The GOP Still Wants to Gut Medicaid

Sometimes there no joy in being right. Sometimes it's just no fun to say "I told ya so." This is one of those times.

Depending on whom you ask, Mitt Romney choice of Wisconsin Rep. Paul Ryan as a running mate is either inspired [1] or insane [2]; bold [3] or boneheaded [4]; a opportunity for meaningful debate or a triumph of theory [5]. But without a doubt, Romney's pick or Ryan as his running mate has revived the Ryan's seminal budget document, The Path to Prosperity, which would end Medicare as we know it [6] back in the spotlight. (It's OK, really. There would still be a program called "Medicare," [7] but the resemblance would end there.) This is already turning in to bad news for the campaign, as Romney can't win without Florida [8], and it seems neither Mitt Romney [9] nor Paul Ryan [10] can show their faces down there right now.

But a few people have noticed something I pointed out at length about a year ago. He may want to give Medicare a witness-protection-style makeover, but Paul Ryan still wants to gut Medicaid [11]. Apparently, so does Mitt Romney.

Though we'll all hear more about the GOP's dastardly plans for Medicare, we'll probably hear less about their equally destructive plans for Medicaid. That's dangerous, because Medicaid is just as important as Medicare, and the GOP's plans for it could have devastating consequences for millions of Americans.

Forewarned is forearmed. Here's what you need to know about Medicaid and the Ryan/GOP Budget.

1. Medicaid is not the problem. It's part of a larger health care cost problem.
2. Medicaid is not "just a program for poor people." It's also important to most middle- and working-class Americans.
3. The Republican cuts to Medicaid don't lower health care costs. They shift costs to poor, elderly, middle- and working-class Americans.
4. The Republican cuts to Medicaid are just as unpopular as the Republican cuts to Medicare. Democrats compromise with Republicans on Medicaid cuts at their peril.

In past few days Ed Kilgore [12], Meteor Blades at Daily Kos [13], and WaPo's Suzy Khim [14] have been among those to point out the not-so-obvious: Paul Ryan's plan to gut Medicaid, chop it into little pieces, and bury bits of the remains in each state. His plans for Medicare — embraced by the GOP, and endorsed by Mitt Romney — look mild by comparison; like the difference between a manicure and an amputation.

Ezra Klein [15] notes that Ryan's cuts to Medicare “are only 60 percent as large as the cuts to Medicaid and other health-care programs.” But, as Khim points out, when it comes to Medicaid, Ryan exchanges his meat cleaver for a chainsaw and a wood-chipper.

Over the next 10 years, the Ryan plan would cut Medicaid by $642 billion by repealing the Affordable Care Act and by $750 billion through new caps on federal spending—a 34 percent cut to Medicaid spending over the next decade, according to Edwin Park of the Center and Budget and Policy Priorities.

 

Who would that impact? First, by overturning the ACA, the Ryan plan would prevent 11 million people from gaining Medicaid coverage by 2022, according to the Congressional Budget Office’s latest estimates [16].

At the same time, the Ryan plan would turn the entitlement program into a block-grant program. Currently, the federal government provides matching, open-ended funds to states, which each run their own Medicaid program. The Ryan plan would instead give states a block grant with a hard annual cap that would be adjusted to population growth and inflation, but it would not factor in rising health-care costs or economic conditions that impact state budgets. The result? Much less federal money. In exchange, states would have more flexibility to set the parameters for their Medicaid programs.

Remember those Republican governors who are refusing the Medicaid expansion in health care reform [17]? You know, the ones who are ideologically opposed to reducing their uninsured population by half, by expanding Medicaid? The Republican governors who are already leaving federal money on the table, making their Medicaid programs are more restrictive than they need to be [18]? Multiply them by 50. Actually, multiply Texas 50 [19], and you'll have the picture about right.

As I noted a year ago, the GOP's cuts to Medicaid are deeper and more immediate [20] than Republican cuts to Medicare. Ryan's plan doesn't begin really hacking away at Medicare until 2023. Medicaid, however, faces the buzz as early as 2013. And while you may not be able to recognize Medicare by the time Republicans are done with it, you'll need the entire cast of CSI and maybe a little help from Fox Mulder to have a hope of finding identifiable pieces of Medicaid.

And for all that, cutting Medicaid doesn't add up to cutting health care costs [20].

