Don’t Buy the Scare Stories About the GOP’s Medicaid Reform

The charges against the Republican proposals for Medicaid reform as part of the American Health Care Act debate are grave and condemning.

“Mr. Trump and the Republicans would lower spending on the frailest and most vulnerable people in our health care system,” report three esteemed health care policy professors, David Grabowski of Harvard University, Jonathan Gruber of MIT, and Vincent Mor of Brown University.

The professors declare that many will suffer if the Republican legislation is passed, but that the elderly disabled in nursing homes are bound to suffer the worst.

Since Medicaid “pays nearly half of nursing home costs for those who need assistance because of medical conditions like Alzheimer’s or stroke,” the professors note, therefore, “there is no way the program can shrink by 25 percent (as under the AHCA) or almost 50 percent (as under the Trump budget), without hurting these people.”

There are other charges that sound equally harsh, such as that the Republican changes to Medicaid will result in “217,000 additional deaths over the next decade.” And that they would cut $772 billion from Medicaid in order to grant $701 billion in tax cuts for the rich.

However, the assertion by the professors, if accurate, that the elderly disabled will be refused nursing home and medical services is plenty to unseat the Republicans.

“It’s nonsense, absolute nonsense,” Charles Blahous of the Mercatus Center of George Mason University and the Hoover Institution of Stanford University told me last week.

“A lot of these scare stories that people are circulating—scare stories about people being thrown out of nursing homes, and children being thrown out if their wheelchairs, and other with congenital heart conditions being denied their benefits. These things have no basis in the legislation that is pending.”

Blahous explained that the vast amount of savings the Republicans are seeking in Medicaid comes from a proposed change in how much the federal government compensates the states for the Medicaid expanded population of childless, non-disabled, non-elderly adults that were added by the Affordable Care Act.

The ACA compensates the states at 100 percent for this expanded childless, non-disabled, non-elderly population that is earning under $16,000 per year.

The Republican AHCA proposes to compensate the states the same for the expanded childless, non-disabled non-elderly adult population as the states are compensated for traditional Medicaid recipients—50 percent.

Blahous concluded about the Republican Medicaid proposal: “It has nothing to do with seniors. It has nothing to do with the disabled. It has nothing to do with poor children. Those people were eligible for Medicaid before the Affordable Care Act. They would be eligible for Medicaid after the Affordable Care Act—if it’s repealed—and they are simply not in jeopardy as a result of what’s being discussed on the Hill.”

In sum, the blunt charge that Republicans are emptying nursing homes of the elderly disabled in order to find savings in Medicaid is starkly inaccurate.

I also spoke last week with Doug Badger of the Galen Institute in order to understand the genuine challenge for the Republican lawmakers with regard to the elderly and disabled in nursing homes.

“In New York State, for example, for that elderly person in the nursing home, for the child in the poor household, for the developmentally disabled person, New York will pay their medical care, submit the bill to the federal government, and the federal government will pay half.

“But for this population of non-disabled, childless adults, the Federal government will pay 100 percent.

“And so, what the Republicans are saying is, states can continue, at their option, to cover this (expanded non-disabled, childless adult) population, but we’re no longer going to give them preferential financial treatment.

“We’re no longer going to incentivize New York, California and other states to sign up these folks, potentially at the expense of other people who many regard as more deserving of help.”