How the GOP plans to slash Medicaid without you noticing

Robert Reich - Bad enough that the Republican Senate bill would repeal much of the Affordable Care Act.

Even worse, it unravels the Medicaid Act of 1965 – which, even before Obamacare, provided health insurance to millions of poor households and elderly.

It’s done with a sleight-of-hand intended to elude not only the public but also the Congressional Budget Office.

Here’s how the Senate Republican bill does it. The bill sets a per-person cap on Medicaid spending in each state. That cap looks innocent enough because it rises every year with inflation.

But there’s a catch. Starting 8 years from now, in 2025, the Senate bill switches its measure of inflation – from how rapidly medical costs are rising, to how rapidly overall costs in the economy are rising.

Yet medical costs are rising faster than overall costs. They’ll almost surely continue to do so – as America’s elderly population grows, and as new medical devices, technologies, and drugs prolong life.

Which means that after 2025, Medicaid will cover less and less of the costs of health care for the poor and elderly.

Over time, that gap becomes huge. The nonpartisan Urban Institute estimates that just between 2025 and 2035, about $467 billion less will be spent on Medicaid than would be spent than if Medicaid funding were to keep up with the expected rise in medical costs.

So millions of Americans will lose the Medicaid coverage they would have received under the 1965 Medicaid act. Over the long term, Medicaid will unravel.