The Kaiser Foundation has analyzed the GOP Medicare plan. 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 House Budget Plan includes two major provisions relevant to Medicaid. First, it would repeal the Affordable Care Act (ACA), which includes a major expansion of Medicaid with mostly federal funding to nearly all non-elderly individuals, including adults without dependent children, up to 138 percent of poverty.
Second, the House Budget Plan would convert existing Medicaid financing from open-ended, matched federal spending for eligible individuals to a block grant under which federal spending is capped annually by state and is distributed based on a formula rather than actual costs. In exchange for capped federal spending, the proposal would give states additional flexibility to design their Medicaid programs although any federal requirements are not defined.
The block grant would start in 2013 and grow annually with population growth and with inflation (CPI-U). Since these growth levels are below the expected growth in Medicaid spending, the federal government would realize significant savings.
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.
Florida would see a 43.7 percent reduction in Medicaid funding –the second highest reduction behind Wyoming’s 44.4 percent. The state’s enrollment would be cut by 55.1 percent, trailing only Oregon (56.1 percent) and South Dakota (55.4 percent).
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. For our area, this means Sacred Heart, which took a $9 million hit in the 2011 state legislative session, would be hit the hardest.
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.
The estimated reduction for Florida hospitals is 46 percent – $5.492 billion by 2021.
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Who is the Kaiser Foundation? A non-profit, private operating foundation that focuses on the major health care issues facing the U.S., as well as the U.S. role in global health policy.
Board of Trustees:
Drew Altman, Ph.D.
President and Chief Executive Officer
Susan V. Berresford
Former President, Ford Foundation
Consultant, New York Community Trust
James E. Doyle, J.D.
Of Counsel, Foley & Lardner, LLP
Former Governor of Wisconsin
William H. Frist, M.D.
University Distinguished Professor of Medicine and Business, Vanderbilt University
Former United States Senate Majority Leader
Charles Gibson
Former Anchor of World News with Charles Gibson on ABC News
Kathryn B. Kaiser
Founder, CoachingWIT
Kaiser Family Member
Cokie Roberts
Political Commentator, ABC News
Senior News Analyst, NPR
Gerald Rosberg, J.D.
Senior Vice President, The Washington Post
David Satcher, M.D.
Director, Center of Excellence on Health Disparities
Poussaint-Satcher-Cosby Chair in Mental Health
Morehouse School of Medicine
Richard Schlosberg (Chair)
Former President, David and Lucille Packard Foundation
Former Publisher and CEO, Los Angeles Times
Diana Chapman Walsh, M.S., Ph.D.
Former President, Wellesley College
Kathy Wehle
Financial Consultant
Kaiser Family Member
W. Richard West, Jr., J.D.
Founding Director
Smithsonian’s National Museum of the American Indian