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.”

Ron Paul thinks this is unconstitutional

To see the new Iowa GOP frontrunner claim that all of these things violate the Constitution — and to learn which seven cabinet departments he also believes are unconstitutional — watch our video here:

“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.

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.

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.

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.

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.”

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”?

Likely U.S. Senate Candidate Dan Liljenquist (R)

Alas, all of Hatch’s extremist posturing may be for naught, as the Tea Party has found someone who shares their apparent policy goal of ensuring that people who can’t afford health care are left to fend for themselves:

During a recent media blitz in Washington, D.C., Dan Liljenquist, a state senator from Utah, went after Sen. Orrin Hatch, arguing he has done more than any other Republican to promote nationalized health care. [...] The skirmish is the first between these potential 2012 opponents. Liljenquist, a Republican, says he won’t make an official decision until early next year, but he has prepared for a possible run for Hatch’s seat. [...]

[Liljenquist] argued that Hatch is not committed to returning power to the states, focusing on the State Children’s Health Insurance Program that Hatch spearheaded in 1997. That program, which pays for health coverage for poor children, has come under fire from tea party Republicans who see it as a step toward a national takeover of health insurance. Liljenquist went as far as to call it “unconstitutional.”

Liljenquist’s suggestion that the State Children’s Health Insurance Program (SCHIP) is unconstitutional is absurd. SCHIP works by providing funds to states to help them pay for health insurance for children. Because the Constitution allows the federal government “to lay and collect taxes” and to use those revenues to “provide for the…general welfare of the United States,” there is simply no doubt that it can spend money on providing health care to vulnerable young people.

Moreover, other essential health care programs — such as Medicare and Medicaid — stand on similar constitutional footing as SCHIP. So if Liljenquist thinks one of these programs is unconstitutional, it is likely that he believes that we must eliminate all three.

In other words, if Liljenquist succeeds in taking Hatch’s Senate seat, Utah could become the only state in the union to have its entire Senate delegation believe that the Constitution requires millions of children, low-income Americans and seniors to be cast out into the cold with no meaningful access to health care.

ROMNEY: In a setting like this, the idea that we’re going to devastate our military is simply unacceptable. I would call on the president and do call on the president to immediately introduce legislation which says we will not have a $600 billion cut to America’s military. We should not cut any funding from our base defense budget, that should not occur. And I would apply the $600 billion that were anticipated on being imposed upon the military, I would take those and apply them into other parts of the federal budget. And there are a number of candidates for that, one of course would be to take something like Medicaid, which is our health care program to the poor and return that program to the states…by doing that you more than compensate for the $600 billion that would be restored to the defense budget.

Watch it:

But Romney has it backwards: cuts to the military would likely have almost zero impact on national security — as they would target the many wasteful, costly weapons programs, many of which are barely even used. Defense contractors like BAE sometimes overcharge and bilk taxpayers, billing the government far more than the “fair and reasonable” price for parts and services. In 2010, BAE Systems pleaded “guilty to one charge of conspiring to make false statements to the U.S. government over regulatory filings.”

Reductions to Medicaid, on the other hand, would significantly increase costs for beneficiaries and the nation and undermine care for lower-income Americans who need it most. As the Congressional Budget Office concluded, if Romney implemented his proposal to “return” Medicaid “to the states” and significantly reduced federal funding, governors would have to cope with the shortfall 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.”

Americans overwhelmingly oppose additional cuts to the Medicaid program — which states are already curtailing during a period of heightened eligibility — but 51 percent of voters support reducing the bloated military budget.

Despite the fact that this expansion will allow each and every state to provide millions more people with affordable health care, and despite the fact that it will do so at minimal cost to those states, the several conservative-led states challenging the Affordable Care Act claim that the Medicaid expansion is unconstitutional because it somehow “coerces” the states into participating in Medicaid. As ThinkProgress explained more than a year ago when this argument was originally raised, it essentially boils down to a claim that Medicaid is unconstitutional because it is too generous, and it has little chance of succeeding in court:

Congress has broad authority to entice states into action by offering them a federal grant which provides the state with money, but only if the state agrees to comply with certain conditions. The state is always free to turn down this grant, but if it takes the money, it has to comply with its agreement to also obey the conditions.

