New Trump Rules Are a Sneak Attack on Medicaid

New Trump Rules Are a Sneak Attack on Medicaid

There are the things politicians say, and then there are things they do. When Donald Trump was running for office, he promised there would be no cuts to Medicaid. As president, he promised “health care for everyone.” His aides promised “no one will lose coverage” and “no one will be worse off.” These promises sounded great and reassured voters. 

But then last week, the administration quietly released a new policy that is the equivalent of a ticking time bomb⁠—a health care IED that looks harmless but has the potential to cause tremendous financial damage to state Medicaid programs and take health care away from people who can least afford it.

The new policy caps what the federal government will pay for health care under Medicaid. Currently, the federal government pays for at least half of the cost of all of the health care needed by everyone eligible for the coverage. Under the new policy, there will be a ceiling on federal funding for those people who qualified for Medicaid under the Affordable Care Act (ACA). That lump sum payment may not be enough, if for example, the cost of medical care rises faster than expected. Since the goal of the policy is to save money, it is expected that states will reduce the level of coverage or limit eligibility if they bump up against the ceiling of federal funding.  

According to Kaiser Family Foundation, some 12 million additional people in 35 states have used the ACA to get coverage through the Medicaid program. Many of these are workers who were not eligible for traditional Medicaid.

We often do not appreciate how access to Medicaid has improved the health of working families. According to the Center for American Progress, Medicaid expansion under the ACA has reduced mortality rates by 6% in the newly eligible beneficiary population and reduced racial disparities in cancer treatment. Medicaid expansion has also reduced the rate of hospital closures, lowered uncompensated costs, raised wages in the health care field and increased state revenue. States that expanded Medicaid saw an average 13% decline in residents with medical debt⁠—further evidence of how the Medicaid benefit improves the living standard of working families that would otherwise face major medical bills. 

A block grant would allow states to reduce benefits for this group of people that are new to Medicaid and cut funding for a range of “optional” services like dental care and prescription drug coverage traditionally offered under the program. Medicaid cuts would hurt immigrant enrollees, but it would also harm their U.S. citizen children. As FamiliesUSA notes, when parents have a hard time accessing Medicaid, their children are likely to lose access to care as well. 

The guidance issued by the administration ignores the historical lessons of the past: We need a flexible health care program that helps individuals and communities respond to recessions, epidemics or natural disasters. Would Houston or Iowa be better off with reduced Medicaid spending after the devastated floods in their community? Would California be better off after an awful series of wildfires destroyed whole communities? Would the country be better able to handle the thousands of people who may need emergency care in a medical pandemic with capped funding? 

Replacing the open-ended federal commitment to state Medicaid programs with block grants is a gamble for governors, and the odds are this bet will end up devastating state budgets and forcing harmful cuts in coverage and benefits.

Maybe that is why the administration’s new Medicaid policy was rolled out as if the president has something to hide. Department of Health and Human Services officials have purposely issued the policy through an administrative process that doesn’t allow for public comment. Taking this quiet approach makes sense, though, since this is the same policy that was rejected three times by Congress in 2017 and was unpopular at the polls in 2018. We can only hope that voters will take the same notice of it in 2020 and let their state officials know that this is not a good option for their communities.

Kenneth Quinnell
Fri, 02/07/2020 – 14:52

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Updated: March 3, 2020 — 5:15 pm