The CBO estimates that the Republican budget's $771 billion in Medicaid cuts over ten years amounts to a 35% cut in Medicaid funding to states. The transformation of Medicaid into a block grant [21] program, ensures that funding will decline because the Republican budget increases these grants annually at the rate of inflation [22], adjusted for population growth — not the rate of inflation for health care, which is far above the general inflation rate [23].

In other words, it's built into the budget that states won't be able to keep up with the costs of the program under the Republican budget, because the Republican budget doesn't take the rate of growth in health care costs into consideration. So, states cut back on the very Medicaid services that the elderly and disabled, and their families, rely upon.

The GOP budget cuts a total $2.17 trillion from Medicaid and related health care programs [24] — $771 billion in Medicaid cuts, plus $1.4 trillion from nixing the Medicaid expansion in health care reform — Some of it by eliminating health care coverage for at least 32 million people [25], and some through drastic cuts in nursing home care coverage [26].

Instead, it shifts costs to families.

"Cost Sharing" — which basically means imposing premiums on Medicaid recipients — is like to increase [27] if Republicans simultaneously slash Medicaid funding to states and give states the "flexibility" to slash Medicaid benefits. Again, it may mean fewer government dollars are spent on health care, but it's cost shifting passed off as cost cutting.

If the goal is simply to get people off Medicaid rolls, then cost sharing can be said to work. A recent study showed that imposing even a 3% premium on participants in Wisconsin's Badger Care program would result in 49,422 fewer children and parents being enrolled in the program. Some of those families might find coverage elsewhere, but the declining levels of employer-provided coverage for low-income workers means that many of them would probably become uninsured. But they're off Medicaid, right? So, the government's not paying for their health care. Thus, costs go down.

The GOP's cuts to Medicaid would have disastrous consequences for countless American families [28].

An overview of the likely impact gives a 10,000 foot view of the collateral damage that's likely to be the result of the kind of cuts Republicans want to inflict on Medicaid.

• Up to 44 million could lose health coverage. [29] Federal spending on Medicaid would fall by $1.4 trillion, or 34% by 2021. States would receive $243 billion less per year. Cuts would produce decreases in Medicaid enrollment, resulting in 31 million to 44 million to lose coverage.
• By 2013, 400,000 would lose vital health care services by 2013, [30] according to the CBO.
• By 2016, 1.7 million children will lose health insurance. [30] If the Republican plan becomes law the CBO estimates that 1.7 million children will lose health insurance by 2016, as half the states could eliminate their CHIP programs, and remaining states could roll back coverage.
• As many as 15 million could be forced off Medicaid rolls [31], according to state-by-state analysis.
• Cuts would seriously impact seniors and people with disabilities. [32] Some 14 million seniors and people with disabilities depend on Medicaid to pay for nursing home care and assisted living — which costs about $72,000 a year, on average [33]. In fact, 70% of nursing home patients are Medicaid recipients. Deep cuts would mean less coverage for nursing home residents, shifting more of the cost on to the elderly and disabled beneficiaries and their families. Sharp reduction in the quality of nursing home care is another likely result. Many elderly and disabled recipients would be unable to obtain coverage elsewhere because of pre-existing conditions.

If it's true that the GOP's plan to gut Medicaid doesn't have the votes to pass the Senate, then it won't become law. Not federal law, anyway. Remember what Paul Ryan said, "This is isn't a budget. This is a cause." That cause may be defeated in D.C. (for now), but it promises to live on in several states, and may yet rise again on the federal level.

It doesn't stop there, either. According to the Center for Budget and Policy Priorities [34], the Ryan/Romney/Republican plan would bleed state budgets of discretionary funding [35] for services and infrastructure that supports low-income, middle-class and working-class Americans. Thinks like job training, employment services, highway and road improvement, public transportation, elementary and high school education funding, public safety and disaster response would all have a date with the buzzsaw. On top of that, the Republican plan would likely cost the U.S. millions of jobs, as states take even more drastic actions to close the resulting budget shortfalls.

So, why put forth a budget that hacks away at Medicaid if  it doesn't lower health care costs,  passes the costs on to families, and leaves some of the most vulnerable out in the cold? Like Paul Ryan says, it isn't a budget, it's a cause. That's why Paul Ryan's budget is modeled after the "catastrophic success" of welfare reform [36]. It works the same way: reducing the number of people receiving help, but not the number of people in need of help.

