Many news reports, letters and op-eds claim that proposals to reform the Affordable Care Act will “gut,” “decimate” or “devastate” Medicaid. This language partly reflects the hyperbole that accompanies any attempt at welfare reform, and partly reflects ignorance about what the proposals would actually do. We heard the same dire warnings in 1996 when cash and food programs were restructured and federal welfare spending was reduced. The predicted apocalypse didn’t happen then, and it won’t happen if Medicaid is reformed.
Most Americans support a safety net for low-income individuals who can’t afford basic health care. The program we have today has gone well beyond that goal.
Medicaid spending was already growing rapidly before the ACA expanded eligibility to include working-age adults with incomes up to 138 percent of the federal poverty level. Today, 69 million individuals, 21 percent of the population, are Medicaid beneficiaries. In some states, the percentage approaches one-third of the population. Beneficiaries are no longer just the poor and most vulnerable.
Left unchecked, Medicaid spending will be the second-fastest growing item in the federal budget over the next 10 years, after interest expense on the ballooning national debt. Medicaid’s actuary expects that combined federal and state expenditures will be just short of $1 trillion annually by 2026. Placing caps on payments to the states would not “slash” these outlays; their growth rate would simply slow. Federal Medicaid spending would still increase 2 percent (instead of 5 percent) annually through 2026.
Instead of making exaggerated claims about the harm reform might do, critics should consider that the proposals have the potential to save Medicaid by making it financially sustainable for millions of the most needy in the future.
Martin Jones
Freeport
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