The GOP plan for Medicaid

THE GOP PLAN FOR MEDICAID…. While the details are still coming together, reports indicate that House Republicans hope to slash Medicaid, which largely benefits low-income families, by about $1 trillion.

And how, pray tell, would the GOP pursue such savings? Jonathan Cohn reports that the proposal intends to eliminate the Medicaid expansion under the Affordable Care Act, and then “convert the entire program into a system of block grants.”

[F]or now, I hope that anybody writing on these proposals mentions, prominently, that rolling back the Affordable Care Act’s Medicaid expansion would mean taking health insurance away from about 15 million people. That’s the official, Congressional Budget Office projection of how many people will get coverage under Medicaid once the Act is fully in place.

As for turning Medicaid into a block grant, here’s a quick refresher on what that entails. Right now, Medicaid is an entitlement program. That means the federal government, in partnership with the states, must enroll everybody who meets the program’s guidelines. In other words, if millions of additional people become eligible because, say, they lost their job-based insurance in the recession, then the feds and the states have to provide them with coverage and find some way to pay for it. And it can’t be spotty coverage, either. By law, Medicaid coverage must be comprehensive.

At least, that’s the way it works now. If the law changes and Medicaid becomes a block grant, then every year the federal government would simply give the states a lump sum, set by a fixed formula, and let the states make the most of it. Conservatives claim block grants will give states the flexibility they need to make their programs more efficient. But, as Harold Pollack has noted in these pages, states already have some flexibility. And because demand for Medicaid tends to peak during economic downturns, when state tax revenues fall, the likely impact of a block grant scheme is to make Medicaid even less affordable at the time it is most necessary.

The Center on Budget and Policy Priorities’ Paul Van de Water added, “The risks would likely be greatest for poor people with severe disabilities, who often need an extensive array of health services. Indeed, states would likely curtail benefits such as mental health services and therapies, many of which are critically needed by people with disabilities and children with special health care needs.”

One assumes GOP leaders will say a brutal plan like this is somehow necessary, because of widespread fiscal problems at the federal and state level. But that’s nonsense. For one thing, Republicans have wanted to do this anyway, and using the Great Recession as a justification for an existing agenda is absurd.

For another, if GOP officials were serious about fiscal responsibility, they could allow the expiration of ineffective Bush-era tax breaks for the wealthy, long before they started taking health care benefits away from families in poverty.