How the Republicans plan to ruin Medicaid

Hannah Katch, Center for Budget & Policy Priorities - By converting Medicaid to a per capita cap or block grant, the House-passed Republican bill to repeal the Affordable Care Act threatens coverage for all Medicaid beneficiaries. Here’s why:

Under the House bill, the federal government starting in 2020 would no longer pay a fixed percentage of states’ overall Medicaid costs, as it does now. Instead, it would pay only a fixed amount per beneficiary, with the amount set to grow at a slower rate than the projected growth in Medicaid costs. States would therefore see less federal Medicaid funding than under current law, with the cuts growing each year.

The per capita cap establishes separate funding caps for seniors, people with disabilities, children, other adults, and adult expansion enrollees, and states receive an overall amount of funding that’s the sum of each population’s per capita cap multiplied by actual Medicaid enrollment in each such population group. That means that even if the cap amount for one group was adequate, a state would still face a substantial overall federal funding shortfall if the cap amounts for other groups were increasingly inadequate. And, to compensate for a substantial overall federal funding shortfall, a state would have to cut Medicaid across its entire program — regardless of how much each population’s per capita cap contributed to the total funding cut in that year.

... In essence, no one with Medicaid coverage can or will be protected from the large and growing Medicaid cuts that states will have to make due to federal funding shortfalls under the overall per capita cap. Nor can any benefit that Medicaid provides be protected.