Outlays for Medicare, Medicaid and “other mandatory federal programs related to health care accounted for just under 40 percent of mandatory spending in 2011,” the Congressional Budget Office reported today and will continue to grow into the future. For instance, a boost in the number of beneficiaries will increase Medicare spending to more than $1 trillion by 2022, reflecting 4.2 percent of the Gross Domestic Product, (GDP) and raise Medicaid spending to $605 billion:

Interestingly, the growth in Medicare spending per beneficiary over the 2012–2022 period will only average “1 percent a year more than the rate of inflation” — compared to a 5 percent a year growth between 1985 and 2007 — as a result of “the anticipated influx of younger, healthier beneficiaries” and the constraining effects of the SGR formula and the limits on updates to payment rates for other services,” the CBO projects. Per-beneficiary spending will increase thereafter as a result of “rising drug costs” and “more generous benefits enacted in the Affordable Care Act.” Outlays will increase if Congress patches the Sustainable Growth Rate (SGR) and prevents a scheduled 27 percent fee reduction for Medicare doctors in March 2012, as lawmakers have pledged to do. “If payment rates stay as they are now through 2022, outlays for Medicare (net of premiums) would be $9 billion higher in 2012 and about $316 billion (or about 5 percent) higher between 2013 and 2022,” CBO concludes.

Expenditures on Medicaid, on the other hand, will decrease in 2012 “as states become responsible for a higher share of total costs than had been the case in recent years.” The program grow steadily between 2014 an 2016, when more lower-income Americans become eligible for Medicaid under health care reform. By 2022, about “95 million people will be enrolled in Medicaid at some point in the year, CBO estimates.”

Medicaid, which is funded jointly by the states and the federal government, provides health coverage to approximately 53 million lower income Americans. The federal government helps fund the program by matching state spending on a per-claim basis and paying a percentage of each state’s Medicaid costs (anywhere between 50 and 75 percent). While both parties are looking for ways to reduce spending on the program, the GOP presidential candidates, along with Mitt Romney, have proposed reducing the federal government’s commitment by block granting its contribution and paying states pre-established grants that are indexed over time. Under such a plan, federal spending would no longer reflect the actual costs of the program, particularly during periods of economic recession when Medicaid rolls swell and costs increase.

“Medicaid alone, by being sent back to the states, and growing the funding by inflation — CPI — plus 1 percent a year, will save a $100 billion,” Romney usually says on the campaign trail. But during a rare yesterday, the former Massachusetts governor took his claim one step further, telling Fox News’ Chris Wallace that reducing the federal government’s payments to the safety-net health care program would not undermine beneficiaries because states would use the reduced funds more efficiently:

ROMNEY: I take the Medicaid dollars, send them back to the states, without the mandates as to how they have to treat –“

WALLACE: “But you’re also cutting the budget by $700 billion dollars.”

ROMNEY: “Well what I’d do is I’d take the money, send it back to the states, and say we’re going to grow that funding at inflation, the CPI, plus one percent. By doing that, you save an enormous amount of money. I happen to believe that states can do a better job caring for their own poor, rooting out the fraud and waste and abuse that exists within –“

WALLACE: “But you don’t think if you cut $700 billion dollars in aid to the states that some people are going to get hurt?

ROMNEY: “In the same way that by cutting welfare spending dramatically, I don’t think we hurt the poor. In the same way I think cutting Medicaid spending by having it go to the states run more efficiently with less fraud, I don’t think will hurt the people that depend on that program for their healthcare.”

Watch it:

It’s an ostentatious claim from a governor who reformed the Massachusetts health care system in order to sustain increased federal funding for Medicaid. And while some states could certainly find less painful cuts to Medicaid, a Congressional Budget Office analysis of Paul Ryan’s very similar block granting scheme found that if federal spending for Medicaid decreased, “states would face significant challenges in achieving sufficient cost savings through efficiencies to mitigate the loss of federal funding.” “To maintain current service levels in the Medicaid program, states would probably need to consider additional changes, such as reducing their spending on other programs or raising additional revenues. Alternatively, states could reduce the size of their Medicaid programs by cutting payment rates for doctors, hospitals or nursing homes; reducing the scope of benefits covered; or limiting eligibility,” the budget office concluded. As a result, enrollees could “face more limited access to care,” higher out-of-pocket costs, and “providers could face more uncompensated care as beneficiaries lost coverage for certain benefits or lost coverage altogether.”

