What Do $880 Billion in Medicaid Cuts Look Like?
The updated House Republican budget proposal, released Sunday, doubles down on major cuts to the Medicaid program. All in all, the plan includes cuts of $912 billion in federal spending over the course of the next ten years. The House Energy and Commerce Committee had to find at least $880 billion in savings on the occasion, taking its pick from funding that is 95 percent earmarked for Medicaid. The cuts will be instrumental in paying for the extention of 2017 Trump tax breaks that are set to expire this year and which would benefit those earning more than $400,000 annually.
An analysis by KFF shows that $880 billion lost in Medicaid spending (or $88 billion annually) represents a cut of 16 percent to federal funding of the program. As states also contribute a smaller amount of money to Medicaid, the loss in funding would be the equivalent of 29 percent of this state funding. If states wanted to substitute missing funds through their tax revenue, the gap is equal to 6 percent of state tax income.
$88 billion lost annually is enough to pay for more than three quarters of Medicare coverage for all children in the program, 38 percent of coverage of all Medicaid adults or 18 percent of all senior and disabled enrolees' coverage.
While the KFF calculation assumes that all $880 billion in House Energy and Commerce Committee cuts would come from Medicaid, The New York Times reports it would be actually closer to $715 billion as other cuts could come from eliminating automobile regulations. While the proposal stops short of simply not paying states Medicaid contributions anymore, it adds additional rules, requirements and verifications that could cause many recipients to lose their coverage or make it more expensive for them. These include co-pays for all but the poorest recipients and work requirements for able-bodied, childless adults. The Congressional Budget Office estimates that 8.6 million Americans would lose Medicaid coverage until 2034, in addition to 5.1 million who would also do so due to under separate health care legislation that is currently proposed or left to expire.