Why does the GOP want to gut Medicaid? Because conservatives have hated Medicaid since its inception in 1965, for reasons Paul Waldman aptly summarized [37].

...The primary objection here isn't budgetary; it's moral. Many conservatives feel that poverty is a moral failing, and if you're getting help from a government program, you're probably some kind of scamming welfare queen sucking off people who work for a living, getting a benefit you don't deserve. [emphasis added]

Conservatives like Paul Ryan have repeatedly said their goal is "strengthening welfare for those who need it." [38] But what the Republican budget reflects is much closer to House Minority Leader Eric Cantor's statement that Medicaid and Medicare amount to "a safety net in place in this country for people who frankly don’t need one." [39]

But Jim Wallis reminds us that, "a budget is a moral document," [40] that "reveals what your fundamental priorities are: who is important and who is not; what is important and what is not." And the Republican budget casts Medicaid recipients as "the undeserving poor." [41] Cutting aid for those who need it most makes perfect sense, if you believe those who need help the most deserve it the least. (For a more in-depth explanation, I recommend George Lakoff [42].

The budgetary justification for gutting Medicaid is weak. As I pointed out in the previous post, the cost-per-beneficiary for Medicaid is lower than private insurance [43]. But the GOP thinks that "Medicaid is the easiest to win consensus on." [44] That's because their perception of Medicaid is that it's "just a program for poor people."

Paul Ryan himself gave that much away when he said in his Wall Street Journal op-ed that Medicaid reform is really welfare reform [45]. He gives much more away with his desire to model the GOP's "Medicaid reform" on the "successful" welfare reform of the late 90s. As wrote in a previous post, what Ryan sees as the "successful" welfare reform of the 90s was really a classic conservative "catastrophic success." [46]

See, there's the problem with this is that the welfare reform of the late 1990s was not a success. Not unless you're a conservative. And even then it was at best a "catastrophic success" [47] — defined here as "success" that's actually catastrophic for those it's purported to help. That's also what makes it a success. That is, if you're a conservative.

What makes it a success? Well, in a sense, failure. It works if it doesn't work, in other words, especially if it doesn't work for the right people — because the right people are the wrong people. Follow me? No?

...Paul Ryan, in his WSJ op-ed, says that with his roadmap we "strengthen and improve welfare programs for those who need them, we eliminate welfare for those who don't." It's curious, because it really does sound like he wants to duplicate the catastrophic success of the welfare reform of the 1990s. The "success" was getting people off welfare rolls, not necessarily improving their condition. It was about reducing the number of people receiving government assistance, not reducing the need for assistance. Simply put, it's fewer people getting help, instead of fewer people needing help.

It's like the right wing version of a Zen kōan [48] that cannot be understood by the rational mind, and only makes sense to the conservative mind. It only makes sense if you believe that those who need help the most deserve it the least, and their need itself is the greatest evidence of that.

Then, not only does it makes economic sense to slash Medicaid beyond recognition, it makes moral sense. In fact, it seems like common sense. So much so, that it seems safe for Republicans to assume most people will see that Medicaid is "just a program for poor people," and cutting it is both an economic and a moral necessity.

Unfortunately, for the GOP, most people are not "Zen Republicans" and don't see the world through the same distorted lens.

Medicaid is not just a program for poor people [49]. Two thirds of its benefits go to the elderly and disabled. Seniors get fully one quarter of those benefits, which supports long-term nursing home care for for 70 percent — or 1.4 million — nursing home residents in America. And most of them aren't indigent. They're middle-class Americans who've already run through their own money, paying for long-term care.

That makes Medicaid hugely important to middle-class families.

We all have parents or grandparents. As they age, the medical care most of them will need will only get more expensive. Some of them will need long-term care or nursing home care, the cost of which will outstrip our families already stressed financial resources.

A year in a nursing home costs an average of $72,000 [33], according to the Department of Health and Human Services [50], and that's if there aren't an additional costs beyond just getting a bed in a nursing home. Medicare pays for about a month. It's not hard to see how easily and quickly our parents and grandparents can "spend down" their assets to quality for Medicaid.

We love our parents and grandparents, and we won't want their lack of resource or ours to keep them from getting the they need. Families USA's report, "Cutting Medicaid: Harming Seniors and People with Disabilities," [51] shows that Medicare is a big part of how our parents and grandparents get the care they need.

