside of funding dedicated to the budget. The additional funds will give each state the opportunity provide health care services or assistance as needed. To avoid states from crumbling economically, states should implement a “rainy day fund”. This may take time initially but it worthwhile to handle cost deficits. According to Joyce (2011), it is a good recommendation to ensure, at minimal, 1.5% of funds are placed aside strictly for the rainy day fund. Arizona State: Current Political Climate

Arizona’s conservative Republican Governor Jan Brewer has always been in opposition towards most issues addressed by President Barack Obama. However, she stands as one out of the very few Republican leaders of this state that full-heartedly supports the expansion of Medicaid. Most Arizona lawmakers voted against Medicaid expansion and the Affordable Care Act stating that it violated the state Constitution as it would force taxation on hospitals (Condon, 2013). Arizona has always been noted as a Republican state and Governor Jan Brewer has been the voice of the many Arizonians; a mere reflection of their viewpoints. She once questioned Obamacare but the expansion of Medicaid allowed all residents of Arizona understand just how beneficial it truly is. Since, the passing of the bill, Governor Jan Brewer has changed not only the views of Arizona residents but the views of many others across the nation. The acceptance and support of this policy has allowed us to ensure that health care is accessible to all people across the state of Arizona regardless of cost. Conclusion

Medicaid is a joint federal and state program that is shaping the U.S. health care system ensuring that those who do not have the means to afford health care are presented with an option than oppose to nothing. The state as well as the federal government both shoulder the health care cost. When Americans are faced with an immediate economic crisis, the eligibility for Medicaid rises and the states do not have an adequate budget to support the increase and are forced to find the means to afford these additional expenses. The best method to generate funding to shoulder these costs would be to slightly raise taxes and fees affiliated with businesses as well as licenses. State budgets should aim to put aside funds; rainy day funds that would be available when additional expenses are of this very nature are encountered. Overall, the state of Arizona has been quite conservative in previous years but has now altered those views and its goals are directly aligned with that of the federal government.


Condon, S. (2013). Arizona Gov. Jan Brewer keeps up pro-Obamacare fight. Retrieved from http://www.cbsnews.com/news/arizona-gov-jan-brewer-keeps-up-pro-obamacare-fight/. Dickson, V. (2014). Providers and plans target big push to boost Medicaid enrollment. Modern

Healthcare, 44(43), 21-24. Retrieved from EBSCOhost.

Heniff Jr., B., Lynch, M. S., & Tollestrup, J. (2012). Introduction to the Federal Budget

Process. Congressional Research Service: Report, 1-30. Retrieved from EBSCOhost.

Overview of the Medicaid program. (1995). Health Care Financing Review, 17(1), 118.

Retrieved from EBSCOhost.

Joyce, P. G. (2001). What’s So Magical about Five Percent? A Nationwide Look at Factors that

Influence the Optimal Size of State Rainy Day Funds. Public Budgeting And

Finance, 21(2), 62-87. Retrieved from EBSCOhost.

Sommers, B. D., Gordon, S., Somers, S., Ingram, C., & Epstein, A. M. (2014). Medicaid on the

eve of expansion: a survey of state Medicaid officials on the Affordable Care

Act. American Journal Of Law & Medicine, 40(2-3), 253-279. Retrieved from


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