It’s no secret the Republicans in Congress want to slash the social safety net. It’s also no secret Medicaid has been one of the favored targets for years. The not-so-new-idea of late is to fund the program based on block grants. There are some strong arguments against this:
(1) Block grant funding is set. Should a state have program costs exceeding the block grant funding one of two options are available – either appropriate state funds to make up the difference, or cut back on services or eligibility.
(2) The traditional match rate has been 50%, meaning that the state is insulated to some extent from unexpected cost increases and thus can ensure health insurance coverage for low income residents.
(3) When baffled by actual numbers, Republicans often return to the high-flying rhetoric about making the program more “flexible” under state control. No. In reality the states already have that “flexibility” in terms of services covered, ways providers are paid for those services, the delivery of services, and eligibility levels. [FUSA pdf]
Those who could see their health care access cut if Medicaid becomes a block grant program are those in Nevada who are earning $16,105 per year for an individual, or $32,913 for a family of four. (2014) The ACA expansion of Medicaid allowed the state to add approximately 187,100 low income workers to the benefits. Repeal of the ACA would obviously jeopardize this expansion, and cost the state approximately $1 billion in federal funds. [KFF and FUSAorg]
Consider for a moment that about 160,700 people in Nevada are employed in “accommodation and food services” jobs in which the average (mean) wages are $25,360 per year, the 10th percentile wages are approximately $16,450. Or, we could look at health care support services with 18,860 employed at average (mean) wages of $33,900 with $22,470 at the 10th percentile and $26,500 at the 25th percentile. [DETR] Not to put too fine a point to it, but slashing Medicaid in Nevada would quite possibly have a negative effect on the ability of those employed in “accommodation and food services” to access health care, and these are the people who work in one of Nevada’s major industries. Home health care personnel wouldn’t fare much better.
When all else fails the Republicans haul out the “bankrupt system” allegations. To the contrary, the Medicaid expansion has been a definite benefit to Nevada and other states:
- CBO estimates show that the federal government will bear nearly 93 percent of the costs of the Medicaid expansion over its first nine years (2014-2022). The federal government will pick up 100 percent of the cost of covering people made newly eligible for Medicaid for the first three years (2014-2016) and no less than 90 percent on a permanent basis.
- The additional cost to the states represents a 2.8 percent increase in what they would have spent on Medicaid from 2014 to 2022 in the absence of health reform, the CBO estimates indicate.
- This 2.8 percent figure significantly overstates the net impact on state budgets because it does not reflect the savings that state and local governments will realize in other health care spending for the uninsured. The Urban Institute has estimated that overall state savings in these areas will total between $26 and $52 billion from 2014 through 2019. The Lewin Group estimates state and local government savings of $101 billion in uncompensated care. [CBPP]
A further note about uncompensated care, we need to look at the example of Pennsylvania and its latest report on the impact of expanded Medicaid and the Affordable Care Act:
“For the first time in a decade, Pennsylvania’s 170 general acute care hospitals in 2015 saw a drop in charity care spending, saving the average hospital about $200,000 over 2014, according to state data obtained by the Pittsburgh Post-Gazette.
Coupled with a nearly $300,000 drop in bad debt at the typical hospital, hospitals saved about $500,000 on uncompensated care in 2015, according to data from the Pennsylvania Health Care Cost Containment Council.
The state hospital association and patient advocates alike believe the drop in spending on charity care and bad debt is due to the impact of the Affordable Care Act, which is what experts said they believed caused a similar drop for the 24 states that adopted the ACA in 2014, as reported in the Post-Gazette series, Counting Charity Care, last year.” [PPG]
Thus, in their ardor to repeal the Affordable Care Act and slash Medicaid support by turning the program into a block grant disaster, Representative Amodei (R-NV2) and Senator Dean Heller (R-NV) may need to explain:
(1) Why reducing support for a program which serves the least well remunerated among us – especially in one of our major industries – is a bright shining idea?
(2) Why eliminating programs which reduce uncompensated care costs to local hospitals and health care providers is also such a great notion?