Medicaid advocates expect Dem proposal for program cuts

Medicaid advocates came out of a meeting with Democrats this week expecting the party to propose cuts to the entitlement program.

They expect those proposals would be smaller than the cuts that will be in the Republicans’ 2012 budget proposal, and some see them as a way for Democrats to start the bargaining process with the GOP.

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As many as 100 Medicaid advocates attended a meeting with House Democratic staffers Wednesday to try to craft a unified response as Republicans prepare to unveil their spending plan for next year, The Hill has learned.

Democrats did not lay out a grand strategy or formally propose a plan to cut Medicaid spending, instead calling on advocates to keep the pressure on the GOP.

"It's a huge, huge threat," one advocate said of the GOP budget proposal, which is expected to be unveiled in the first week of April. "Finally people are paying attention to Medicaid."

Entitlement reform has dominated the spending debate. Republicans have pushed for it as a way to cut spending, which is a huge concern for the large class of freshman GOP lawmakers.

And House Budget Committee Chairman Paul Ryan (R-Wis.) acknowledged last week that the GOP will be handing Democrats a weapon when their spending plan comes out.

Advocates came out of the Wednesday meeting with mixed feelings. Some criticized Democrats' late response, while others praised them for trying to unite opposition to Republican cuts that could be as high as $1 trillion.

One lobbyist said the Democrats were five months late to the party and now had no choice but to acquiesce to the Republican terms of the debate.

Earlier action could have given lawmakers time to come up with policy solutions instead of just proposing smaller cuts, the source said; for example, drugmakers could have been required to offer rebates for low-income seniors enrolled in both the Medicare and Medicaid programs.

"Democrats do not have a strategy for what they want," the lobbyist said. "They're being largely reactive."

The advocates did not want to go on the record since the meeting was not public.

Sources told The Hill the afternoon event was held in the Rayburn House Office Building and lasted about an hour, with minority staffers from the House Energy and Commerce Committee, the House Budget Committee and the Democratic leadership leading the show and taking questions.

A spokeswoman for Energy and Commerce Committee ranking member Henry Waxman (D-Calif.), a lead organizer of the event, declined to comment about the meeting's goals but did not deny it had taken place.

The size of the cuts on either side of the aisle is still in flux.

Ryan last year released a block grant proposal along with Democrat Alice Rivlin, President Clinton's budget director, that cut $180 billion from the program over 10 years.

Advocates expect Ryan's opening salvo in the 2012 budget to be considerably bigger — up to $1 trillion, some believe — especially since Ryan is expected to propose a repeal of healthcare reform and an extension of the George W. Bush tax cuts, both of which would add to the deficit.

Some advocates say massive cuts to Medicaid could actually be a strategy to undermine the healthcare reform law, which expands the program to more than 15 million Americans.

"I think you could lose the individual mandate, and so what?" one advocate said. "But if you start destroying Medicaid ... the whole thing starts to crumble."

Republicans say they want to preserve, not destroy, Medicaid by making it financially solvent over the long term.

Budget Committee spokesman Conor Sweeney said the Republican budget will make the hard choices to tackle the long-term sustainability of government health programs that he said the "do-nothing-but-demagogue" Democrats have so far avoided.

"It's premature to comment on a budget that has not been completed yet," he added.

In any event, many advocates expect the proposed Republican cuts to be so massive that they'll require the committees to transform the program into block grants even if the budget doesn't spell that out.

That would mean giving states a set amount of money that would no longer increase when the economy goes bad and more people rely on government assistance.

Obama’s budget for 2012 is projected to save Medicaid $33.6 billion over 10 years. Including impacts of other proposals on the Medicaid program, those numbers increase to $36 billion over 10 years.