After the Defeat of ACA Repeal Efforts, Medicaid is Still Under Threat
Federal funding for Medicaid remains under threat from proposals to drastically restructure it, even though most Americans oppose significant funding cuts to Medicaid. The program provides health care coverage to low income families, individuals with disabilities, veterans and seniors, who otherwise would not be able to afford it. Medicaid is also an important component to addressing the opioid epidemic. In Maryland, 1.3 million residents receive health care coverage through Medicaid, including nearly 290,000 who are able to receive coverage as a result of the expansion under the Affordable Care Act.
Proposals to restructure Medicaid grants to states using block grants or per capita caps are designed to drastically reduce federal investment in Medicaid over time. As a result, Maryland would have to increase state funding to make up the difference, by raising taxes or cutting other programs, or make reductions to program eligibility or benefits.
A Medicaid block grant would provide Maryland with a lump sum of federal funds regardless of how many people qualify for health coverage at a given time, making it much more difficult to respond to sudden changes in enrollment due to events such as an economic downturn.
A per capita cap would put a limit on federal funding per beneficiary, leaving Maryland responsible for unexpected increases in the cost per beneficiary due to the emergence of new diseases, disease outbreaks, or costly new medical technologies. Although the cap could be indexed to inflation, health care costs typically rise much faster than inflation, again leaving Maryland responsible for making up the gap in funding.
Although proposals to cut Medicaid while repealing the Affordable Care Act recently failed in Congress, there are still significant threats to the program. One version of the ACA repeal and replacement legislation that is still under consideration in the Senate would change federal funding for health care subsidies and Medicaid expansion to a single block grant that states could use as they please. This would be particularly damaging to Maryland and other states that opted to expand Medicaid. The proposal also includes a provision to establish a per capita cap on the rest of Medicaid.
Budget proposals for fiscal year 2018 from both the Trump Administration and the House of Representatives include massive cuts to Medicaid and efforts to change the structure of the program. The Trump budget proposes to cut Medicaid funding by an average of 12 percent over the next ten years, while the House budget resolution seeks to change funding for the program to a block grant and add a work requirement for able-bodied recipients.
Recent victories to preserve the ACA and Medicaid don’t mean that the fight is over. Maryland’s congressional delegation should continue to oppose all efforts to defund or make other critical changes to Medicaid.