Some Republican governors have spoken out against the proposal and condemned additional federal cuts in general. As Nebraska Gov. Dave Heineman (R) indicated in November, states can swallow small cuts, but larger reductions would result in a “cost-shift to the states.” “We know there is going to be a reduction in the Medicaid program. If it’s a small reduction, states are prepared to share in that, we will do our part,” he said. “If it is a dramatic reduction, then it is significantly going to have an adverse impact on state budgets. And when you look at state budgets, there are three big items: Medicaid, the funding we do for the education of our children in K-12 and higher education. So if you dramatically cut Medicaid, you’re going to force us to make dramatic education cuts for our children, that’s not where we ant to go,” Heineman warned.

Talk about the pot calling the kettle black: after years of gutting women’s health services in his state, GOP contender Gov. Rick Perry (TX) is attacking the Obama administration for “sacrificing the health of millions of Texas women in the name of their pro-abortion agenda.”

The administration’s crime? Refusing to let Texas violate federal law by restricting family planning providers in the Medicaid Women’s Health Program:

The U.S. Department of Health and Human Services has turned down Texas’ request to run a family planning program that excludes certain providers — namely Planned Parenthood — saying it’s a violation of the federal Social Security Act. [...]

Gov. Rick Perry called the decisions out of Washington “one step forward” and “two steps back.”

“I am concerned the Obama Administration is playing politics by holding women’s health care hostage because of Texas’ pro-life policies,” he said in a statement, “sacrificing the health of millions of Texas women in the name of their pro-abortion agenda.”

According to the Texas Health and Human Services Commission, the Medicaid-funded Women’s Health Program saves Texas at least $20 million a year and prevented over 6,700 unplanned pregnancies in 2009. But this year Perry and the GOP legislature defunded Planned Parenthood and cut family planning services by a staggering $74 million in an attempt to reduce the number of abortions. Yet the Women’s Health Program does not provide abortions — it does, however, give low-income women access to breast cancer screenings and birth control.

The state budget Perry signed slashed funding for women’s preventative health care, leaving up to 300,000 women without access to basic health services.

Ohio Gov. John Kasich’s “new way” of creating jobs has left something to be desired — namely, jobs. Kasich has killed projects that promised to create jobs in favor of policies that are sure to stunt job creation. Now with a state facing an overall loss of 400,000 jobs and an unemployment rate of 9 percent, Kasich’s decision to slash state funding for Medicaid left 2,800 Ohioans who help the elderly and disabled out of a job:

A separate survey of 385 Ohio nursing homes found that 2,800 jobs had been eliminated between July 1 and Sept. 1 — or soon would be — following a 6 percent budget cut to the state’s Medicaid program, the tax-funded health-insurance program for the poor and disabled.

Kasich’s cuts result from his desire to “rebalance” the amount of funding spent on Ohio seniors and the disabled. Hoping to shift towards “in-home care,” state officials say the nursing-home job loss is “not surprising.” But, as FamiliesUSA notes, funding Medicaid is a sure-fire way to ensure economic growth and job creation.

According to the Ohio Health Care Association, mostly nurses and nursing assistants “who provide hands-on care to patients” are the ones who have lost their jobs. Other nursing homes have “frozen or cut workers’ pay, as well as freezing or cutting benefits.” Nursing home officials worry that these cuts will affect patient care. Five homes have already closed since the budget cuts began.

And given the similar obsession with budget hacking among Republican governors and lawmakers, Ohio is just the beginning. According to the Alliance for Quality Nursing Home Care, “Ohio is ground zero for what will be coming for the rest of the country.” There are also federal Medicare cuts pending due to overpayment that will affect jobs in the state.

