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Republican Budget Would Cause Millions of Americans to Lose Medicaid

Medicaid Matters (ohoto: freidmanlynn)

The House Republican budget written by Paul Ryan has received a huge amount of criticism for its plan to replace Medicare with a poorly indexed private voucher program that could result in more and more seniors every year being unable to afford health care. Less focus has been put on how equally devastating the Ryan plan would be to people who rely on Medicaid because the plan would stop federal funding for the program from keeping up with the increasing cost of actually providing people with care.

A study from be the Kaiser Commission on Medicaid (PDF) lays out three likely scenarios of what would happen if the Republican plan were implemented.

Scenario 1. In the first scenario, Medicaid per person spending would grow at rates equal to those projected under current law, and states make proportional reductions across all eligibility groups (children, adults, elderly and individuals with disabilities). With these assumptions, there would be 36.4 million fewer people in Medicaid in 2021 than would be expected under current law, a reduction of 48% (17 million from the repeal of the ACA and 19.4 million from the block grant).

Scenario 2. In the second scenario, states are able to slow annual increases in Medicaid spending per person to match growth in the economy as a whole. This would mitigate the size of the enrollment cuts. As with scenario 1, reductions would be proportional across eligibility groups. Under these assumptions, Medicaid enrollment in 2021 would fall by 30.8 million compared to what would be expected under current law, a reduction of 41% (17 million from the repeal of the ACA and 13.8 million from the block grant).

Scenario 3. In the third scenario, states protect eligibility for the elderly and disabled (thus disproportionately making enrollment cuts among adults and children). This scenario also assumes states reduce Medicaid per enrollee spending growth and cut spending for the elderly and disabled by 10%. Under these assumptions, Medicaid would cover 43.8 million fewer people in 2021 than under current projections (17 million from the repeal of the ACA and 26.8 million from the block grant). This cut is a 58% reduction in overall enrollment, or a 71% reduction in enrollment of adults and children.

The short conclusion is, under any likely outcome, the Republican plan, by significantly cutting state funding for Medicaid, will leave the states with no choice but to stop providing insurance to millions of needy Americans.

Since most Medicaid money is spent on care for senior citizens, the Republican budget would be a massive one-two punch to older Americans. Given how destructive their budget would be to sick seniors, it is no wonder that Republicans are now seeking a political truce on the policy issue of health care for senior citizens.

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Republican Budget Would Cause Millions of Americans to Lose Medicaid

The House Republican budget written by Paul Ryan has received a huge amount of criticism for its plan to replace Medicare with a poorly indexed private voucher program that could result in more and more seniors every year being unable to afford health care. Less focus has been put on how equally devastating the Ryan plan would be to people who rely on Medicaid because the plan would stop federal funding for the program from keeping up with the increasing cost of actually providing people with care.

A study from be the Kaiser Commission on Medicaid (PDF) lays out three likely scenarios of what would happen if the Republican plan were implemented.

Scenario 1. In the first scenario, Medicaid per person spending would grow at rates equal to those projected under current law, and states make proportional reductions across all eligibility groups (children, adults, elderly and individuals with disabilities). With these assumptions, there would be 36.4 million fewer people in Medicaid in 2021 than would be expected under current law, a reduction of 48% (17 million from the repeal of the ACA and 19.4 million from the block grant).

Scenario 2. In the second scenario, states are able to slow annual increases in Medicaid spending per person to match growth in the economy as a whole. This would mitigate the size of the enrollment cuts. As with scenario 1, reductions would be proportional across eligibility groups. Under these assumptions, Medicaid enrollment in 2021 would fall by 30.8 million compared to what would be expected under current law, a reduction of 41% (17 million from the repeal of the ACA and 13.8 million from the block grant).

Scenario 3. In the third scenario, states protect eligibility for the elderly and disabled (thus disproportionately making enrollment cuts among adults and children). This scenario also assumes states reduce Medicaid per enrollee spending growth and cut spending for the elderly and disabled by 10%. Under these assumptions, Medicaid would cover 43.8 million fewer people in 2021 than under current projections (17 million from the repeal of the ACA and 26.8 million from the block grant). This cut is a 58% reduction in overall enrollment, or a 71% reduction in enrollment of adults and children.

The short conclusion is, under any likely outcome, the Republican plan, by significantly cutting state funding for Medicaid, will leave the states with no choice but to stop providing insurance to millions of needy Americans.

Since most Medicaid money is spent on care for senior citizens, the Republican budget would be a massive one-two punch to older Americans. Given how destructive their budget would be to sick seniors, it is no wonder that Republicans are now seeking a political truce on the policy issue of health care for senior citizens.

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Jon Walker

Jon Walker

Jonathan Walker grew up in New Jersey. He graduated from Wesleyan University in 2006. He is now living in the Washington DC area. He created a politics and policy blog, The Walker Report (http://jwalkerreport.blogspot.com/).