The Republicans’ War on Medicaid

This article originally appeared on this site.

What conservative Republicans such as Paul Ryan, the House Speaker, dislike about Medicaid isn’t just that it’s fiscally progressive. They also dislike that it’s working.What conservative Republicans such as Paul Ryan, the House Speaker, dislike about Medicaid isn’t just that it’s fiscally progressive. They also dislike that it’s working.CreditPHOTOGRAPH BY ALEX WONG / GETTY

Many people who don’t use Medicaid think of it as a federal health-care program for the impoverished and destitute, but it’s much more than that. In the past couple of decades, as incomes have stagnated and health-care costs have accelerated, Medicaid has turned into an essential support mechanism for millions of Americans who can’t be classed as poverty-stricken, strictly speaking, but who also can’t afford to bear the costs of private health coverage.

The numbers involved are huge. In March of this year, according to official figures, 74.6 million people were enrolled in plans supported by Medicaid or its sibling, the Children’s Health Insurance Program. That’s more than one in five of the U.S. population. Since 2013, the number of Medicaid and CHIP enrollees has risen by almost twenty million. That’s largely because the Affordable Care Act of 2010 significantly increased the programs’ income-eligibility thresholds.

The expansion under Obamacare focussed on working families with incomes just above the official poverty line. But many Medicaid beneficiaries are elderly and infirm individuals living in nursing homes. In fact, about sixty per cent of all nursing-home residents now receive some sort of assistance from Medicaid. Kids are also big beneficiaries: Medicaid and CHIP now help to provide medical coverage for about a third of all the children in America.

Some of the families who benefit from Medicaid might not even realize they are receiving federal aid. Take New York State’s Child Health Plus program, which provides medical insurance for the children of low- to middle-income families who don’t qualify for regular Medicaid. The program is partially funded by New York taxpayers, but it also receives matching funds from CHIP. Other states have similar programs.

Many Republican-run states have refused to accept Obamacare’s expansion of Medicaid, but some—including Arizona, Iowa, Ohio, and Pennsylvania—have agreed to participate. Although the details differ from place to place, the common thread is that Republican governors and legislatures in these states have seized the opportunity get more of their citizens health-care coverage.

At the national level, however, the Republican Party remains implacably opposed to Medicaid expansion. As the House Republicans’ health-care-reform bill, called the American Health Care Act, makes clear, the Party doesn’t merely want to roll back the Obamacare reforms; it wants to shrink the entire program, transferring it to the states and imposing tight caps on the payments they receive from the federal government.

That is the blueprint for Medicaid laid out in the latest version of the A.H.C.A., which Paul Ryan, the House Speaker, and his colleagues voted through, earlier this month. According to the nonpartisan Congressional Budget Office’s scoring of the A.H.C.A., which it released on Wednesday, the bill would reduce over-all federal spending on health care by about $1.1 trillion over ten years. Of that, eight hundred and thirty-four billion dollars—fully three-quarters of the savings—would come from cuts to Medicaid.

The political battle over the A.H.C.A., and much of the media coverage, has focussed on the individual-insurance market—and the bill would have alarming consequences there, such as forcing much higher premiums on people with preëxisting conditions and old people of modest means. But, in terms of over-all money spent and numbers of people affected, the bigger story lies elsewhere. From a financial and human perspective, the Republican bill is, above all else, an assault on Medicaid.

The C.B.O. estimates that by 2026, if the A.H.C.A. were enacted, spending on Medicaid would be reduced by a quarter compared to current spending. In the same time period, the number of people covered by Medicaid and CHIP would fall by about fourteen million—accounting for almost two-thirds of the total decrease of twenty-three million predicted by the C.B.O.

Why is the Republican Party so hostile toward Medicaid? It can’t simply be reflecting the wishes, and interests, of its voters, many of whom are now beneficiaries of the program. Donald Trump appeared to understand this when, from the beginning of his campaign, he promised not to cut Medicaid. (Of course, this pledge turned out to be worth about as much as a marketing flyer for Trump University.)

The two keys to the Republican attitude are money and ideology. If you view the modern G.O.P. as basically a mechanism to protect the wealthy, Medicaid is an obvious target for the Party. The program caters to low- and middle-income people, and its recent expansion was financed partly by an increase in taxes on the richest households in the country.

Under the Affordable Care Act, households with taxable incomes of more than a quarter of a million dollars a year were obliged to pay a 3.8-per-cent tax on their investment income—money from things like stock dividends and interest payments on bonds—and a 0.9-per-cent surtax on their other earnings. The A.H.C.A. would abolish these taxes, providing significant handouts to families in the top one per cent. From a fiscal perspective, the cuts to Medicaid pay for these handouts.

Some analysts would leave it there and say that you don’t need to get into the nature of conservative ideology; that ideology is merely a pretext for taking from the poor and giving to the rich. I have some sympathy for this view, but I don’t think it’s the whole story.

What conservative Republicans like Ryan dislike about Medicaid isn’t just that it’s fiscally progressive. They also dislike that it’s working. As medical costs have risen and the private sector has failed to cover an increasing number of Americans, the Medicaid and CHIP programs have filled some of the coverage gap, and have done so relatively cheaply. (Studies show that covering people with private insurance plans costs somewhere between a quarter and a third more than Medicaid.)

For any politician who loathes government interventions in the economy, and whose real goal is to head off socialized medicine, the expansion of Medicaid represents a serious threat. Here is an embryonic single-payer system that is growing fast and could be further expanded pretty easily. That means it has to be crippled now, before it gets more firmly established. Hence, the A.H.C.A.

Of course, the A.H.C.A. isn’t yet law. The measure now goes to the Republican-controlled Senate, where attention will again focus on premiums and coverage in the individual market. These are important issues, to be sure. But also keep a keen eye on what happens to the Medicaid provisions of the bill. If you want to know where today’s G.O.P. ultimately stands, that will be the biggest tell.

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