Paul Ryan’s Budget: Again with the Medicaid?

Dylan Matthews has an awesome chart on the Ryan budget proposal. There’s only one line I want to talk about:


Again with the Medicaid? This is a huge cut in 10 years. It’s enormous. Do people really think that Medicaid – which is already the cheapest insurance around, which already under-reimburses according to most opponents – has that much fat and waste to be trimmed? Really?

Not that long ago, when the House passed a similar budget that called for a 34% reduction in 10 years, these would have been the consequences:

How can states possibly account for that difference? Where’s the magic in innovation? If states refuse to cut benefits and spend the same per enrollee, then even if the Medicaid expansion of the ACA never takes place, an additional 19 million people need to be dropped from the 2021 Medicaid rolls to meet budget cuts. That’s about one-third of all people on Medicaid. If states cut benefits or somehow slow spending to that of GDP growth, they still need to remove 13.8 million people from Medicaid in 2021, in addition to forgetting the ACA Medicaid expansion. If states act to protect the elderly and blind or disabled persons by holding their spending/benefit reduction to 10% (which is still a large cut), then 27 million people, most of them children and pregnant women, need to be dropped from Medicaid in 2021 even if ACA’s Medicaid expansion never occurs.

That was before the expansion. This is likely after. The changes will have to be even larger.

There is no great and powerful wizard here. When will everyone just go look behind the curtain?

[Originally posted at The Incidental Economist]