WASHINGTON – The House Republican budget would leave up to 44 million more low-income people uninsured as the federal government cuts states' Medicaid funding by about one-third over the next 10 years, nonpartisan groups said in a report issued Tuesday.
The analysis by the Kaiser Family Foundation and the Urban Institute concluded that Medicaid's role as the nation's safety net health care program would be "significantly compromised ... with no obvious alternative to take its place," if the GOP budget is adopted.
The plan passed by House Republicans last month on a party-line vote calls for sweeping health care changes, potentially even more significant than President Barack Obama's insurance overhaul. So far, most of the attention has gone to the Republican proposal to convert Medicare into a voucher-like system for future retirees. But Medicaid would also be transformed.
The Republican budget has no chance of passing the Democratic-led Senate, or being signed into law by Obama. But individual components could advance as part of debt reduction talks between Vice President Joe Biden and congressional leaders.
A spokesman for the author of the GOP budget, Rep. Paul Ryan of Wisconsin, challenged the study's assumptions. The Republican plan will allow Medicaid to grow "at a sustainable rate, so that the health care safety net will be there for those that need it most," said Conor Sweeney. Obama's overhaul will force millions more into a broken system, relegating vulnerable people to second-class care, he added.
Medicaid is a federal-state partnership that now covers more than 60 million low-income children and parents, seniors, including most nursing home residents, and disabled people of any age. Under the GOP plan, Medicaid would be converted from an open-ended program in which the federal government pays about 60 percent of the cost of services, into a block grant that would give each state a fixed sum of money.
The budget would also do away with the right to Medicaid benefits under federal law, and repeal a coverage expansion to low-income adults included in Obama's health care law.
Republican governors say they can save taxpayers billions through a block grant that would let them clear away federal red tape and design health care systems tailored to local needs. But the study cast doubt on whether governors would have enough money coming in from Washington to adequately meet the needs of their states and avoid sharp cuts in services.
Under current laws, Medicaid is expected to cover 76 million people in 2021, the end of the ten-year estimating window used in federal budgeting. Of those, some 17 million would gain coverage under Obama's expansion.
The study estimated that 31 million to 44 million people would lose coverage from the combined impact of the block grant and repealing Obama's law. Researchers said they gave a range to account for different approaches that states might take to reduce their Medicaid rolls. Under the worst case, Medicaid enrollment would plunge by nearly 60 percent from current projected levels.
The study found that federal spending for Medicaid would decline by $1.4 trillion from 2012-2021, a reduction of about one-third from what is now budgeted. Southern and mountain states would face the steepest cuts. Florida, for example, would take a 44 percent hit, while Nevada would get a 41 percent reduction.
Hospitals, community health centers and other health care providers that serve low-income people would be disproportionately affected. In 2021 hospitals would face Medicaid funding cuts of $84 billion, the study said, at a time when growing numbers of uninsured people would be going to emergency rooms for treatment.
"Some cuts in payments to hospitals are inevitable if health care spending is to be reduced," the report said. "But these reductions are of such a magnitude that they have quite serious implications ... higher levels of uncompensated care facing hospitals would inevitably lead to increased spending by state and local governments."