off the charts
BEYOND THE NUMBERS
BEYOND THE NUMBERS
Ryan Budget Again Includes a Medicaid Block Grant That Would Add Millions to the Ranks of the Uninsured and Underinsured
House Budget Committee Chairman Paul Ryan’s new budget again proposes to radically restructure Medicaid by converting it into a block grant and slash federal Medicaid funding by $810 billion over the next decade. He would also repeal health reform’s Medicaid expansion. All told, it would add tens of millions of Americans to the ranks of the uninsured and underinsured. Repealing the Affordable Care Act’s Medicaid expansion means that up to 17 million people would no longer gain Medicaid coverage (17 million is the Congressional Budget Office’s estimate of the number of people who would gain coverage if all states adopted the expansion). In addition, the large and growing cut in federal Medicaid funding that would result from the block grant would almost certainly force states to sharply scale back or eliminate Medicaid coverage for millions of low-income people who rely on it today. Under the Ryan plan, the federal government would no longer pay a fixed share of states’ Medicaid costs. Instead, states would get a fixed dollar amount that would rise annually only with inflation and population growth.
- The block grant would cut federal Medicaid spending by $810 billion over the next ten years, from 2014-2023, according to Ryan’s budget plan. (It is conceivable that a small share of these cuts could come from the Children’s Health Insurance Program (CHIP), which the Ryan budget would merge into its new Medicaid block grant.) This would be an estimated cut to federal Medicaid and CHIP funding of about 21 percent over ten years compared to current law and doesn’t count the loss of the large amount of additional funding that states would receive to expand Medicaid, as well as of the funding provided under a two-year extension of CHIP, in health reform.
- Block grant funding amounts would fall further and further behind state needs each year. The annual increase in the block grant amounts would average about three percentage points less than Medicaid’s currently projected growth rate over the next ten years, which accounts for factors like rising health care costs and an aging population. Federal Medicaid and CHIP spending in 2023 would be $150 billion less — or 31 percent less — than what states would receive under current law, according to the Ryan budget (see graph). And the cuts would keep growing after 2023.
- The loss of federal funding would be even greater in years when enrollment or per-beneficiary health care costs rose faster than expected, such as during a recession or after the introduction of a new, breakthrough health care technology or treatment that improved patients’ health but increased cost. Currently, the federal government and the states share in those unanticipated costs; under the Ryan plan, states alone would pay them.
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