The White House hearts Medicaid

(Center on Budget and Policy Priorities) I’ve long been concerned that Paul Ryan’s Medicare plan would get killed but that part of his Medicaid plan — which is, if anything, more draconian — would slip into law. But at the Peterson Foundation’s big conference today, Gene Sperling, director of Obama’s National Economics Council, was, if anything, more vociferous in defense of Medicaid than Medicare:

There is enormous discussion about the revenue side and the Medicare side. But from a policy perspective, from a values perspective, we should be very deeply troubled by the Medicaid cuts in the House Republican plan. . . . After they completely repeal the Affordable Care Act, which would take away coverage for 34 million Americans, according to the Congressional Budget Office. After they’ve completely repealed that, they do a block grant that would cut Medicaid by $770 billion. In 2021, that would cut the program by 35 percent. Under their own numbers, by 2030, it would cut projected spending in Medicaid by half. By 49 percent. So, of course — I don’t think — or imply any negative intentions or — lack of compassion. But there is a tyranny of the numbers that we have to face.

And here’s the tyranny of the numbers. Sixty-four percent of Medicaid spending goes to older people in nursing homes or families who have someone with serious disabilities. Another 22 percent goes to 35 million very poor children. Now I ask you, how could you possibly cut 35 percent of that budget and not hurt hundreds of thousands, if not millions, of families who are dealing with a parent or a grandparent in a nursing home, or a child with serious disabilities. How is the math possible? If you tried to protect them mathematically, you would have to eliminate coverage for all 34 million children.

A few things worth noting here. First, as Sperling says, Medicaid is central to the Affordable Care Act’s coverage provisions. There’s no way his plan and the Affordable Care Act can coexist. I think that provides Medicaid a lot of cover, because it likely solidifies Democratic opposition to reforms that substantially change eligibility.

Second, Medicaid is much, much, much cheaper than any other insurance product you can think of. It’s cheaper than the health care members of Congress get, than private insurance, than Medicare. There’s no trick that could substantially cut its costs below where they are now. The only thing state flexibility can do is cut eligibility or reduce the benefits package. But cutting eligibility or not covering, say, organ transplants sounds bad. So people say “state flexibility” instead, as that’s a good way to hide the changes they’re really talking about.