• Medicaid is the primary payer for an estimated 63.6 percent of all nursing home residents. In all states but one, Medicaid is the primary payer for more than 50 percent of nursing home residents.
• In seven states and the District of Columbia, Medicaid is the primary payer for more than 70 percent of all nursing home residents. Those states are the District of Columbia (80.1%), Mississippi (74.7%), Alaska (73.8%), Louisiana (73.0%), New York (72.3%), West Virginia (72.2%), Georgia (71.9%), and Hawaii (70.1%).

It all means that Medicaid is an important program for middle- and working-class families, too.

It's not just us forty-somethings-and-up who see it that way. It's our parents and grandparents too. Many of them realize what the cost of long-term care or nursing home care out would mean to their children, and their grandchildren [52].

It's what stands between our families and what Gene Sperling called "the tyranny of the math.".

And I say this to everybody in this room, there is enormous discussion about the revenue side and the Medicare side. But from a policy perspective, from a values perspective, we should be very deeply troubled by the Medicaid cuts in the House Republican plan. I want to make clear what they are. This is not my numbers, this is theirs.

[53]

After they completely repeal the Affordable Care act, which would take away coverage for 34 million Americans, according to the Congressional Budget Office. After they've completely repealed that, they do a block grant that would cut Medicaid by $770 billion. In 2021, that would cut the program by 35 percent. Under their own numbers, by 2030, it would cut projected spending in Medicaid by half. By 49 percent. So, of course– I don't think– or imply any negative intentions or– lack of compassion. But there is a tyranny of the numbers that we have to face.

And here's the tyranny of the numbers. Sixty-four percent of Medicaid spending goes to older people in nursing homes or families who have someone with serious disabilities. Another 22 percent goes to 35 million very poor children. Now I ask you, how could you possibly cut 35 percent of that budget and not hurt hundreds of thousands, if not millions of families who are dealing with a parent or a grandparent in a nursing home, or a child with serious disabilities. How is the math possible.

If you tried to protect them mathematically, you would have to eliminate coverage for all 34 million children. Now I know some people didn't like when– the President mentioned that this was going to be very negative for families, for those amazingly brave parents. And he may be one of them in our country, who have a child with autism or Down's and who just are enormously committed and dedicated to doing everything they can to give their child the same chance– every other child has.

[54]

But here's the reality. Medicaid does help so many families in those situations. Over the years, we've allowed more middle class families who have a child with autism to get help in Medicaid. There's a medical needy program that says when you spend down– we'll– we'll count the income after you've spent down medical costs.

There's a Katie Beckett (PH) program that was passed by President Reagan that says if you have a child that's in need of institutional care– you can get help from Medicaid. This is– this is a life support for many of these families. But these are the optional programs in Medicaid. These are the ones that go to more middle class families. If you're going to cut 49 percent of projected Medicaid spending by 2030, do you really think these programs will not be seriously hurt.

So when we say that there– that the tyranny of the math is that these– these– this Medicaid– program, this Medicaid cut will lead to millions of poor children, children with serious disabilities, children with autism– elderly Americans in nursing homes losing their coverage or being– or– or having it significantly cut, we are not criticizing their plan. We are just simply explaining their plan.

That's why the more Americans hear about Ryan plan, the more they hate it [55]. That's why even one fifth of right wing seniors hate it [56]. For them, it's a one way ticket to the poorhouse [57].

If Americans who are embracing Rep. Paul Ryan's "Path to Prosperity" -- and that now includes Mitt Romney -- spent a few minutes reviewing a few recent research reports, they just might conclude that the Wisconsin Republican's plan to reduce the deficit might better be renamed the "Path to the Poorhouse" because of what it would mean to the Medicare program and many senior citizens.

Ryan's proposal, which will get new scrutiny now that Romney has made him his running mate, would end the current Medicare program for everyone born after 1956. It would replace Medicare with a system in which beneficiaries would receive a set amount of money from the government every year to buy coverage from private insurers. That money would go straight into insurance companies' bank accounts, which would make them far richer and even more in control of our health care system than they already are.

Cutting Medicaid is as unpopular now as it was when Republicans adopted the Ryan Budget [49].  Cutting Medicaid is especially unpopular in swing states [58]. That's why some Republicans are already trying to distance themselves from the Ryan budget [59], which is now effectively the Republican budget and the Romney budget.

That's why the Romney/Ryan ticket will quickly lose [60] its shine [61], if Democrats just explain just what the Romney/Ryan plans really mean.