Budget-cutting can be a bloody business, depending upon where and how deeply one cuts. It can be a deadly business too. Not for the budget-cutters, though. That’s especially true for Medicaid. To understand that, you need look no further than Arizona.
It was just earlier this year that Arizona was grabbed the spotlight as an example of just how deep GOP lawmakers were willing to cut. Rania Khalek recounts Arizona’s recent history in an Alternet post that reads like a budget cutters’ body count.
Meanwhile, Arizona was busy denying life-saving treatment to tens of thousands of low-income residents. After being the only state in the entire country to eliminate the Children’s Health Insurance Program (CHIP), effectively denying health care to 47,000 low-income children, Arizona Governor Jan Brewer signed a bill to end financing for certain organ transplants covered under Medicaid. The decision amounted to a death sentence for some low-income patients, who had little chance of survival without transplants and lacked the hundreds of thousands of dollars needed to pay for them. Two patients taken off the organ transplant waiting list died as a result of the shameful measure, leading many to accuse Governor Brewer of implementing death panels through budget cuts.
Governor Jan Brewer — famous for declaring government a “necessary evil” and Arizona “headless body farm” due to illegal immigration — defended the cuts, claiming “We have no choice,” all while signing into law tax breaks that would cost the state $538 million in the next seven years, and ignoring other possible solutions.
ARIZONA: Last October, as she ignored 26 other possible funding solutions, Gov. Jan Brewer (R) implemented painful cuts to the state’s Medicaid program, which resulted in 2 deaths and left 98 Arizonians waiting for transplant funding. After months of protests, Brewer finally agreed to set aside $151 million in an “uncompensated-care pool to pay health-care providers for ‘life-saving’ procedures, including transplants.” However, House Republicans refused to restore funding for organ transplants because, as House Appropriations Committee chair Jon Kavanagh (R) said, “not enough lives would be saved to warrant restoring millions in budget cuts.” Then, while peoples’ lives were in danger, Brewer eagerly signed tax cuts for businesses that will cost the state $538 million.
Pleas from transplant hopefuls and survivors wasn’t enough to get funding restored. Arizona did eventually restore transplant funding, but not before efforts to recall Brewer started up, and only after Brewer counted with a proposal to restore funding for the 98-person transplant program, if the state could kick an additional 280,000 out of its Medicaid program.
In the next few years, Arizona may be looked upon as the first shot in a battle that promises to rage across the country between now and November 2012. The Republican budget isn’t likely to get the vote to pass Congress. But, as its author said, “This isn’t a budget. This is a cause.” It may be a lost cause in Congress, for now. (If Republicans make significant gains in 2012, and win the White House, all bets are off.) But, like another famous lost cause, it probably won’t die anytime soon. Instead, it will spark battles in state after state, leaving collateral damage in its wake.
An overview of the likely impact gives a 10,000 foot view of the collateral damage that’s likely to be the result of the kind of cuts Republicans want to inflict on Medicaid.
- Up to 44 million could lose health coverage. Federal spending on Medicaid would fall by $1.4 trillion, or 34% by 2021. States would receive $243 billion less per year. Cuts would produce decreases in Medicaid enrollment, resulting in 31 million to 44 million to lose coverage.
- By 2013, 400,000 would lose vital health care services by 2013, according to the CBO.
- By 2016, 1.7 million children will lose health insurance. If the Republican plan becomes law the CBO estimates that 1.7 million children will lose health insurance by 2016, as half the states could eliminate their CHIP programs, and remaining states could roll back coverage.
- As many as 15 million could be forced off Medicaid rolls, according to state-by-state analysis.
- Cuts would seriously impact seniors and people with disabilities. Some 14 million seniors and people with disabilities depend on Medicaid to pay for nursing home care and assisted living — which costs about $72,000 a year, on average. In fact, 70% of nursing home patients are Medicaid recipients. Deep cuts would mean less coverage for nursing home residents, shifting more of the cost on to the elderly and disabled beneficiaries and their families. Sharp reduction in the quality of nursing home care is another likely result. Many elderly and disabled recipients would be unable to obtain coverage elsewhere because of pre-existing conditions.
If it’s true that the GOP’s plan to gut Medicaid doesn’t have the votes to pass the Senate, then it won’t become law. Not federal law, anyway. Remember what Paul Ryan said, “This is isn’t a budget. This is a cause.” That cause may be defeated in D.C. (for now), but it promises to live on in several states, and may yet rise again on the federal level.
Even if it fails in Congress, the Republican plan to gut Medicaid is already serving as a model for Republican governors to do on the state level what may be blocked on the federal level. Medicaid, after all, differs from Medicare in that Medicare is a state governed program. While the federal government contributes significant funding, and regulates states’ management of Medicare, state governments have a lot of power over how their Medicaid program are administered. Thus, states are an important part of the GOP’s strategy on Medicaid.
Ultimately, Republicans want to give states more power to administer Medicaid. It’s usually couched in rhetoric about giving state’s more “flexibility” to manage Medicaid, and presented as a two-part strategy. First, Republicans want to repeal “maintenance of effort” provisions in the health car reform law, which prevent states from reducing Medicaid eligibility before 2014, when the Medicaid extension in health care reform kicks in. Second, turning Medicaid into a block grant program would basically allow states to use the federal money they receive for Medicaid as they see fit.
