Class War — On MedicAid and MediCare

The Quiet War on Medicaid

By GENE B. SPERLING12/25/2016

Progressives have already homed in on Republican efforts to privatize Medicare as one of the major domestic political battles of 2017. If Donald J. Trump decides to gut the basic guarantee of Medicare and revamp its structure so that it hurts older and sicker people, Democrats must and will push back hard. But if Democrats focus too much of their attention on Medicare, they may inadvertently assist the quieter war on Medicaid — one that could deny health benefits to millions of children, seniors, working families and people with disabilities.

Of the two battles, the Republican effort to dismantle Medicaid is more certain. Neither Mr. Trump nor Senate Republicans may have the stomach to fully own the political risks of Medicare privatization. But not only have Speaker Paul D. Ryan and Tom Price, Mr. Trump’s choice for secretary of health and human services, made proposals to deeply cut Medicaid through arbitrary block grants or “per capita caps,” during the campaign, Mr. Trump has also proposed block grants.

If Mr. Trump chooses to oppose his party’s Medicare proposals while pushing unprecedented cuts to older people and working families in other vital safety-net programs, it would play into what seems to be an emerging strategy of his: to publicly fight a few select or symbolic populist battles in order to mask an overall economic and fiscal strategy that showers benefits on the most well-off at the expense of tens of millions of Americans.

Without an intense focus by progressives on the widespread benefits of Medicaid and its efficiency, it will be too easy for Mr. Trump to market the false notion that Medicaid is a bloated, wasteful program and that such financing caps are means simply to give states more flexibility while “slowing growth.” Medicaid’s actual spending per beneficiary has, on average, grown about 3 percentage points less each year than it has for those with private health insurance, according to the Center on Budget and Policy Priorities — a long-term trend that is projected to continue. The arbitrary spending caps proposed by Mr. Price and Mr. Ryan would cut Medicaid to the bone, leaving no alternative for states but to impose harsh cuts in benefits and coverage.

Mr. Price’s own proposal, which he presented as the chairman of the House budget committee, would cut Medicaid by about $1 trillion over the next decade. This is on top of the reduction that would result from the repeal of the Affordable Care Act, which both Mr. Trump and Republican leaders have championed. Together, full repeal and block granting would cut Medicaid and the Children’s Health Insurance Program funding by about $2.1 trillion over the next 10 years — a 40 percent cut.

Tom Price, President-elect Trump’s choice for secretary of health and human services, has made proposals to deeply cut Medicaid. Joshua Roberts/Reuters

Even without counting the repeal of the A.C.A. coverage expansion, the Price plan would cut remaining federal Medicaid spending by $169 billion — or one-third — by the 10th year of his proposal, with the reductions growing more severe thereafter. The Henry J. Kaiser Family Foundation estimated that a similar Medicaid block grant proposed by Mr. Ryan in 2012 would lead to 14 million to 21 million Americans’ losing their Medicaid coverage by the 10th year, and that is on top of the 13 million who would lose Medicaid or children’s insurance program coverage under an A.C.A. repeal.

The emerging Republican plan to “repeal, delay and replace” the A.C.A. seeks to further camouflage these harmful cuts. Current Republican plans to eliminate the marketplace subsidies and A.C.A. Medicaid expansion in 2019 would create a health care cliff where all of the Medicaid funds and subsidies for the A.C.A. expansion would simply disappear and 30 million people would lose their health care.

In the face of such a manufactured crisis, the Trump administration could cynically claim to be increasing Medicaid funding by offering governors a small fraction of the existing A.C.A. expansion back as part of a block grant. No one should be deceived. Maintaining a small fraction of the current Medicaid expansion within a tightly constrained block grant is not an increase.

Some might whisper that these cuts would be harder to beat back because their impact would fall on those with the least political power. Sweeping cuts to Medicaid would hurt tens of millions of low-income and middle-income families who had a family member with a disability or were in need of nursing home care. About 60 percent of the costs of traditional Medicaid come from providing nursing home care and other types of care for the elderly and those with disabilities.

While Republicans resist characterizations of their block grant or cap proposals as tearing away health benefits from children, older people in nursing homes or middle-class families heroically coping with children with serious disabilities, the tyranny of the math does not allow for any other conclusion. If one tried to cut off all 30 million poor kids now enrolled in Medicaid, it would save 19 percent of the program’s spending. Among the Medicaid programs at greatest risk would be those optional state programs that seek to help middle-income families who become “medically needy” because of the costs of having a child with a serious disability like autism or Down syndrome.

Democrats at all levels of government must aggressively communicate the degree to which these anodyne-sounding proposals would lead to an assault on health care for those in nursing homes and for working families straining to deal with a serious disability, as well as for the poorest Americans. With many Republican governors and local hospitals also likely to be victimized by the proposals of Mr. Ryan and Mr. Price, this fight can be both morally right and politically powerful. Republicans hold a slight majority in the Senate. It would take only three Republican senators thinking twice about the wisdom of block grants and per capita caps to put a halt to the coming war on Medicaid.

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