A Republican proposal to repeal the Affordable Care Act and transform Medicaid into a block grant system would reduce federal spending by $1.7 trillion between 2013 and 2022, according to an analysis released Tuesday by the Kaiser Family Foundation, Kaiser Health News' "Capsules" reports.
About the Plan
The plan to repeal the ACA and alter Medicaid is included in Republican vice presidential nominee and House Budget Committee Chair Paul Ryan's (R-Wis.) House-approved fiscal year 2013 budget proposal.
Ryan's running mate, GOP presidential nominee Mitt Romney, has backed a similar proposal, which his campaign estimates would reduce federal spending by $100 billion annually beginning in 2013 (Galewitz, "Capsules," Kaiser Health News, 10/23).
The analysis -- which was conducted by the Urban Institute for KFF -- used a model that would grow 1% faster than inflation, which is the same target set by Ryan's budget proposal (Kliff, "Wonkblog," Washington Post, 10/23).
The report found that $932 billion of the $1.7 trillion funding reduction would come from repealing the ACA's Medicaid expansion and $810 billion would come from converting Medicaid into a block grant program. The $1.7 trillion decrease in spending represents a 38% reduction compared with current projected spending, according to CQ HealthBeat. The report also notes that the spending reductions related to the block grant proposal would grow over time.
According to the analysis, the plan would result in 31 million to 38 million fewer U.S. residents with Medicaid coverage in 2022. Of those individuals, 17 million would no longer be eligible for Medicaid coverage because of the ACA repeal, while 14 million to 21 million individuals would be ineligible because of changes to the program due to block grants, according to the report (CQ HealthBeat, 10/23).
The report also estimates that hospitals and nursing homes would face a 22% reduction in Medicaid funding under current baselines, totaling $584 billion over the next 10 years ("Wonkblog," Washington Post, 10/23).
Romney's proposal is different from the House budget plan analyzed in the report, "Wonkblog" reports.
According to Oren Cass, Romney's domestic policy director, Romney's Medicaid plan differs from the one modeled in the report because it allows states to experiment with the program. "It's a restructuring of the program that gives states the possibility to pursue different models," Cass said, adding, "[Romney] believes if the program is structured properly, spending can go an awful lot further."
Romney's economic advisers have said that giving states more control of the program will allow local officials to eliminate inefficiencies in the program and experiment with new ways to deliver better quality care at lower costs.
According to "Wonkblog," the report also analyzes a plan that is more similar to Romney's, in which states limit per-person spending growth to the same rate as the rest of the economy -- a rate significantly lower than the program's historical growth.
According to the report, the plan similar to Romney’s would result in 14.3 million fewer U.S. residents in Medicaid, along with the 17 million who would not gain coverage under the Medicaid expansion ("Wonkblog," Washington Post, 10/23).