“Block granting” Medicaid will have severe consequences

October 23, 2012

There has been a lot of talk during this election season about the merits of “block granting” the Medicaid program. According to the Kaiser Family Foundation, the House Budget Plan that would repeal the Affordable Care Act (ACA) and convert Medicaid to a block grant would trigger significant decreases in federal Medicaid spending and could result in substantial reductions in enrollment and payments to providers compared to current projections. Kaiser has produced an an updated analysis conducted by the Urban Institute for the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured that CMHNetwork faithful should read. The analysis indicates that “cuts of this magnitude in federal spending for Medicaid would likely lead to increases in the number of Americans without health insurance and strain the safety net, even with additional flexibility for states to administer their programs.” 

Here are some stats from the report that should grab your attention:

  • It finds that projected federal spending on Medicaid for the period 2013 to 2022 would fall by $1.7 trillion compared to current estimates, a 38 percent decline.
  • Of that total, $932 billion in spending reductions would come from the repeal of the federal support for the ACA Medicaid expansion and another $810 billion would be due to federal Medicaid spending reductions that accompany the block grant.
  • Under the plan, Medicaid payments to hospitals could fall by as much as $363.8 billion and payments to nursing homes by $220.2 billion over the 2013 to 2022 period, a 22% reduction, assuming that states apply the same percentage reduction across all provider groups. The combination of the ACA repeal and the block grant could leave 31 million to 38 million fewer people with Medicaid coverage in 2022.
  • Download the analysis here and visit the Kaiser website for a detailed chart book that provides an illustrative overview of some of the key factors that contribute to the substantial variation in Medicaid spending across states today.

The more you know the clearer will be your vote on November 6th.

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