The Republican plan to end Medicare, replacing it with a privatized voucher scheme, isn’t going particularly well. But the radical GOP budget plan is ambitious in a variety of areas, and the vision for Medicare isn’t the only problem.
The Hill reports that health care advocacy organizations believe “the GOP has Medicaid ‘in its sights’ as a more realistic place to make healthcare cuts.” Bruce Lesley, president of the children’s advocacy group First Focus, explained, “I’ve always worried that Medicare and Social Security would go off the table and Medicaid would be the only thing left standing.”
Those fears are well founded. The Republicans’ Medicare plan is already a flop, but as Ezra Klein explained the other day, “The attack on Medicaid … is another story.”
There are two reasons Medicaid is more vulnerable than Medicare. The first is who it serves. Medicaid goes to two groups of people: the poor and the disabled. Most of the program’s enrollees are kids from poor families, though most of the program’s money is spent on the small fraction of beneficiaries who are disabled and/or elderly. These groups have one thing in common, however: They’re politically powerless.
The second is who pays. Medicare is a fully federal program. Medicaid is a state-federal match, and it absolutely kills states during recessions, as unlike the federal government, states can’t run deficits, and so they find themselves with increased Medicaid costs because they have more people in need but decreased revenues. So there are a lot of governors — particularly GOP governors — straining under overstretched state budgets who’d like a way out of their fiscal crisis that doesn’t include raising taxes, and there are a lot of federal legislators who’d like to save money without having seniors mounting protest marches outside their office, and Medicaid begins to look like an answer to everyone’s problem.
The GOP plan isn’t just to scale back Medicaid by squeezing some additional savings out of the existing program — which is pretty much impossible at this point — but rather to turn Medicaid over to states in the form of block grants. For the feds, this would mean far less of an investment in the program. For states, it would mean a new ability to start limiting Medicaid eligibility and /or rationing health care serves for beneficiaries.
Who loses? The elderly, families in poverty, and the disabled — constituencies Republicans aren’t especially concerned with.
Medicare privatization isn’t going anywhere. Under the circumstances, Medicaid is worth worrying about.