Medicaid is the largest existing conditional grant program, and [the plaintiffs] essentially argue that, even though they have decided to take the money that Medicaid offers, they can refuse to comply with the conditions on that money because Medicaid is such a good deal than they couldn’t possibly refuse it.

This novel claim is based in a statement in the Supreme Court’s decision in South Dakota v. Dole that “in some circumstances the financial inducement offered by Congress might be so coercive as to pass the point at which ‘pressure turns into compulsion.’” The justices, however, have literally never held that a conditional grant is “so coercive” as to be unconstitutional, and the lower courts universally reject the claim that Medicaid is unconstitutional just because it is a good deal for the states

Nothing has changed since we originally published those words. Indeed, every single judge to consider the Affordable Care Act’s Medicaid expansion has upheld it. Even Tea Party Judge Roger Vinson, the judge whose error-laden opinion tried to wipe out the entire Affordable Care Act, rejected the plaintiffs’ argument against the Medicaid expansion.

It is mildly troubling that the Supreme Court would agree to hear this issue in the first place, since federal/state partnerships like Medicaid are one of the backbones of America’s safety net. If the Supreme Court were to undermine Congress’ ability to give conditional grants to the states, everything from Medicaid to federal assistance to public schools could fall by the wayside.

Yet there are two reasons to doubt that the Supreme Court is poised to do so. The first is simply the nature of the plaintiffs in this case. It is very rare for this many states to join together on one lawsuit — even if the only real link between those states is the fact that they are currently run by Republicans — and the Supreme Court likely agreed to hear this issue simply out of deference to the extraordinary nature of these plaintiffs.

The second reason is that it is not at all clear how lashing out at federal/state partnerships fosters any real interest in preserving states rights. If the Supreme Court rolls back Congress’ power to provide conditional grants, nothing would prevent Congress from simply cutting the states out of the bargain entirely and assuming total control over programs like Medicaid. The likely outcome of a decision rolling back the ACA’s Medicaid expansion would be to increase the role of the federal government because it would no longer be possible for Congress to trust states to administer major safety net programs.

It is unfortunate that the justices chose to waste their time with a fringe issue that no judge has found to have merit. Nevertheless, there is no reason to doubt that the Affordable Care Act will be upheld.

But Americans continue to rely heavily on safety net programs to stay afloat, according to a new report from the Center on Budget and Policy Priorities (CBPP). Without the permanent safety net programs (including Social Security, Medicare, Medicaid, and various assistance programs) and temporary programs included in the 2009 American Recovery and Reinvestment Act (which Republicans have falsely claimed didn’t work), more than a quarter of the country’s population would have fallen beneath the poverty line in 2010, CBPP says:

Our report also shows that if the government safety net as a whole — these temporary initiatives (all were featured in the 2009 Recovery Act) plus safety-net policies already in place when the recession hit — hadn’t existed in 2010, the poverty rate would have been 28.6 percent, nearly twice the actual 15.5 percent.

CBPP’s report comes on the heels of newly-refined poverty measures from the Census Bureau that painted an even bleaker picture of American poverty. According to the new measure, 16 percent of the population, or approximately 49.1 million Americans, lived in poverty in 2010, up from 46.2 million found in the official report released in September. The bulk of that difference comes from seniors, the very people who rely most on social safety net programs. Because the alternative measure takes out-of-pocket medical expenses into account, it found that nearly 16 percent of those over age 65 lived in poverty in 2010, up from 9 percent in the September report.

