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It’s a pretty big deal on Tuesday night, that is State of the Unionwhen the President Joe Biden asking Republicans to promise not to cut Medicare or Social Security.
It is not clear how binding the pledge is or what it means. Republicans have a long history of proposing “reforms” to Medicare and Social Security that, as my friend HuffPoster says. Arthur Delaney noted afterwards, actually benefited from one or the other.
And at least some Republicans didn’t get the memo. During a Thursday radio interviewSen. Ron Johnson (R-Wis.) reiterated his belief that Social Security is a “Ponzi scheme” and his support for requiring the program to seek reauthorization every few years – a plan that Sen. Rick Scott (R-Fla.) laid out on polite language last year.
But assume, for a moment, that the GOP leader true to his word and manage to keep the party away from Medicare and Social Security. Consider, also, that the Republicans carry out their threats to block the increase in the federal government’s debt authority, jeopardizing America and maybe the world economy, until the Democrats agree to cut major spending.
Given the budget math, that will almost certainly force cuts in other major programs: Medicaid.
HUM image via Getty Images
Medicaid, of course, is a government health insurance program for low-income Americans. The federal government provides most of the money and sets broad guidelines for how it works, leaving program details and management to the states, which also contribute funds.
In fiscal year 2021, total Medicaid spending is more than $700 billion and enrollment was more than 80 million. That’s about a quarter of the U.S. population, and more beneficiaries than you’ll find in any other health insurance program run or administered by the federal government.
Yes, Medicaid is now included more people instead of Medicare, the beloved Great Society-era program that provides basic insurance for the nation’s elderly.
This growth in Medicaid is a problem, as most Republicans and their conservative allies see it. He thinks the program involves too many people and costs too much – mainly because, he insists, it does not even serve its population well.
Are they right? What do big Medicaid cuts mean in practice?
And will Americans find it more palatable than trying to get Medicare or Social Security?
Medicaid has grown because of great need.
Medicaid traces its history back to the same 1965 law that created Medicare. And like Medicare, the legal language authorizes and regulates Medicaid living in the Social Security Act as an amendment.
But unlike Medicare or Social Security, Medicaid isn’t something that everyone pays for during their working years and then takes over when they retire. This is a special program for low-income Americans, at any stage in life who meet the eligibility requirements.
Initially, the requirement was associated with the rule for “old”welfare“the system so that Medicaid is open mainly to poor Americans who are pregnant women, small children, the elderly or the disabled. Over the years, the program has been available to more people, thanks to a combination of federal and state actions.
One of the biggest increases came through the Affordable Care Act, which gives states additional funding if they open the Medicaid program to everyone in households with incomes below or just above the poverty line. Most countries are already doing this. The exception is the 11 states that Republican officials in charge have rejected, as part of their ongoing resistance to Obamacare.
(You can read about one state, Florida, and one Republican state official, Governor Ron DeSantis, here.)
“It’s a lifeline during a pandemic.”
– Allison Orris, Center on Budget and Policy Priorities, talking about Medicaid
Medicaid meets a very clear need. Most people in the program will not be able to afford insurance or cover their own medical expenses because they do not have enough money. And Medicaid makes a very clear difference in these people’s lives.
Something long and constantly evolving pile of studies shows that Medicaid has, for example, improved access to care and reduced medical debt. There is also evidence better health outcomesespecially for pregnant women and small childrenalthough the direct link and relationship to life expectancy it’s more ambiguous.
Nowhere is this more true than during COVID-19, when medical care needs are greatest and job losses threaten health care access for millions.
As Allison Orrissenior fellow in Center on Budget and Policy Prioritiestold me in an email, Medicaid “is a lifeline during a pandemic.”
The GOP plans to date Medicaid in the Reagan era.
Over the years, conservative critics have pointed to a number of real problems with Medicaid — most obvious among them, limited access to specialists. Medicaid beneficiaries often have trouble finding a specialist who will see them and, even if they can, they have to wait months for an appointment. But a big factor in the problem is Medicaid famous low payment rate, which makes doctors lack of enthusiasm to see Medicaid patients.
A bump in payment can solve that problem, or at least make it less severe. That hasn’t happened yet, which isn’t surprising. Historically, means-tested programs have not commanded widespread and popular public support for universal programs because their constituencies are less powerful – and, in countries that routinely distinguish between the “deserving” and “undeserving” poor, also less politically sympathetic.
“The assumption that there is a lot of easy money to save is wrong, I learned about the state Medicaid program.”
– Drew Altman, KFF
There is a saying in politics that poor programs stay poor, and there is a lot of truth to that. It also helps explain why Medicaid has been the object of Republican budget attacks several times in the past, going back to the Reagan era.
Big Medicaid cuts were part of the former House Speaker’s agenda Newt Gingrich (R-Ga.) try to pressure the President Bill Clintonled to the death of 1995 and 1996, and they were the main part of the former Speaker’s budget. Paul Ryan (R-Wis.) kept propose a decade ago.
Most recently, cutting Medicaid is part of the legislation for cancel it The Affordable Care Act that House Republicans passed and Senate Republicans came close to passing as well.
The details of these proposals vary, but they all involve two main component. They envisioned last there, open-ended guarantees the Federal funding is enough to cover But many people become eligible for the program. And all were envisioned substantially reduction in funding relative to projection.
Medicaid beneficiaries will feel the pain.
If Republicans do turn their attention to Medicaid, whether as part of a new debt ceiling threat or in some upcoming legislation, they will likely propose another version of the change — and will promote it as a way to improve it. State flexibility when wringing waste out of the program.
State officials will definitely like more discretion over the program (they almost always do), and Medicaid, like the big program, is definitely a waste. But the idea that efficiency alone can generate huge savings without affecting beneficiaries is untenable. Drew Altmanwho is now president KFF but earlier in his career he supervised Medicaid for the state of New Jersey.
“The assumption that there is a lot of easy money to save is wrong, something I learned running the state’s Medicaid program,” said Altman. “Faced with less money, states can throw people out of the program, reduce benefits, or reduce provider payment rates, which in most states are already very low. There is no magic, and in the end, low-income, disabled and elderly people will be harmed.
That last part is important, and the piece of the Medicaid picture that’s easy to miss. Seniors and people with disabilities represent a minority of enrollees, but most drop out of programs because the services and supports they need are often expensive. Think about the cost of major heart surgery, a type that becomes more common with age, or the cost of an hourly aide for someone with paralysis.
As a result, state Medicaid officials are running out of money “there are no easy options,” according to Robin Rudowitz, KFF’s program director on Medicaid and the uninsured.
“States should remove low-cost children or adults from Medicaid or cut the elderly and people with disabilities with health care needs who require long-term care in nursing homes or the community,” Rudowtiz said.
Medicaid also has political power.
How vulnerable Medicaid is to cuts now is a big, open question.
During the mid-90s shutdown, Clinton cited Medicaid (as well as Medicare) as a reason to resist Gingrich’s budget cuts. In 2017, protests from people with disabilities were a key factor in turning public opinion against the repeal of the Affordable Care Act.
And with so many people in the program now, surely more Americans are aware of the role they play. In the 2020 KFF survey, about 40% said they had been on Medicaid at least once or had a child, while another 26% said they had a friend or family member who had used Medicaid.
Add it up, and you have two-thirds of Americans with either direct knowledge of the program or some direct connection to it. That’s a large swath of the population, more than enough to produce a serious political backlash.
In the past, Altman noted, it was likely that many state officials would cut back, even if those officials were desperate to save. If Medicaid ends up on the GOP agenda, the same thing could happen again.