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Meet the New Face of Medicaid

May 11, 2011

If you were wondering what impact the Paul Ryan budget passed last month by all but four House Republicans will have on American health care, the Kaiser Family Foundation and the Urban Institute have your answer. If enacted, the GOP repeal of the 2010 Affordable Care Act (ACA) combined with the conversion of Medicaid into an underfunded system of block grants to the states would result in up to 44 million Americans losing health insurance. Which means that the new face of Medicaid isn't someone who is poor, disabled or elderly, but instead that of Mississippi Governor Haley Barbour.

Currently, the $300 billion Medicaid program serves roughly 60 million Americans. On average, the federal- government picks up 57% of the tab, with poorer states like Mississippi and Alabama getting 75% of the funding from Washington. Medicaid not only pays for a third of nursing home care in the United States; it covers a third of all childbirths. (In Texas, the figure is one-half.) As with Medicare, Medicaid provides insurance for substantially less (27% for children, 20% for adults) than private insurers.
By extending Medicaid coverage to families earning up to 133% of the poverty level, starting in 2014 the new health care law will brings insurance to millions more Americans. A March study by the Commonwealth Fund revealed that revealed that when fully implemented, the ACA will bring relief to "nearly all of the 52 million working-age adults who were without health insurance for a time in 2010."
Not if the Republicans get their way.
With the passage of the Ryan 2012 budget proposal, Republicans voted to slash Medicaid funding by $1 trillion over 10 years while sending the remaining dollars as block grants to the states. As it turns out, that gambit would not only gut the 2010 Affordable Care Act law, but guarantee than millions of low income Americans are deprived of health care. As Jonathan Cohn explained:

If the law changes and Medicaid becomes a block grant, then every year the federal government would simply give the states a lump sum, set by a fixed formula, and let the states make the most of it. Conservatives claim block grants would give states the flexibility they need to make their programs more efficient. But, as Harold Pollack has noted in these pages, states already have some flexibility. And because demand for Medicaid tends to peak during economic downturns, when state tax revenues fall, the likely impact of a block grant scheme would be to make Medicaid even less affordable at the time it is most necessary.
That's not to say plenty of governors wouldn't take advantage of block grant status to change their Medicaid programs in ways they cannot now. They surely would--by capping enrollment, thinning benefits, increasing co-payments, and so on.

Which is exactly what they are already doing now. Ezra Klein summed up the findings from a recent study by Kaiser Family Foundation and the Bipartisan Policy Center:

Twenty states implemented benefit restrictions in the past year. In fiscal year 2010, 39 states implemented Medicaid provider rate cuts or freezes (up from 33 in fiscal year 2009), and 37 states have provider rate restrictions planned for the next fiscal year.

Now in its latest state-by-state analysis, Kaiser has detailed the devastating impact of the budget backed by 235 House Republicans:

Projected federal spending on Medicaid for the 10-year period 2012 to 2021 would fall by $1.4 trillion, a 34 percent decline. By 2021, states would receive $243 billion less annually in federal Medicaid money than they would under current law, a 44 percent reduction.
The effect on enrollment in state Medicaid programs could vary widely. By 2021, between 31 million and 44 million fewer people nationally would have Medicaid coverage under the House Budget Plan relative to expected enrollment under current law, the analysis finds, examining three possible scenarios using different assumptions about how states might respond to lower federal funding. Most of those people, given their low incomes and few options for other coverage, would end up uninsured.
The House Budget Plan also could affect health centers, hospitals and safety-net facilities that serve low-income and uninsured people and rely heavily on Medicaid revenues. By 2021, hospitals could see reductions in Medicaid funding of between 31 percent and 38 percent annually, or as much as $84.3 billion, under the plan compared with projected funding under current law. The reductions would come at a time when millions more people would lack coverage, increasing the potential demand for uncompensated hospital care.

Which suits Mississippi Governor Haley Barbour just fine. After all, the Republicans' dream future is Mississippi's nightmare present.
At the National Governors Association meeting two months ago, Barbour called for the Medicaid program to be converted into block grants for the states to control. To make his case, Governor Barbour updated Ronald Reagan's old myth of the "welfare queen":

"We have people pull up at the pharmacy window in a BMW and say they can't afford their co-payment."

That whopper didn't merely earn a "Four Pinocchio" rating from the Washington Post. It also obscured the fact that Haley Barbour's Mississippi is already home to perhaps the least generous Medicaid program in the nation:

Mississippi provides some of the lowest Medicaid benefits to working adults in the nation. A parent who isn't working can qualify only if annual family income is less than 24 percent of the poverty line. Working parents qualify only if they make no more than 44 percent of the federal poverty level. Seniors and people with disabilities are eligible with income at 80 percent of the poverty line...
Translated from the federal poverty guidelines, that means a working Mississippi couple with one child could earn no more than $8,150 a year and still qualify for Medicaid, seniors and people with disabilities could earn no more than $8,700, and a pregnant woman could earn no more than $20,000 a year.

But those numbers don't begin to capture the failure of the Mississippi health care system. In its 2009 state scorecard, the Commonwealth Fund ranked Mississippi dead last in its assessment of health care access, prevention, equity, affordability and lifestyles. In December, the "America's Health Rankings" project also put Mississippi at 50th among the states. And in 2009, another UnitedHealth Group funded study concluded that Haley Barbour's home state had the unhealthiest residents in America.
Mississippi isn't the only poster child for the Republican health care horror story. In Arizona, Governor Jan Brewer's real-world death panels are already offering a glimpse into the national dystopian future. And after Governor Rick Perry initially called for ending his state's participation in Medicaid altogether, Texas Republicans proposed savaging its Medicaid program now serving 3.1 million people:
The total effect of the cuts -- estimated at $7.6 billion a year, or roughly a third of Texas' Medicaid spending -- will kill jobs, strain the state's economy and put people's lives at risk, experts across the state have said in recent weeks.
Which is sadly right. When it comes to health care as with education, incomes, working conditions and so much else, Republicans have seen the future - in Mississippi.


About

Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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