off the charts
BEYOND THE NUMBERS
BEYOND THE NUMBERS
Ryan Budget Again Proposes a Medicaid Block Grant, Adding 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 it would cut federal Medicaid funding steeply, by $732 billion over the next decade. It would also repeal health reform’s Medicaid expansion. The combined total cut to Medicaid would exceed more than $1.5 trillion over ten years, relative to current law. 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 13 million people would lose their new coverage or no longer gain coverage in the future; 13 million is the Congressional Budget Office’s (CBO) current estimate of the number of people who would eventually gain coverage under the Medicaid expansion, though the number could rise as high as 17 million if all states adopt the expansion. In addition, the large and growing cut in federal Medicaid funding 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. (More than 40 million people would likely become uninsured as a result of the Ryan budget overall after also taking into account the repeal of health reform’s exchange subsidies.) Under the Ryan plan, the federal government would no longer pay a fixed share of states’ Medicaid costs starting in 2016. Instead, states would get a fixed dollar amount that would rise annually only with inflation and population growth.
- The block grant funding would fall further and further behind state needs each year. The annual increase in the block grant would average about 3.5 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 the aging of the population. Federal Medicaid and Children’s Health Insurance Program (CHIP) spending in 2024 would be $124 billion less — or 26 percent less — than what states would receive under current law, according to the Ryan budget (see chart). And the cuts would keep growing after that.
- Altogether, the block grant would cut federal Medicaid spending by $732 billion from 2015-2024, according to the Ryan budget plan. (It is conceivable that a small share of these cuts could come from 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 more than 19 percent over the ten years as a whole, compared to current law — and doesn’t count the loss of the large additional funding that states would receive to expand Medicaid under health reform.
- 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 bear them.
Receive the latest news and reports from the Center