Why Go After Medicaid?

The House’s American Healthcare Act (AHCA), the Senate’s Better Healthcare Reconciliation Act (BHRA), and the first budget proposed by the White House include deep cuts to Medicaid. Trump’s budget called for spending reductions in the form of block grants or a per-capita spending limit. By underfunding the program in this way, the proposed budget forces states to reduce eligibility, reduce benefits, or cut payments to healthcare providers (or some combination of all three).

The AHCA and the BHRA take this same approach, also limiting federal responsibility for Medicaid via block grants or per-capita caps. In addition, both bills would roll back the Medicaid expansion provided by the ACA (Obamacare). According to the CBO, Medicaid will end up with about 800 billion less in federal funds spent over 10 years if the senate portion passes.

That’s three attacks on Medicaid in the space of a few months. Republicans in the House, the Senate, and now the White House have been talking about repealing and replacing Obamacare for a long time, but I see no reason why that effort must include major cuts to Medicaid. Why not focus on a bill centered around undoing the regulations of the ACA but leaving the Medicaid expansion alone? Why not take that, or any, path that doesn’t include crippling a program that provides tangible help for our most vulnerable? There are countless ways for the authors of these bills to declare some sort of victory, so why is Medicaid such a target?

The reason is that Medicaid shows a path towards a reasonable healthcare system for the United States. On June 20th, the Nevada state Legislature passed a measure that would have created a way for anyone in the state to buy into Nevada’s Medicaid system, even if they were otherwise ineligible. Here, in Wisconsin, State Representative Eric Genrich, (D-Green Bay), and State Senator LaTonya Johnson, (D-Milwaukee) introduced similar legislation that would allow anyone to buy in to BadgerCare, Wisconsin’s version of the Medicaid program. The Nevada bill was vetoed and the future of the Wisconsin bill remains to be seen. But both proposals demonstrate a very competitive alternative to private insurers. Medicaid enjoys a high degree of satisfaction among its recipients. On average, Americans report satisfaction with their care at rates comparable to or better than private insurance. And, even though Medicaid serves a portion of the population with typically high health care costs, the program keeps costs significantly lower than its private counterparts.

Giving the general public access to health care of that quality is likely to be disruptive to the current market. Even Americans that might be wary of more comprehensive changes to our healthcare system (like single-payer efforts spearheaded by California and New York) would be amenable to participating in an existing, but expanded, program. As more people join and have positive experiences, the people’s fears about publicly administered health care would start to fade. Private insurers would be forced to compete with the public option in both quality and cost. This is bad news for anyone seeking to uphold a status quo where private insurers rake in profits while Americans struggle to manage rising premiums.

What’s a politician in the pocket of the insurance lobby to do? Well, if the reality of Medicaid won’t conform to myths about socialized medicine, you could force it to do so with legislation. First, you’d want to constrain the program so it reached as few people as possible. In other words, you’d want to end the Medicaid expansion from the ACA, as the AHCA and BHRA do. Second, you’d want to reduce the amount a state could spend (either per person or in total) to force states to reduce the amount of citizens it serves, or reduce the amount of care those citizens get. In other words, you’d want to reduce overall spending on Medicaid compared to projections by introducing block grants or per capita limits, just as the AHCA, BHRA and the White House’s budget call for.

Medicaid is a target because it works too well. As the Nevada Legislature and Democratic leaders in the Wisconsin Legislature have already figured out, the next step to a better healthcare system is right in front of us. The architects of the Trump Budget, the AHCA, and the BHRA are putting up roadblocks to halt this progress. The Senate left the issue unresolved when they left for the July 4th recess. They’ll be back on the 10th. Call your senators. Let them know Americans want to expand a working program, not dismantle it.