In February 2009, Newt Gingrich praised President Obama’s American Recovery Act for including investments in health information technology and increasing the federal government’s match for the Medicaid program (via Andrew Kaczynski):

GINGRICH: There are two good things from the standpoint of health. The first is, a very serious investment in health information technology, which takes us a significant step down the road toward really having electronic health records for every American and I applaud President Obama for developing and insisting on that approach. And second, a substantial amount of money for Medicaid, which will in fact help the states this year, at least in the short term period, to be able to pay their bills and to help hospitals and doctors who otherwise would face very severe cuts.

Watch it:

Gingrich now rarely mentions these provisions as he campaigns for the presidency in Iowa, New Hampshire, and South Carolina, and instead condemns both the stimulus package and the Affordable Care Act in the broadest possible strokes, trying to obscure the fact that he has advocated for some of the very same provisions that President Obama has signed into law.

A new report out today from the National Governors Association and the National Association of State Budget Officers finds that while state budgets are slowly growing, Medicaid costs “continue to outpace the growth in tax revenue.” From the report:

Factors causing rapid growth in Medicaid costs for states include: increased enrollments (because of both the weak economy and expanded eligibility under health care reform); the elimination of federal funds associated with the enhanced matching rate of state costs from the Recovery Act; and per capita health care costs in general increasing faster than the economy. With Medicaid costs growing significantly and state revenue collections growing at a much slower pace, states are likely to face tight fiscal conditions for the foreseeable future.

Consequently, most states have already tried to contain Medicaid spending by restricting provider reimbursements or reducing certain Medicaid benefits, and are now looking to further expand “managed care and coordinated care options, using health homes for those with chronic conditions, pursuing dual eligible initiatives to provide managed care services for those eligible for both Medicare and Medicaid.” For 2012, state budgets “call for a $19.4 billion increase in Medicaid spending, which already accounts for more than a fifth of total spending.”

The Washington Posts’ Jennifer Rubin is attributing the failure of the super committee to Democrats’ refusal to accept partial Medicare privatization and any cuts to the Affordable Care Act. It’s a meme first advanced by super committee co-chairman Rep. Jeb Hensarling (R-TX) and echoed by conservatives like James Capretta:

In this regard, nearly all of the mainstream reporting has taken for granted that ObamaCare is off limits from budget cutters. Reporters and the left punditocracy have declined to even recognize that the real “intransigence” was not on the part of Republicans (who offered up more revenue) but on the part of Democrats who insisted that ObamaCare remain pristine (despite the serial revelations that the plan is not unfolding as anticipated) and who refused respond with a serious counteroffer on tax reform.

The second issue revolves around Medicare. The Republicans last spring presented Rep. Paul Ryan’s premium support plan. Then in the supercommittee they offered the Rivlin-Domenici plan that would have allowed seniors to opt for traditional Medicare. But, as Capretta points out, the Democrats’ answer is to keep traditional Medicare and simply limit fees to providers, a recipe for shortages and denial of care.

First, it’s unclear why unwinding the Affordable Care Act — which reduces the deficit by billions of dollars — would make for good policy if you’re truly interesting in lowering the federal debt. That kind of thing would only be of use to partisans seeking to squash the President Obama’s signature accomplishment during an election year. Anyone truly interested in reducing health care spending should be looking for ways to ratchet up the cost savings already included in the law, rather than tear them down. (As is, the ACA is “projected to reduce aggregate spending by 6 percent over the 10 year period.”)

And as for the Medicare privatization plan, if Rubin or Capretta can explain how the ever-depreciating premium support proposal isn’t a cost shift to beneficiaries, I’d like to hear it. For the time being, Democrats — who themselves offered billions in Medicare and Medicaid cuts — are fighting with Republicans to preserve the sequestration process in the the Budget Control Act. The triggers will apply to any mandatory spending not specifically exempted, meaning that health reform provisions like grants to states for establishing exchanges, the public health prevention fund, and mandatory funding for community health centers could all be vulnerable to reductions. How is that for “off limits”?