The Kaiser Family Foundation has released a state-by-state report analyzing the impact of the GOP’s proposal to transform Medicaid into a block grant program and repeal the Affordable Care Act. The Republican budget would eliminate health reform’s expansion in Medicaid coverage and transform the program’s matching rate financing structure — under which the federal government pays 50 to 75 percent of each state’s Medicaid costs — into a block grant that would be less than projected costs. Federal spending on Medicaid would fall by $1.4 trillion from 2012 to 2021 and states will receive less federal funding:
According to the new analysis of the plan conducted by researchers at the Urban Institute working with analysts at the Foundation, total federal Medicaid spending reductions over the next decade relative to current law would range from a 26 percent drop in Washington, Vermont and Minnesota, to 41 percent declines Oregon, Georgia and Colorado and a 44 percent decrease in Florida. The analysis also finds that hospitals could see their Medicaid payments fall by as much as 38 percent, relative to current projections, in 2021. […]
Cuts in federal spending will translate into reductions in enrollment — “even if states were able to achieve substantial efficiencies by adopting policies to reduce the rate of growth in spending,” the report found. Kaiser examined different scenarios for state responses to reduced federal Medicaid spending and estimated 31 to 44 million Americans could lose their health insurance coverage:
The reductions would be greatest in states with large coverage expansions and smallest in states where there is less of an expansion of coverage.” Therefore, the south and mountain regions — states like Florida, Georgia, Nevada, Oregon, Louisiana and Texas (the greatest beneficiaries of expanded Medicaid coverage under the ACA ) — will now see the greatest reduction in federal funding.
Hospitals would also be affected, as cuts in state payments “are inevitable if health care spending is to be reduced.” Consequently, “[b]y 2021, hospitals would face an annual loss of Medicaid revenue of $84 billion just as the number of uninsured and the need for uncompensated care increases.
All of this is in line with previous estimates of past Medicaid block grant proposals. For instance, an analysis of Newt Gingrich’s 1995 block grant proposal concluded that 48 states would have experienced a reduction in federal dollars and more than 6 million people would have lost Medicaid coverage in 2002.