Republican leaders in Congress have ordered the Committee to supervise Medicaid to reduce $ 880 billion of the next budget. They say that these cuts are not necessarily addressed In Medicaid, the insurance program for 72 million poor and disabled Americans. The cuts could come from Medicare, for example. But Trump has promised not to touch that very popular program. And such a big sum cannot come from any other place.
The Republican process is just beginning, and we still do not know how legislators will change the program. Most of Medicaid’s money goes to states, so the best way to think about the proposal is a cut to state budgets. State legislators could react by eliminating coverage, increasing taxes or cutting other parts of their budget. In today’s bulletin, I will explain some possible scenarios.
Who is covered
Medicaid was designed to divide the medical invoices of a patient: the federal government and the State would pay an established participation. (The contribution of a state depends on how poor it is).
The law is precise about what Medicaid should cover (cancer exams and kidney transplants, for example, but not prosthetic legs, and Republicans cannot change that with a budget bill. Each state has to cover certain populations, including poor children, pregnant women, people with disabilities and patients in elderly homes who run out of money.
Most states also choose to cover an optional group that was added as part of Obamacare in 2014: any person who obtains less than certain income (around $ 21,000 for a single person). Republicans want to impose a work requirement for this group for people who are not disabled. That idea is popular among the public, but would save the federal government only around $ 100 billion, not enough to meet the republican objective.
Bigger objectives
Any other thing to reduce federal government participation would put the burden of states. And the legislators could deal with the problem in their own way. They could cut optional populations such as the Obamacare group. Twelve states have laws that will automatically do this if federal financing falls. If you do not want to drop people, states can eliminate optional benefits, such as the coverage of prescription medications.
After those cuts, states face difficult decisions.
They could pay less to doctors, hospitals and elderly homes for care. But there is a limit. If Mississippi suddenly began paying $ 50 for an echocardiogram instead of around $ 160, cardiologists could stop seeing patients with Medicaid. (Many Medicalid patients already have difficulty finding attention because the program pays doctors very little). The cuts like these could also take out some elderly households or rural business.
Even so, states would still need much more money for Medicaid, generally their second largest expense after education.
Where could they get it? They would have to sacrifice other priorities. One option is to reduce education. Another is to increase taxes. None of these would be required by federal legislation; It depends on the states how they manage. That allows Republicans in Congress to say that they are not reducing the benefits or eligibility of Medicaid, even if that is the inevitable effect in most places.
Too big to fail
Republicans point out that the original pact between Washington and the states have been frayed, and the federals are covering more of their participation. That’s true. Through several accounting tricks, the states have reduced their contributions from Medicaid and have now paid approximately one third of the invoice, on average. In addition, Washington assumed almost the entire cost of Obamacare 2014’s expansion.
But that expansion has become popular Medicaid. More than half of the Americans say that someone in their family has used the program, and only 17 percent support the reduction of their budget. Local legislators probably do not win on voters cutting education or collecting taxes to save Medicaid. That is why the Democrats have decided on Medicaid as their main point of conversation about the budget plan of the Republican Party.
Republicans also tried to reduce Medicaid’s budget in 2017. The base opposition helped defeat the effort, as well as the extensive lobby of the Republican governors, who urged the senators not to leave them with a huge fiscal hole.
The unpopularity of that bill, and its failure, helped the Democrats resume the camera the following year.
Related: Cut Medicaid, tax scholarships and kill invasive plants: a guide to the list of Republican wishes.
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