WASHINGTON ― House Speaker Paul Ryan sees repealing Obamacare as a historic opportunity to reduce the welfare rolls.
In an interview with conservative radio host Hugh Hewitt on Friday, Ryan (R-Wis.) compared his legislation repealing the Affordable Care Act to the vaunted 1996 welfare reform law, which basically ended the federal government’s commitment to cash assistance for parents in poverty.
“This is so much bigger, by orders of magnitude, than welfare reform,” Ryan said.
Obama’s Affordable Care Act made more people eligible for Medicaid, which currently provides health insurance for nearly 70 million Americans. The Republican health care bill would roll back Obamacare’s Medicaid expansion and also dramatically reform the way Medicaid works.
States currently administer Medicaid with a commitment from the federal government, amounting to hundreds of billions of dollars per year, to help pay for as many enrollees as might be eligible due to low income. The Republicans’ American Health Care Act would limit that open-ended commitment by capping federal funding for states based on the number of enrollees rather than the cost of their medical claims.
As Ryan put it on Friday, “We are de-federalizing an entitlement, block granting it back to the states, and capping its growth rate. That’s never been done before.”
Indeed, the legislation’s per capita funding caps have never been tried in a public benefit program, according to the Center for Law and Social Policy, a liberal think tank that generally opposes cutting antipoverty funds. Conservative policy wonks have argued that Medicaid’s funding formula doesn’t improve poor people’s health in part because of low compensation rates for doctors.
But Congress has done “block granting” before, just not on such a large scale. In 1996, amid a national debate over welfare fraud and the alleged pathologies of poor people, Congress overhauled the federal Aid to Families with Dependent Children program, which since the 1930s had offered monthly cash benefits to single mothers and families in poverty. Congress renamed the program the Temporary Assistance for Needy Families and capped its funding as a $16 billion “block grant” to states. Ryan was a congressional staffer at the time.
“Welfare reform is a $16 billion program,” Ryan said Friday. “We’re talking about trillions in the end here in this program.”
Key features of welfare reform included time limits on benefits and a requirement that recipients engage in “work activities” to remain enrolled. The real value of the program’s $16 billion block grant has eroded with inflation, and enrollment in the program, in absolute numbers and as a percentage of eligible families, has fallen significantly. The Center on Budget and Policy Priorities estimates that as of 2014, only 23 percent of families in poverty received TANF benefits, down from 68 percent in 1997.
As the number of people on welfare has declined, conservatives have touted the reduction in childhood poverty and increases in workforce participation among women, though it’s hard to disentangle the law’s effects from broader economic forces.
A key difference between welfare reform and the new Republican proposal for Medicaid is that the latter’s per capita funding caps would be indexed to inflation and most of the reforms wouldn’t phase in for another several years. Nevertheless, early estimates suggest the overall policy would have similar results: fewer people getting help from the program.
Following reports last month that congressional Republicans were considering block grants for Medicaid ― Ryan has long advocated block granting social programs ― the Center for Law and Social Policy produced an analysis portraying TANF as a cautionary tale. The report said the program’s policies vary widely across states and that, in general, it responded poorly to increased poverty as a result of the Great Recession. In some states enrollment even declined as unemployment skyrocketed.
Elizabeth Lower-Basch, a senior policy analyst with the center, said at least Medicaid’s funding caps would be indexed to inflation under the Republican proposal, which she considers disastrous.
“It’s an improvement over the TANF block grant,” she said. “Almost anything would be.”