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Study: Republican Plan Would Chop Medicaid By $1.7 Trillion

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The House Republican plan to repeal President Barack Obama’s health law and turn Medicaid into a block grant program would save the federal government $1.7 trillion from 2013 to 2022, a 38-percent spending reduction, according to a report this week by the Urban Institute for the Kaiser Family Foundation.

It would also result in 31 million to 38 million fewer people getting Medicaid coverage in 2022, according to the report. The entitlement program, which is jointly financed by the state and federal governments, now provides health coverage to about 62 million poor people, about half of whom are children.

The block grant idea — paying a fixed sum to states — was formulated by Rep. Paul Ryan, Mitt Romney’s vice presidential running mate and chair of the House Budget committee, and passed by the Republican-controlled House of Representatives in 2011 and 2012. The strategy is part of the GOP plan to cut the nation’s $1 trillion federal deficit.

Romney backs a similar Medicaid block grant strategy that would cut $100 billion a year from Medicaid starting in 2013. Under Romney’s plan, federal payments to the states for Medicaid would grow at 1 percentage point a year above the Consumer Price Index. That would slow funding increases, but give states greater freedom in how they use the money, including the ability to cut eligibility or benefits to meet their budget needs. Today, the federal government sets minimum rules and guidelines and must approve any major changes to the program.

The Urban Institute analysis, which updates an analysis originally done in May 2011, said the House block grant plan would cut funding to hospitals by as much as $363.8 billion, and payments to nursing homes by $22.2 billion.

Of the $1.7 trillion cut to Medicaid spending, $932 billion of the reductions come from repealing the Medicaid expansion in Obama’s health law and $810 billion is a result of spending cuts that are part of the block grant.

Under the health law, Medicaid would expand to cover as many as 17 million more people starting in 2014. States have the option to decide whether to expand eligibility, and several Republican-led states including Florida and Texas say they can’t afford the expansion.

This article was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.

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Comments (9 Responses)

  1. David Snow says:

    The Strength of a Nation can be measured by how the weakest members of the society are treated. Romney-Ryan will weaken the country we live in by targeting those who can least afford to shoulder the burdens with more debt and suffering.

  2. Glen S says:

    David Snow, do you really want this to become a partisan issue? The debt over the last 3 1/2 years increased $5 trillion. This is more than any president before him. Sooner or later everyone is going to suffer do to this.

    By the way: Medicaid is a state program. Co-financed by the federal government.

  3. greg says:

    The vast majority of the debt accumulation over the last 31/2 years is still a result of the spending during the last administration not the current one. Debt accumulation doesn’t stop just because we have an election. Spending cuts of this nature would be a disaster to the people who desperately need the services provided by Medicaid. As soon as the baby boomers voice their support for cutting their own medicare prescription benefit that was financed totally on borrowed money then I would believe the argument that everyone has to suffer some to fix our fiscal mess. If these kinds of cuts are to be the only way to cut spending then the mantra that the U.S. is a “Christian Nation” is totally without merit.

  4. Glen S says:

    So Greg, the massive deficit from the current administration doesn’t matter? Wow, I need to explain this interesting theory to my economy professors.

  5. greg says:

    Glen, the debt and deficit are 2 different things. If you don’t know that I doubt you have ever had an economics professor. The deficit under Obama has gone down. It’s funny to me that Dick Cheney said the Reagan proved that deficits don’t matter but under a democrat they all of a sudden do. Bill Clinton and Barack Obama are the only 2 presidents in my life time who have shrunk the deficit. I suggest you do some reading of Bruce Bartlett, former Reagan economic advisor. Looking to Europe you can see the effects of the republican austerity plan in action.

  6. Glen S says:

    Greg,
    I’m not sure what statistics you are using to determine that the budget deficit has diminished, but they are really incorrect. The Obama administration has not submitted a budget then adopted by congress in his term in office. If you are pointing toward the Affordable Care Law, it has not even been fully implemented.

    I am completely aware that debt and deficit are two different things. They have both increased during this president’s term in office. To claim otherwise is false.

  7. Pat says:

    Very biased, very political and one sided. I am surprised and disappointed. Do you really think that the current Obama administration will be any better for people with disabilities? Look at the record, Obama
    chose a very oppositional person for heading up government Autism counsel, legislation and funding. We are promised everything, but nothing is free. We will pay one way or another. There is no such thing as unlimited spending, ‘the borrower is slave to the lender’ who owns our trillion dollar loans? China and other nations who are very unsympathetic to their own disabled. Or get so in debt only Middle Eastern Oil money with it,’s strings to Shrira law will be able to bail us out. Caveat Emptor.
    We are heading for the UN to dictate Our lives ( and our Sp needs children’s lives) like never before!

  8. Medicare Utah says:

    US spending almost 30 to 40 percent of money on health insurance this is very big amount for their economic status. Republicans are looking to improve their economic status.

  9. vanessaelizebeth says:

    The House budget plan would drastically reduce Medicaid enrollment, and given the low incomes of Medicaid beneficiaries.

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