Congress is poised to approve steep cuts to the Medicaid program, and multiple new studies seek to analyze the impacts significant changes could have on states and enrollees.
Multiple scenarios for overhauling Medicaid are in play. In one, expansion funding rolled out under the Affordable Care Act (ACA) could be pulled back, and, in another, legislators could institute per capita spending caps on the program. Both options have historically been touted by conservatives seeking to reduce outlays.
A new paper from the KFF estimates that eliminating the federal match for funding under Medicaid expansion could reduce spending in the program by $1.9 trillion over the course of a decade and lead to a quarter of enrollees, or about 20 million people, losing coverage.
The researchers examine two possible ways that this could play out, based on whether expansion states choose to pick up the slack for lost federal funding. If they do, federal spending would decrease by $626 billion, or 10%, but state spending would increase by 17% as they cover those funds.
Should states choose to end the expansion, the number of people leaving the program would decrease overall enrollment by 24%, according to the analysis.
The researchers note that Medicaid provides coverage for 1 in 5 people and accounts for $1 of every $5 spent on healthcare.
"Medicaid is administered by states within broad federal rules and jointly funded by states and the federal government, meaning restrictions in federal Medicaid spending could leave states with tough choices about how to offset reductions," they wrote.
Analysts at the Urban Institute, a left-leaning think tank, also looked at the impact of eliminating the expansion funding match. They predicted that states would need to find $44.3 billion in spending cuts or additional revenues if they want to continue to offer the expanded program.
Eight states—North Dakota, Indiana, Montana, Nebraska, Oregon, Colorado, Washington and New York—would need to increase their spending by 30% to cover Medicaid expansion, the report found.
The Urban Institute report estimates that enrollment in Medicaid and the Children's Health Insurance Program would decrease by 15.9 million people, or 21.8%. The enrollment decreases would be felt most acutely among adults aged 19 to 34, those older than 55, white individuals, Black individuals and people with fair or poor health, according to the report.
The researchers estimate that nine states would feel the impact in uninsurance the most: New York, the District of Columbia, Kentucky, Michigan, Pennsylvania, West Virginia, Iowa, Louisiana and New Mexico.
“Rolling back Medicaid expansion would imperil the health of millions while crippling state budgets and economies," said Kathy Hempstead, senior policy advisor at the Robert Wood Johnson Foundation, which supported the analysis, in a press release.
Both the KFF and the Urban Institute also dove into the effects of instituting per capita caps in Medicaid.
The KFF report projects that such caps could reduce spending in Medicaid by $532 billion to nearly $1 trillion depending on how states choose to handle the matter. If per capita caps were rolled out alongside ending the ACA's expansion, Medicaid spending could decline by as much as $2.1 trillion by 2034, according to the report.
The analysts estimate that with per capita caps in place alone, enrollment would decrease by 15 million. Should they be instituted in tandem with the end of Medicaid expansion, that could double to 30 million.
The report also notes that while all states would be affected by per capita caps, some would face greater spending increases than others. Depending on their responses, some states could see their expenditures increase by 57% if they do choose to pay for the cuts.
The Urban Institute
looked at the effect of per capita caps based on models outlined in the American Health Care Act (AHCA), Republicans' 2017 attempt to repeal and replace the ACA, and the Better Way proposal. The AHCA's approach would reduce Medicaid spending by $1.1 billion over a decade, while the Better Way model would reduce spending by $676 billion.
If these caps were combined with eliminating the federal match for Medicaid expansion, it would reduce federal spending overall by $1.2 trillion under the Better Way model and $1.7 trillion under the AHCA's model by 2035.
However, states that want to make up for the loss of federal funding would see their own spending increase by 25.9% under Better Way and 37.1% under the AHCA.
"This proposed policy amounts to a wholesale transfer of financial responsibility to states, because the need for healthcare will not change, just the means to pay for it,” Hempstead said in a second press release. “The consequences will be most drastic in our poorest states, which will be very hard-pressed to close this massive funding gap.”
Drew Altman, president and CEO of the KFF,
wrote a column examining the way Medicaid enrollees who voted for President Donald Trump are reacting to the push to cut the program. The KFF conducted focus groups with these voters in several states and found that many did not expect to see big cuts to Medicaid.
Altman wrote that for most Trump voters with Medicaid coverage, the economy and immigration were their main focuses. These voters were open to the government addressing fraud, waste and abuse in Medicaid, so it may be politically savvy to frame funding cuts in that way, he wrote.
"Overall, there are partisan and ideological differences between low-income Harris and Trump voters—that’s why they voted as they did—but in the end when it comes to health care, lower-income working people share common problems and needs," Altman wrote.
