If Republicans get their way, poor people better hope they never get sick again

Medicaid had a good run, while it lasted.

CREDIT: AP Photo
CREDIT: AP Photo

In 2012, shortly after Republican candidate Mitt Romney selected now-Speaker Paul Ryan as his running mate, a Democratic super PAC convened a focus group to explore whether Romney’s support for Ryan’s budget proposals could be a liability for the presidential candidate. The Ryan Budget, which combines deep cuts to programs like Medicaid and food stamps, big tax breaks for the rich, and Ryan’s signature proposal to repeal Medicare and replace it with a voucher, seemed likely to be unpopular with wide swaths of the electorate.

Yet the focus group uncovered something quite shocking instead. When confronted with the Republican Party’s plan to rewrite America’s social contract, “the respondents simply refused to believe any politician would do such a thing.”

If a health policy student submitted Paul Ryan’s literally unbelievable health care proposals to a college professor, they would receive an F. Ryan could jack up the cost of insuring an individual senior by 40 percent, while simultaneously saddling them with inferior coverage. His primary proposal to insure people who were uninsurable before Obamacare might provide coverage to about 3 million people. Meanwhile, close to 20 million will lose their insurance if Republicans carry out their threat to repeal Obamacare.

The hardest hit group, however, is likely to be the most vulnerable. Republicans plan to cut Medicaid — the primary program providing health care to low-income individuals — by as much as 50 percent over the course of the next ten years. Then they plan to keep going.

Eventually, Republicans would phase out Medicaid, leaving the poorest to fend for themselves.

Sophie’s Choice

To give credit where it is due, Ryan isn’t exactly hiding the overarching goals behind the GOP’s Medicaid proposals. “For decades,” he explains in a white paper laying out the proposals, “conservatives have supported the idea of reforming Medicaid by capping federal funding and turning control of the program over to states.” The goal of these ideas “is to reduce federal funding over the long term.”

Of course, he claims that the Republican plan will also preserve “a safety net for needy, low-income Americans,” but it is unlikely that much of this safety net will remain after the deep cuts contemplated by the GOP.

The core of the Republican Medicaid plan is a choice between two different ways to slash benefits for poor people. Medicaid is a federal grant program that provides large sums of money to states to enable those states to set up health care programs for their low-income residents (typically, states must pick up a fraction of the costs of these programs as well). States that accept these grants (and all of them accept at least some of the funds available through Medicaid) also agree to comply with certain rules governing how their state programs will be run.

The Republican proposal gives states a choice between a “per capita allotment” of funds or a “block grant,” with the former being the default choice. Beginning in 2019, under the per capita option, states would receive a grant indexed to the state’s actual Medicaid spending in 2016 — and would receive no additional federal funds if they wish to provide additional services to their low-income residents. This grant, moreover, would rapidly decline in value.

With each passing year, states would have fewer and fewer real dollars to spend on health care for the least fortunate.

Just like Speaker Ryan’s original 2011 Medicare proposal, which would have phased out Medicare by repealing it and replacing it with a voucher that lost value over time, the Republican Medicaid proposal relies upon health inflation to slowly dismantle Medicaid. According to the Center on Budget and Policy Priorities (CBPP), because the per capita grants grow slower than the rate of health inflation, “the caps would rise by an estimated 1.8 percentage points less per year over the coming decade than the rate of growth in Medicaid per-beneficiary costs that the Congressional Budget Office forecasts.”

With each passing year, states would have fewer and fewer real dollars to spend on health care for the least fortunate.

Additionally, Ryan’s white paper calls for a special phase-out for states that elected to expand Medicaid under the Affordable Care Act, leading to extraordinarily steep overall cuts. As CBPP estimates, “if all states elected a per capita cap, that would require cuts to federal Medicaid funding per beneficiary of about 50 percent by the tenth year, relative to current law, with the cuts growing still deeper after 2026.”

Alternatively, states could elect to receive a “block grant” from the federal government. These block grants will lose value slower than the per capita caps — although CBPP still estimates that “if all states elected the block grant option instead, overall federal funding for state Medicaid programs would be cut about one-third by 2026, relative to current law.” But states that elect to receive a block grant will also have many of the rules intended to protect Medicaid beneficiaries and ensure that federal funds are spent wisely lifted.

As a result, conservative states could potentially shift beneficiaries out of efficient government-run plans and into private plans which provide inferior coverage at higher costs. They could charge premiums to beneficiaries that may not be able to afford them. Or they could offer plans which don’t provide a minimum level of coverage.

A disaster for seniors

It’s worth nothing one more thing about the Republican Medicaid plan, which is that they hope to pass it in conjunction with a Medicare plan which will charge seniors a lot more for inferior health coverage.

Though Medicare is the primary federal health program serving seniors, Medicaid covers a good deal of care for the aged, especially for those elders who require long-term care. Republicans, however, hope to rapidly diminish the funds available to these seniors through Medicaid while also converting Medicare to a voucher program that will drastically raise costs for the same seniors.

The result will be a catastrophe not only for the elderly, but for the families of seniors who now will need to find the funds to continue care for their parents and their grandparents.