REFORM- How vulnerable is Medicaid in the debt ceiling battle?

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[MM Curator Summary]: With the explosive growth in Medicaid enrollment the past few years, and it now paying for everything- good luck prying it from the hands of bennies.



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About The Author : Joanne Kenen

BIRTHS, DEATHS AND OPIOIDSMedicare and Social Security look like they are off Washington’s proverbial budget-cutting table in this spring’s debt ceiling showdown after President Joe Biden’s impromptu sparring with the GOP during the State of the Union.

That could mean Medicaid — the combined federal-state health program that currently covers about 90 million low-income Americans, including lots of kids and elderly people — will have a great big spot of its own on that spending cut table.

Nobody knows how intense the brinkmanship over raising the national debt ceiling will be, or how deep the partisan acrimony may run a few months from now when we hit the “X date” when the federal government won’t be able to pay its bills. Either way, Medicaid is politically better positioned to weather the storm than ever.

The House Republican “Commitment to America” released before the fall elections was vague on trimming spending, and even more vague on health policy. The conservative Republican Study Group’s budget blueprint for the current fiscal year would have restructured Medicaid entirely and cut $3.6 trillion over a decade compared to the current spending trajectory — but there’s no way that Democrats (or even some more establishment Republicans) would accept that.

Medicaid, once the overlooked stepchild to the big two entitlements, Medicare and Social Security, has become a bigger part of the U.S. safety net. And it’s got a much stronger constituency. Republicans included a bid to turn Medicaid into a block grant program — an idea that dates back to the Reagan years — as part of its decade-long effort to repeal the Affordable Care Act. But that assault on Medicaid was one reason repeal failed.

“Medicaid is way more politically resilient than people think,” said Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation. He noted it’s the largest payer of nursing home care in the U.S, and it’s a lifeline for disabled kids and their families, both very politically sympathetic populations.

The program has expanded a lot over the years, including covering more low income people under Obamacare, although 11 states are still refusing to take part. Many more people got Medicaid coverage during Covid, although some will lose Medicaid as the public health emergency declaration winds down.

More than half of US kids are covered by Medicaid and its sister program the Children’s Health Insurance Program or CHIP. In some states, more than half of births are covered, and it provides postpartum care, including to minority populations that have disproportionately high rates of maternal death. And it covers long-term care for the poor elderly — or people who became poor after spending most of their savings on long-term care.

“Medicaid now is touching the majority of families in the country. It’s part of people’s lives at critical junctures. Birth and death,” said Joan Alker, executive director of the Center for Children and Families at Georgetown University. Meaning renewed Republican efforts to target it will likely receive pretty intense pushback.

It’s also a huge payer for mental health and for addiction treatment for opioids, including for kids.

“If you are cutting Medicaid, you are chopping at mental health in a bad way,” said Ezra Golberstein, a University of Minnesota health economist who studies behavioral health.

And — as if all that wasn’t enough — Medicaid keeps safety net hospitals afloat. And those hospitals, which treat a large share of poor people in both rural and urban settings, are in an even more precarious financial position than usual after the pandemic.

“They are fragile in the best of times,” said Bruce Siegel, president and CEO of America’s Essential Hospitals, which represents those hospitals. Now, he said, “they are losing money,” partly because of high labor costs and temporary staff brought in to fill pandemic-related shortages. Even without a big GOP attempt to overhaul Medicaid, these hospitals face a scheduled cut in special payments they get — although Congress has reversed similar planned cuts to health providers in the past.

“Cutting Medicaid,” Siegel said, ” would lead to some hospitals, major systems in this country, closing access — and potentially closing hospitals.”

Medicaid is a great big pot of money — more than $700 billion in fiscal 2021 (though it may decline as the pandemic wanes). So if budget cutting is the name of the game this spring, Republicans will likely take another run at it. Even if they don’t go down the block grant path, there are a host of other conservative ideas — charging premiums, enacting work requirements, limiting eligibility — that they could turn to.

Which doesn’t mean they will succeed.

Tom Miller, a health expert at the center-right American Enterprise Institute who has written extensively on what he sees as more realistic conservative approaches to improving Medicaid, including broader use of federally-approved waivers for states, expects conservative Republicans to try again this year — and again overreach and fail.

“There’s healthcare blustering,” he said. “And the blustering stage may be at another magnitude.”