GOP zeroes in on changes to Medicaid
While Democrats have been pounding the drum against proposed changes to Medicare, Republicans appear far more likely to pursue an overhaul of Medicaid, the healthcare program for the poor.
Medicaid has grown in size in recent years, with ObamaCare extending coverage to millions of low-income people who hadn’t qualified before.
But Republicans warn of the program’s growing costs and have pushed to provide that money to states in the form of block grants — an idea President-elect Donald Trump endorsed during the campaign.
Vice President-elect Mike Pence signaled in an interview with ABC this month that the incoming administration planned to keep Medicare as it is, while looking at ways to change Medicaid.
“I think President-elect Trump made it very clear in the course of the campaign that, as president, we’re going to keep our promises in Social Security and Medicare,” Pence told ABC.
“With regard to Medicaid, though, I will tell you, there’s a real opportunity, there’s a real opportunity as we repeal and replace ObamaCare to do exactly what the president-elect also said on the campaign, and that is block granting Medicaid back to the states.”
Block grants would mean limiting federal Medicaid funds to a set amount given to the states, rather than the current federal commitment, which is more open-ended.
Pence implemented policies as governor of Indiana that would require Medicaid enrollees to pay a small monthly contribution towards their coverage into a health savings account.
That idea could soon be going national. Trump’s nominee to run the Centers for Medicare and Medicaid Services, Seema Verma, helped Pence develop the changes to Medicaid in Indiana.
While Trump is signaling a focus on Medicaid, Democrats have focused instead on the possibility of changes to Medicare.
Incoming Senate Democratic Leader Charles Schumer (D-N.Y.) has warned Democrats will fight “tooth and nail” against the GOP’s proposed Medicare overhaul.
“I say to my Republican colleagues: Turn back, because we will fight you on this tooth and nail, we will win, you will lose,” he said.
Changing Medicare has long been considered politically perilous. The seniors who receive it are a powerful voting constituency that could be especially important in the 2018 midterms.
Overhauling Medicaid, which provides coverage for low-income and disabled people, might not generate the same political blowback.
Some Democrats are warning the party needs to stop focusing on a Medicare fight that may never come.
Former Obama White House adviser Gene Sperling wrote a New York Times op-ed this week warning of a “quieter war on Medicaid.”
“If Democrats focus too much of their attention on Medicare, they may inadvertently assist the quieter war on Medicaid — one that could deny health benefits to millions of children, seniors, working families and people with disabilities,” Sperling wrote.
“Of the two battles, the Republican effort to dismantle Medicaid is more certain,” he wrote.
Sperling in his op-ed noted that Medicaid serves a wide array of people. Much of its spending, for example, is on nursing home care.
Republicans have long advocated block grants as a fiscally responsible way to limit federal spending and empower the states, giving them room to innovate.
A sister proposal, also backed by Republicans, called “per capita caps” would limit federal spending on each Medicaid enrollee, rather than overall.
Democrats, though, argue the block grants or per capita caps would ultimately lead to harmful cuts to Medicaid, leading to people losing coverage if states, unable to pick up the cost themselves, cap enrollment and turn people away.
Sperling pointed to a Kaiser Family Foundation analysis of the House Republican budget in 2012, which called for block grants for Medicaid. The analysis found that the plan would cause between 14 million and 21 million people to lose coverage.
Democrats note that the Medicaid block grants would come on top of the GOP’s promise to repeal ObamaCare. The repeal bill, which Republicans are aiming to pass next year, would likely eliminate the expansion of eligibility for Medicaid that has provided coverage to about 11 million people.
Gail Wilensky, who was head of the Centers for Medicare and Medicaid Services under President George H.W. Bush, argued that under the current system, states often game the system to draw down extra federal funds and do not have enough incentives to spend Medicaid dollars wisely.
If federal money for the program were fixed, “states would have much greater incentives to use it as efficiently as possible,” she said.
Still, Wilensky said per capita caps could be preferable to a plain block grant, because capping funding per person would still allow for funding to grow if more people enrolled, for example, during an economic downturn.
“If you just had a block grant you could leave the jurisdictions vulnerable to major swings in the economy,” she said.
Republicans also say their plans would allow states to make changes to the Medicaid program without having to go through a lengthy waiver approval process with the federal government. More states could choose to enact requirements like Indiana’s, making people pay a share toward their care. The Obama administration has rejected work requirements for Medicaid enrollees, but the idea could reemerge under Republicans.
Kosali Simon, a professor at Indiana University who studies the Medicaid program in the state, said that Indiana has seen strong enrollment in its modified Medicaid program, with more than 400,000 people joining.
She said it is uncertain how other states would react to Indiana-style changes.
“Would it be the same everywhere else? It’s hard to know because other places have gotten used to having Medicaid without any cost sharing,” she said.
Simon said the level of cuts to Medicaid would depend in large part on how much federal money is included in a block grant or per capita cap proposal, something Republicans have not yet specified.
“What happens if that number is low but expenses turn out to be high?” she said.