The GOP Is Quietly Scheming to Gut Medicaid While You Weren’t Looking

Congressional Republicans want to make Medicaid even less generous than it was before Obamacare.

While the White House implodes from Russia scandals, congressional Republicans are plugging away at repealing the Affordable Care Act. And while few are watching, they are getting ready to gut one of the country’s most important health care programs: Medicaid.

Medicaid provides healthcare coverage to nearly one hundred million Americans, making it the country’s largest health insurance program. It is run jointly by the states and the federal government: Washington covers at least half the cost of each state’s Medicaid program, and as much as 73 percent in poorer states. The federal government also pays for nearly all of the cost of Obamacare’s Medicaid expansion in the nineteen states that have agreed to insure everyone up to 133 percent of the poverty line.

Of course, any repeal of the ACA will reverse that expansion. But Republicans aren’t simply trying to return to the status quo; they want to make Medicaid less generous than it was before Obamacare. Specifically, they aim to shrink Medicaid’s funding by capping the amount of money that the federal government pays to the states. Instead of paying a percentage of each state’s ultimate Medicaid costs, the federal government would prospectively give each state either a lump sum of funding or a set allotment that the feds will pay for each enrollee. Either way, these limits would deliberately reduce the amount that the federal government spends on Medicaid. This leaves states on the hook to make up the funding gap by either raising taxes or offering fewer benefits to fewer people.

To put this in numbers, the House health care bill imposes progressively deeper cuts over the next decade, slashing federal Medicaid spending by 26 percent by 2026. Even these cuts, which the White House has blessed, are not severe enough for some hardliners in the Senate, who want even greater reductions. They would achieve this by tying federal funding to a lower measure of inflation than the one currently used, which would cause the real value of the block grants to erode over time and cover less and less of the states’ expenses.

These reductions in federal Medicaid spending would affect a much wider swath of the American people than is commonly understood. For instance, Medicaid is the biggest neonatal care program in the country, covering nearly half of all births in the United States. That’s because Medicaid covers pregnancy services for all women with incomes up to 133 percent of the poverty line, and many states extend eligibility to pregnant women with significantly higher incomes. And at any given time, Medicaid insures nearly 40 percent of all American children. At the other end of life, Medicaid is also one of our biggest eldercare programs. More than 60 percent of all nursing home residents rely on it. The program also pays for 40 percent of all costs for long-term care.

Funding for these services is at risk under a Republican health care bill. Yet as states are forced to pare back optional coverage for home- and community-based services in the face of massive Medicaid cuts, more seniors and children with disabilities could be forced  into nursing homes anyway. The bill will also make more homeowners “too rich” to qualify for coverage by counting more of their housing value against Medicaid eligibility. This, too, could force people out of their homes in order to receive care.

Then there are Medicaid’s optional “medically needy” programs, which allow states to extend Medicaid eligibility to middle-class families with high medical expenses from debilitating disabilities like autism or Down syndrome. Because these programs are optional, they are “[a]mong the Medicaid programs at greatest risk” for getting cut, observed former Obama economic advisor Gene Sperling in a New York Times op-ed. To triage their budgets, states would be forced to prioritize Medicaid’s mandatory coverage requirements while whittling away optional coverage for middle-income families with high-cost disabilities. This has been borne out in the past. Multiple states have already eliminated their medically needy programs in order to cover budget shortfalls. When Oklahoma ended its program in 2003, 800 children, 6,500 parents, and 1,000 seniors lost coverage.

So Medicaid provides vital healthcare services relied on by poor and middle-class people at all stages of life. Indeed, nearly two-thirds of all Americans report either benefiting from Medicaid themselves or having close friends or family who have. That’s what’s at stake right now. The federal cuts contemplated by Republicans are simply too daunting for states to realistically make up the difference. To cover the gap in federal funding under the Republicans’ bill, states would need to increase their annual share of Medicaid spending—already one of their biggest expenditures—by an average of 37 percent by 2026. As one healthcare expert has noted, the proposed cuts are simply “so large, no amount of new flexibility could allow a response that wouldn’t include large state tax increases or severe reductions in coverage that would affect the medical services needed by the children, pregnant women, persons with disabilities, the elderly, and other adults now served by Medicaid.”

Yet Republican officials are pretending there won’t be any pain at all. Health secretary Tom Price outright lied on CNN, insisting that “[t]here are no cuts to the Medicaid program” under the House’s bill. To the contrary, the bill’s cuts are so substantial that the non-partisan Congressional Budget Office projects that upwards of 14 million people will lose their Medicaid coverage. Indeed, Speaker Paul Ryan has openly boasted that the GOP’s attack on Medicaid constitutes the biggest entitlement reform in generations, fulfilling the wildest dreams of his college kegger days. “We’re talking about trillions in the end here in this program,” he nearly salivated to conservative radio host Hugh Hewitt.

So don’t lose sight of what Republicans are doing to Medicaid. While Donald Trump does violence to our constitutional democracy at one end of Pennsylvania Avenue, congressional Republicans are plotting violence against Americans’ health at the other.

Joel Dodge

Joel Dodge is a writer and attorney in New York City. His work has appeared in Quartz, The Week, The New Republic, and The American Constitution Society.