“I’ve laid out a plan that balances our budget,” Romney told Sean Hannity last month by taking “Medicaid and giving it back to the states and growing it only 1 to 2 percent a year.” Accepting Romney at his word, ThinkProgress concluded that the former governor’s cuts to Medicaid could be even more draconian than the reductions outlined in Paul Ryan’s budget, which aims to grow the federal contribution by approximately 3 percent annually (as compared to the estimated 6.5 percent to 7 percent annual growth* in federal expenditures that would occur under current law). Yesterday, during an appearance in Dubuque, Iowa, Romney brought his growth rate in line with Ryan’s proposal, promising to increase the federal block grants to the states by inflation plus 1 percent:

ROMNEY: 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.

Watch it:

The Congressional Budget Office (CBO) estimates CPI at 2.3 percent, meaning that CPI + 1 percent, would boost Romney’s growth rate to 3.3 percent. Comparatively, Ryan’s annual inflator — population growth plus CPI — stands at about 3 percent each year. Thus, Romney’s Medicaid plan appears more generous than he has previously suggested, but as the CBO’s analysis of Ryan’s proposal has indicated, it would significantly strain the program.

Under Ryan, federal spending for Medicaid would be “35 percent lower in 2022 and 49 percent lower in 2030 than current projected federal spending” and as a result “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.”

* Via Center on Budget and Policy Priorities (CBPP), this percentage normalizes the growth rate to take out the effects of 2014.

HEINEMAN: 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. 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.

Watch it:

Republican governors penned a letter to the super committee last month arguing that states would accept additional cuts if the federal government extended “new flexibility” that would give governors greater control over Medicaid program and loosen federal restrictions. However many of those reforms — like block granting Medicaid, for instance — would result in significant reductions in federal spending, the very same reductions that Heineman is now trying to avoid.

The poll queried Americans’ views on a number of health-related issues. One question and the public’s response stands out. The poll asked respondents if they prefer a bigger government providing more health care services or a smaller government providing less health care services. 52 percent of Americans chose the former option and only 37 percent chose the latter. The researchers who conducted the poll juxtaposed this with a separate New York Times/CBS poll taken earlier this year showing that most Americans wanted to see a smaller government providing less services — seeming to indicate that the provision of health care services is a particularly popular government role:

Interestingly, only 7 percent of respondents said that the government’s role in health care is the “most important problem in the nation’s medical care system.” A whopping 51 percent of respondents named health care costs as the top problem instead.

– 46 states Introduce new provider rate restrictions, up from 39 states in 2011.

– 48 states Add provider taxes to hospitals and nursing facilities to compensate for the provider rate cuts.

– 18 states Cut benefits for consumers.

– 13 states Expand benefits, the same number as this year.

– 3 states Cut eligibility, up from two in 2011.

– 14 statesIncrease copays, up from five states in 2011.

– 33 states Expand long-term care, compared to 32 last year.

– 13 states Expand benefits, the same as this year.

– 15 states Expand eligibility, compared to 28 in 2011.

Meanwhile, state economies also feel the impact of the cuts. A June report from Families USA shows that a 5 percent cut in federal Medicaid cut means a $3.8 billion loss to New York’s economy and almost 30,000 jobs lost.

Perry touted his “spending reduction” during an appearance on Fox News Business last night, stressing that while he’s willing to significantly cut the nation’s safety net programs, he won’t limit military spending:

PERRY: We know that one of the places that Mr. [Ron] Paul is going to talk about cutting and that’s in defense. And I will tell you, I’m not ready to put our national defense on the line for that kind of a meat cleaver. So there is obviously places we can cut…you look at what Paul Ryan is doing on Medicare. There are some great members of the Congress that have plans that can help us reduce spending and let me tell you, that’s what we need to have.

Watch it:

But Perry has it backwards: cuts to the military would likely have almost zero impact on national security — as they would target the many wasteful, costly weapons programs, many of which are barely even used. Reductions to Medicare and Medicaid, on the other hand, would significantly increase costs for beneficiaries and the nation and undermine care for lower-income Americans who need it most.

Opinion surveys show that the public shares these priorities and routinely ranks cutting defense spending ahead of Medicare and Medicaid cuts.