House-Passed Budget Includes Big Medicaid Cuts on Top of Health Reform Repeal

Asked Sunday about the House-passed budget’s proposal to cut Medicaid by $810 billion over the next ten years, Budget Committee Chairman Paul Ryan (R-WI) replied, “we’re taking away the massive increases in ObamaCare that are attributable to Medicaid.”  But, the $810 billion in cuts (for the period 2013-2022) are in addition to eliminating health reform’s Medicaid expansion and would come instead from converting Medicaid to a block grant at reduced funding levels.  The $810 billion figure itself is reflected in the House budget as Medicaid savings separate from the savings from repealing the health reform coverage expansions.

Repealing health reform would cut federal Medicaid expenditures by $642 billion, according to the latest Congressional Budget Office estimates, issued after the Supreme Court upheld health reform while modifying the law related to the Medicaid expansion.  Altogether, the House budget would reduce federal Medicaid spending by about $1.45 trillion over the next ten years, relative to current law (see chart).

Our earlier analysis found that the House budget’s block grant would cut Medicaid funding by 34 percent by 2022, compared to what states would receive under the existing financing structure.  That 34 percent figure excludes the effects of repealing health reform’s Medicaid expansion.

Last year, when Chairman Ryan included a similar Medicaid block-grant proposal in the House budget, the Urban Institute estimated that it would lead states to drop between 14 million and 27 million people from Medicaid by 2021 and reduce already-low reimbursement rates to hospitals, doctors and nursing homes by another 31 percent.  Those cuts would be on top of the impact on the number of insured people that repeal of health reform would have.