Americans Don't Support Ryan's Vision to Slash and Ration Medicaid

It is disturbing when politicians talk about Medicaid like it's some sort of handout. Medicaid serves as an insurance program that is there because someday you may need it -- either for your child, your parents, or yourself.
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Republican Vice Presidential candidate, Rep. Paul Ryan, R-Wis. talks to supporters during a campaign rally in Lakewood, Colo., Tuesday, Aug. 14, 2012. (AP Photo/Jack Dempsey)
Republican Vice Presidential candidate, Rep. Paul Ryan, R-Wis. talks to supporters during a campaign rally in Lakewood, Colo., Tuesday, Aug. 14, 2012. (AP Photo/Jack Dempsey)

As Americans, we support Medicaid for a number of reasons. Half of us have a very personal reason to support it, having received coverage for our kids during tough times, received or had someone we care about get long-term care for a disability, or seen Medicaid provide nursing home support for our ailing parents or grandparents. And many of us understand that we or our loved ones will someday need that kind of care.

For others, it is an issue of morality. Most Americans don't believe you just put children with cancer, senior citizens in need of nursing home care, or people with disabilities at risk to not receive the health care they need to thrive and survive. They also don't believe people who've worked hard their whole lives and paid into the system shouldn't suddenly have to choose between food on the table and health care because some CEO outsourced their job or some Wall Street banker gambled it away.

As a result, by a wide 70-27 percent margin, Americans oppose making significant cuts to Medicaid health care coverage to millions of our nation's children, seniors, and people with disabilities. Unfortunately, that is exactly what has been proposed by House Budget Committee Chairman and current vice presidential candidate Paul Ryan.

In Chairman Ryan's FY 2012 budget proposal that passed the House of Representatives but was defeated in the United States Senate, he pushed to both block grant and slash $771 billion out of the current Medicaid program and cut another $627 billion out of Medicaid as part of his effort to repeal the Affordable Care Act for a total of $1.4 trillion in federal Medicaid cuts.

While some might be persuaded this is necessary to reduce the deficit, the fact is that the Ryan budget simultaneously proposed a $1.8 trillion reduction in revenue through additional tax cuts to corporations and the wealthiest Americans. Instead of targeting Medicaid cuts to deficit reduction, the Ryan budget applies these enormous Medicaid cuts to pay for tax breaks for the wealthy.

What is the effect of these cuts? According to a Congressional Budget Office (CBO) analysis of the Ryan budget, it is estimated that "federal spending for Medicaid would be 35 percent lower in 2022 and 49 percent lower in 2030 than currently projected federal spending" through the imposition of a block grant.

Incredibly, Chairman Ryan argued that cutting hundreds of billions of dollars out of Medicaid and giving states flexibility via a block grant would somehow lead to an improved program. According to the budget proposal's narrative, it is argued that Medicaid needs reform because the program currently provides "below-market reimbursement rates" to doctors that leave "beneficiaries with fewer provider choices and reduced access to care." However, Ryan's proposed solution to this underfunding is to cut an additional $771 billion in federal funding from Medicaid and also eliminate the added funding in the Affordable Care Act devoted to actually improving physician payments in Medicaid.

It is inconceivable and, quite frankly, irrational to think that states would be able to address any problems associated with low provider payment rates by cutting hundreds of billions of dollars in funding to states, including funding specifically dedicated to raising Medicaid physician payments to the same rate as Medicare. Clearly, the opposite would occur.

As Dr. Aaron E. Carroll has said, "... don't be fooled into thinking that if we somehow took less money and handed it over to states in the form of 'block grants' that they could somehow magically cover the same number of people and increase reimbursement to physicians."

In fact, just to maintain current services, CBO explains that this level of cuts would leave states with three rather awful choices to make up for the enormous 35 percent cut in Medicaid funding by 2022. They could either cut funding to other programs such as education and public safety, impose massive health care cuts, or raise taxes.

As CBO found, "... the magnitude of the reduction in spending relative to such spending in the other scenarios means that states would need to increase their spending on these programs, make considerable cutbacks in them, or both. Cutbacks might involve reduced eligibility for Medicaid and CHIP, coverage of fewer services, lower payments to providers, or increased cost-sharing by beneficiaries -- all of which would reduce access to care."

This, of course, has ramifications that would ripple throughout the health care system. As CBO said:

Given that payment rates for providers under Medicaid are already generally lower than they are under Medicare and private insurance, if states lowered payment rates even further, providers might be less willing to treat Medicaid enrollees. As a result, Medicaid enrollees could face more limited access to care. If states reduced benefits or eligibility levels, beneficiaries could face higher out-of-pocket costs, and providers could face more uncompensated care as beneficiaries lost coverage for certain benefits or lost coverage altogether.

In Ryan's own words, such an outcome results in cost-shifting to non-Medicaid patients and employers and would send shock waves throughout the health care system. As his own narrative reads, "The cost shifting that occurs from government rationing remains a significant contributor to health inflation, which in turn puts quality, affordable health coverage out-of-reach for an increased number of Americans."

Ironically, while complaining about government rationing of health coverage, his proposal would fuel that fire. After all, a Medicaid block grant accompanied by $771 billion in cuts is, by definition, an arbitrary rationing of funding and health coverage and would dramatically worsen the very problems he identifies.

All Americans -- rich and poor, young and old, white, brown, and black -- deserve the opportunity to live a happy, healthy life, and Medicaid catches people who would otherwise fall through the cracks of our health care system, whether they're children, seniors, or people with disabilities. Medicaid works, has a 86 percent satisfaction rate, improves health, and saves lives (see also here, here, here, and here) by providing people with coverage for the health services they need.

It is disturbing when politicians talk about Medicaid like it's some sort of handout, particularly when they have their own form of government-financed health coverage. Medicaid serves as an insurance program that is there because someday you may need it -- either for your child, your parents, or yourself. Americans have been paying those premiums for years, and now that millions are out of work or growing older, politicians want to change the terms of the contract, tear up their claims, and replace it with block grants in the case of Medicaid (or vouchers in the case of Medicare).

You don't cut funding to firefighters when brush fires are burning up millions of acres of land. You don't cut education when a near record number of children are living in poverty. And you don't cut health insurance programs that cover a third of America's children, the disabled, and millions of America's low-income seniors when the economy is in its worst shape in decades in order to pay for tax cuts to the wealthiest among us.

While it is certainly important to make sure Medicaid is financially sound, there is a better way to do it than to ration funding and health care coverage. The answer is to put Americans back to work, so more people are paying into the system again and fewer people are left without health coverage, and to let millionaires and big businesses pay their fair share of taxes.

The measure of a great nation isn't how well it treats those at the top but how it treats those whose fortunes are down. With record unemployment and a shrinking middle class, we should be catching people when they fall, not cutting holes in our safety net.

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