But that “flexibility” comes with far less funding. Remember that federal funding of Medicaid would fall by 34%, or $1.4 trillion, by 2014. By then states would receive $243 billion a year less by 2021. So much for “flexibility”.
“Under the House Budget Plan, the Medicaid block grant would reduce and cap federal Medicaid spending, substantially reducing states’ ability to provide coverage to low-income Americans,” said Diane Rowland, Executive Vice President of the Foundation and Executive Director of the Kaiser Commission on Medicaid and the Uninsured. “The repeal of the ACA combined with the adoption of the Medicaid block grant would add millions more to the number of uninsured Americans and compromise Medicaid’s role as the health safety net in the next recession.”
Only in the conservative mind does less funding mean more “flexibility” and more “freedom.” For most people, and institutions, having less money means having fewer options, and thus a lot less “flexibility.” But that’s what Republican governors are asking for. And some of them aren’t waiting for Congress. They’re putting parts of the Republican plan to gut Medicaid into action in their own states.
- Mississippi: Though nearly one in four Mississippi residents earned less than the federal poverty level — $10,830 a year — and 18% the state population lacks access to primary care, governor Haley Barbour has dismissed the idea that his state could benefit from more federal Medicaid funding. The state has one of the strictest income limits for Medicaid eligibility; an adult in a two-person family can’t earn more than 44% of the poverty level, about $6,472 annually, and qualify for Medicaid in Missippi. Barbour, who holds that some Medicaid recipients in his state drive BMWs, has advocated charging Medicaid recipients co-pays for pharmaceuticals, and has been a leader in the Republicans’ war on Medicaid.
- Florida: Governor Rick Scott signed a landmark Medicaid overhaul giving managed care companies unprecedented control over Florida’s Medicaid program, despite a five county pilot program that produced widespread complaints and little evidence of savings. One of the companies that stands to benefit, Solanic, was founded by Scott.
- New Jersey: Governor Chris Christie is taking a chainsaw to New Jersey’s Medicaid budget, in an attempt to cut $300 million by tightening eligibility requirements for recipients. In a move that would make Mississippi look generous by comparison, Christie’s proposal would deny coverage to new adult enrollees who earn more than $5,317 annually — about 1/5 of the current income requirement.
- Texas: Conservative legislators in Texas have demanded the state drop out of Medicaid — which pays for all childbirths in the state — to alleviate the state budget shortfall. (So much for the “Texas Miracle.”) This month, the legislature passed a measure that converts its existing Medicaid structure to a capped block grant that would increase only for population and the general inflation rate (not the medical inflation rate), and exempt the state from Medicaid’s benefit rules and all Medicare rules. In other words, a virtual copy of the Republican plan for Medicaid.
- Wisconsin: Governor Scott Walker has proposed a measure to grant the Wisconsin’s Department of Health services (DHS) sweeping authority to change the states Medicaid program. The measure would allow DHS to use “emergency powers” to restrict eligibility, raise premiums, and change reimbursements.
Some of these state measures may fail, but others will likely stand and ensure that the debate over Medicaid will continue between now and 2012. Those state that survive will be difficult to remove once implemented, and will have a devastating impact on those state residents who rely on Medicaid for vital services.
Deep Cuts Hit Home
Perhaps nothing illustrates more effectively what the Republicans’ cuts would mean for many of the 60 million Americans who benefit from Medicaid than the impact in Rep. Paul Ryan’s own district, taken from the House Democrats district-by-district breakdown of the Medicaid Cuts in the Republican budget.
In Ryan’s own district his budget would:
- Reduce coverage for 12,800 dual eligible seniors and individuals with disabilities who rely on Medicaid to supplement their Medicare coverage or pay their Medicare cost sharing.
- Jeopardize nursing home care for 1,900 whose expenses are paid by Medicaid.
- Impair the health care of 47,000 children, including 3,900 newborns each year, who receive coverage under Medicaid.
- Cut payments to hospitals for 32,000 emergency room visits paid for by Medicaid each year.
- Cut payments to hospitals for 10,700 inpatient visits paid for by Medicaid each year.
- Reduce jobs and hurt economic growth by eliminating $1.4 billion in Medicaid spending.
None of these numbers look like a death sentence. But when it comes to Medicaid, and beneficiaries who will likely have nowhere else to turn if their benefits are lost, it comes down to a choice between providing care and not providing care.
Of course this doesn’t mean that cutting Medicaid won’t save money. It very well might. Thanks to Paul Ryan some families who can currently afford to take their kids to see the doctor won’t be able to take their kids to see the doctor. That will reduce aggregate health care expenditures and increase aggregate “kids get sick and die” nationwide. Of course a lot of kids who get sick and don’t get treated won’t die. It’s not as if the death rate from illness and accidents was 100 percent in the era before modern health care. People just suffer and life goes on. And with the extra budgetary headroom created, rich people can pay lower taxes and buy more really expensive refrigerators.
The Republicans’ Medicaid cuts might not kill you, but then again they might. Either way, it’s a chance that the GOP is willing to take, and a price it’s willing to have countless Americans pay — all for $4.2 trillion in tax cuts.