The GOP's House-approved fiscal year 2012 budget resolution (H Con Res 34) would cause between 31 million and 44 million people to lose Medicaid coverage, according to a recent report by the Kaiser Family Foundation and the Urban Institute, the AP/Washington Post reports (AP/Washington Post, 5/10).
Background on GOP Budget Plan
The budget blueprint -- offered by House Budget Committee Chair Paul Ryan (R-Wis.) -- would give states fixed annual block grants of $11,000 per Medicaid beneficiary to use as they choose (California Healthline, 5/6). It also would transform Medicare into a voucher program, defund the federal health reform law and lower federal spending by $6 trillion over a decade (California Healthline, 5/10).
According to the study, the budget plan would leave Medicaid "significantly compromised … with no obvious alternative to take its place." It found that the worst-case scenario would be Medicaid enrollment declining by nearly 60% from current projected levels.
The findings show that federal spending for the program would decline by $1.4 trillion from 2012 to 2021 under the GOP plan, with southern and mountain states facing the steepest cuts (AP/Washington Post, 5/10). The report projected spending reductions over the next 10 years ranging from 26% in Washington, Vermont and Minnesota to 41% in Georgia and Colorado. It also estimated a 44% spending decrease in Florida over the next decade (Bunis, CQ HealthBeat, 5/10).
The study also found that hospitals, community health centers and other health care providers serving low-income residents would be disproportionately affected (AP/Washington Post, 5/10). According to the study, Medicaid payments to hospitals would decrease by as much as 38% in 2021 (CQ HealthBeat, 5/10). The drop would equal $84 billion in lost funds that year.
The report said that the hospital reductions "are of such magnitude that they have quite serious implications," adding that "higher levels of uncompensated care facing hospitals would inevitably lead to increased spending by state and local governments."
Conor Sweeney, a spokesperson for Ryan, criticized the study's projections. He said the GOP plan would encourage Medicaid growth "at a sustainable rate, so that the health care safety net will be there for those [who] need it most" (AP/Washington Post, 5/10).
GOP Senators Release Separate Budget Proposal
On Tuesday, Republican Sens. Marco Rubio (Fla.), Pat Toomey (Pa.), Jim DeMint (S.C.) and Ron Johnson (Wis.) released a budget plan that competes with the House GOP plan and a Senate Democratic plan currently under development (Roll Call, 5/9).
The proposal would balance the budget in nine years and reduce government spending to 18.5% of the U.S. gross domestic product without making significant cuts to Medicare, which have drawn criticisms from Democrats and U.S. residents. The plan actually budgets more for Medicare than either Ryan's proposal or a budget initiative by President Obama. However, the plan still would repeal the federal health reform law, while retaining the overhaul's Medicare cuts. In addition, the plan would turn Medicaid into a block-grant system, similar to Ryan's proposal.
Toomey said the plan is "a necessary first step" but a successful long-term budget fix will require "broader reforms than we have in this budget" (Schroeder, "On the Money," The Hill, 5/10).
Democrats Oppose Spending Cap
The White House and Senate Democratic leaders are opposing a bill (S 245) that would cap federal spending at 20.6% of the gross domestic product, the Wall Street Journal reports.
Sen. Bob Corker (R-Tenn.) is the lead sponsor of the legislation, but two Democratic senators -- Claire McCaskill (Mo.) and Joe Manchin (W.Va.) -- have co-sponsored it. Defenders of the plan say it is the only way to force Congress to make lasting fiscal decisions.
However, many Democrats say the cap is so low that it would force reductions in Medicare and other programs. Senate Majority Leader Harry Reid (D-Nev.) said, "We shouldn't be drawing lines in the sand. The fair way to do that is to cut spending … and also make the tax code a little more fair" (Hook/Lee, Wall Street Journal, 5/11).