Senate GOP Health Bill Would Slash Medicaid. Here's How.

CNN/ Newswire | 6/26/2017, 8:18 a.m.
Republicans have wanted to repeal Obamacare for years -- but they've wanted to overhaul Medicaid for far longer.

By Tami Luhby

NEW YORK (CNNMoney) -- Republicans have wanted to repeal Obamacare for years -- but they've wanted to overhaul Medicaid for far longer.

They are now getting their chance.

The health care legislation working its way through Congress would do much more than its stated purpose of repealing and replacing Obamacare. It would make the most far-reaching changes and deepest cuts to Medicaid in the program's 52-year history.

"Medicaid: Sending it back to the states. Capping its growth rate. We've been dreaming of this since I've been around, since you and I were drinking at a keg," House Speaker Paul Ryan said in March at an event hosted by the conservative National Review magazine.

Senators are still hashing out the details of their bill, which differs somewhat from the one that passed the House last month.

But the general thrust of both chambers' plans is clear: Lawmakers would effectively end Obamacare's expansion of Medicaid to low-income adults and would dramatically curtail federal support for the overall program, which covers more than 70 million low-income Americans. They would give states more control and flexibility in administering the program, but also require governors and legislators to foot much more of the bill.

President Trump is committed to making sure that no one currently receiving Medicaid "would be affected in any way," White House Press Secretary Sean Spicer said Friday. The president feels the Senate bill reflects this and "he's pleased with that," Spicer added.

It's hard to see how these changes would have no impact, however. The overhaul laid out in the House bill would reduce federal spending on Medicaid by nearly a quarter by 2026, compared to current law, according to a Congressional Budget Office assessment. Some 14 million fewer people would be covered by the program at that time.

The CBO is expected to release its score of the Senate plan early this week.

Medicaid is the nation's largest single health insurer, covering nearly one-fifth of all Americans. It insures two in five children and the same share of the disabled, as well as three in five nursing home residents. It pays for nearly half of all births and spending on long-term care in the U.S.

The majority of Americans, regardless of political party, have a favorable view of Medicaid and say it works well for most low-income people in the program, according to a new Kaiser Family Foundation poll.

Republican lawmakers, however, have long blasted Medicaid as inefficient and bloated. Many stress that one-third of doctors don't see Medicaid patients and say the program provides poor-quality health care.

Enrollment shot up to 54.5 million people in the decade before the Affordable Care Act was passed, and total spending nearly doubled to $402 billion, in part because of the Great Recession.

Also, many Republicans say that the program's current open-ended funding design encourages states to "game the system." The federal government matches between half and three-quarters of what states shell out on enrollees, providing the biggest injection of federal funds into state budgets. So states have an incentive to spend more to get a larger federal match.