It’s also worth noting that nearly two‐thirds of Medicaid spending actually goes to the elderly and disabled in nursing homes. In fact, an entire industry of eldercare lawyers and accountants exists to help the middle‐class elderly shield their assets so that Medicaid can pick up the tab for their long‐term care. Medicaid reform might actually force states to consider whether all Medicaid recipients are equally in need of taxpayer‐funded support.
3. Cuts are in the eye of the beholder. After the Republicans finish “cutting,” “slashing,” and “destroying” Medicaid, the program will still be growing at a rate of about 2 percent per year. In any place outside of Washington, D.C., that might be seen as an increase. And while the Republican plan would hold Medicaid enrollment roughly where it is today, at 70 million Americans, that’s still some 15 million more people on the program than there were in 2010.
True, Republicans would hold the rate of growth below the previous baseline and below expected rates of medical inflation. But since that baseline is unsustainable (see point 1 above), it’s hard to call that a cut in any meaningful sense.
4. Medicaid’s value is debatable. One might justify spending all this money on Medicaid if Medicaid were a better program. But the evidence on Medicaid and health outcomes is decidedly mixed. One study out of Massachusetts suggests that increased coverage may have reduced mortality. Another, better‐designed study from Oregon showed no improvements in medical outcomes from being in Medicaid compared with being uninsured. Other studies show that Medicaid may offer some benefits for pregnant women and children — who, as noted above, were not part of Obamacare’s Medicaid expansion — but few benefits for single adults. There is also some evidence to suggest that states that contract out management of Medicaid have better outcomes than do those that try to run the program themselves. The data is all sufficiently muddled to make us cautious about predicting how many people Medicaid cuts will kill.
Moreover, while Medicaid may be better than nothing for people without insurance, it does not provide coverage nearly as good as that provided by private insurance. We know, for example, that one‐third of primary‐care doctors won’t accept Medicaid patients, and that Medicaid patients have more difficulty getting timely appointments than those with private insurance. Further, studies by the Robert Wood Johnson Foundation and others show that increased Medicaid coverage crowds out private insurance, suggesting that Medicaid expansion may have pushed some working poor to switch to worse coverage.
5. This is the first skirmish of many entitlement battles to come. Medicaid is really the low‐hanging fruit of the entitlement wars. If Congress can’t reform Medicaid, how can it ever be expected to make changes to Social Security and Medicare, which have wider and more powerful constituencies? Yet there is no way to get control of government spending and rein in our massive and growing debt without tackling entitlements. Social Security faces more than $32 trillion in unfunded future liabilities, while Medicare is looking at an astonishing $58 trillion in future red ink. The changes required to deal with shortfalls of that magnitude will be enormous. If just slowing the growth of Medicaid is impossible, does anyone really think we can do the much harder lifting necessary to reform Social Security or Medicare.
Given Democratic intransigence, the deep divisions among congressional Republicans, and the indifference of President Trump, there is little reason to be optimistic about the prospects for Medicaid reform. Still, this is a fight worth fighting.