Repeal Will Be Only the First Hit to Medicaid

If Republicans in Congress and President-elect Trump are successful in repealing the Affordable Care Act early next year as they have pledged, what happens to Medicaid, which insures one in five Americans and one in three of the nation’s children?

The most obvious impact will be the end of the very successful Medicaid expansion. Repealing the health law means that millions of Americans will lose their health coverage, most of them hard working people in low-wage jobs—like waiters and waitresses, sales clerks, cooks, and home health aides.

Medicaid expansion is only the first blow to the Medicaid program

But that won’t be the end of major changes, and cuts, to Medicaid. House Speaker Paul Ryan and Representative Tom Price, President–elect Trump’s nominee to head the Department of Health Human Services, have long wanted to make drastic changes to Medicaid, and they have said they intend to do so.

Repeal would eliminate most of the revenue that pays for the health law by giving tax breaks to the wealthy and large corporations. But Congress is going to need money to fund any kind of a replacement plan, and certainly to fund a plan that leaves no one worse off, which is what Speaker Ryan has promised.

So where is that money going to come from if Congress has repealed most of the revenue raising provisions in the ACA? It’s likely that Medicaid will be the first piggy bank Republican leadership looks to—Medicare will come later.

Republicans will shift Medicaid costs to the states in the name of giving states flexibility

To understand the threat facing Medicaid, just look at what Speaker Ryan and Representative Price have proposed in the past.

Using past proposals as a guide, there will be a push to take away the current guarantee that the federal government will contribute funds to support each state’s spending on Medicaid and replace that guarantee with a fixed federal payment.

The fixed payment from the federal government will take the form of either a block grantor a “per capita cap,” which pays states a set amount per person enrolled in Medicaid. Either way, it’s pretty clear that the federal share will be well below what states receive now, passing more health care costs on to every state.

What’s important to know is that, whatever form these changes take, they will result in shifting spending for Medicaid from the federal government to the states.

Speaker Ryan and Rep. Price’s past proposals for Medicaid leave little room to doubt their plan to cut Medicaid funding

How much federal spending will drop isn’t clear, but past proposals are a good guide. In 2012 Ryan was the architect of a Republican budget that called for block granting Medicaid, coupled with deep cuts to the program that would hit the budgets of every state.

Although Speaker Ryan’s most recent proposal is vague, at best, it does clearly put federal Medicaid spending on a path to fall further and further behind states’ costsevery year.  Representative Price’s plans for Medicaid, on the other hand, are pretty clear.  As House Budget Committee Chairman, he submitted a Republican budget plan this past March that would cut federal Medicaid spending to states by $1.8 trillion.

One thing’s clear: Medicaid, and health and health care security of lower income Americans in every state—including children, seniors, and people with disabilities—will be on the chopping block.

The only flexibility Republican plans give states is deciding how to cut Medicaid services

Proposals to restructure Medicaid will be presented under the guise of added state flexibility. But, with significantly less money to pay for health care, state flexibility will be limited to deciding what or who to cut. States aren’t going to be able to make up the federal revenue lost, because it’s going to leave a huge hole in state budgets.

As we enter 2017, the percent of Americans without health insurance will be at an historic low.  Repealing the law that’s made that achievement possible without knowing in advance what the replacement plan is sets us on a path that risks the health of millions and portends massive cost shifts to states.

When access to health insurance and health security start going backwards, voters will notice, and because it will hit them at home, they will remember, too.