“Democrats purposely misstated Medicaid under new Senate bill — actually goes up.”
— President Trump, in a tweet, June 28, 2017
The White House is defending changes to Medicaid financing in the Senate health-care overhaul bill by saying that the Better Care Reconciliation Act (BCRA) actually increases Medicaid spending. In the tweet, Trump included a graph that showed the spending increases from 2017 to 2026:
White House senior adviser Kellyanne Conway recently made a similar claim on ABC’s “This Week”: “These are not cuts to Medicaid. … This slows the rate for the future and it allows governors more flexibility with Medicaid dollars because they’re closest to the people in need.”
Does Medicaid spending actually go up, not down, in the Senate bill?
The Senate bill would phase out the Medicaid expansions under Obamacare by reducing the federal match for newly eligible adults, place a cap on the federal reimbursements to states, and lead to fewer people being enrolled than under current law.
So far, 31 states and the District of Columbia have expanded Medicaid eligibility. The nonpartisan Congressional Budget Office estimates that under the Senate bill, states will start rolling back their expansions, and people who newly became eligible under Obamacare no longer would qualify.
The cap on federal reimbursements would begin in fiscal 2020. If the states decide to reduce coverage as a result, some Medicaid enrollees may end up losing coverage. With Medicaid reimbursement rates already being lower than Medicare or private insurance, fewer providers may see Medicaid patients if states reduce rates. States run their own Medicaid programs and can decide not to make any changes to their level of coverage. But they would need to raise revenues some other way. (For more, read this analysis by the nonpartisan Kaiser Family Foundation on challenges states would face in responding to federal Medicaid caps.)
In 2017, the federal government spent $393 billion on Medicaid. If no change is made to the current law, that spending is expected to be $624 billion by 2026. The CBO calculates this by taking several factors into account, such as projected enrollment growth, health-care costs, inflation, population growth and policies that states may enact. The CBO estimates that if current law stays in place, more states would expand Medicaid, though it doesn’t specify how many. Four states were considering expansion in 2017.
But things would change under the Senate bill. Instead of Medicaid spending growing to $624 billion by 2026, it would be $464 billion — a difference of $160 billion in 2026. This means a reduction of $772 billion over 10 years, from 2017 to 2026. Spending still increases, but at a much slower rate than under current law. Based on the way the CBO analyzes legislation, this would be considered a cut in federal spending relative to current projections. (An updated CBO estimate released Thursday showed Medicaid spending would be reduced 35 percent by 2036, compared to current law.)
Trump says Medicaid spending “actually goes up” because he is referring only to the raw dollar increase between $393 billion in 2017 and $464 billion in 2026.
But that omits the other part of the full picture: The Senate bill significantly reduces how much the federal government would spend on Medicaid in future years compared to projections without a change in the current law. It would lead to 15 million fewer Medicaid enrollees by 2026 than there would be if current law stayed in place. For context, Medicaid expansion under Obamacare provided insurance to as many as 14 million more people.
Here’s what this looks like, in context. Trump’s tweet only shows the lower line, not the one above or the gap in between.
During the campaign, Trump promised not to cut Medicaid. So now, the rhetoric he and his aides use is that Medicaid spending “actually goes up” or that the bill “slows down the rate of spending.”
One health-care policy analyst explained it this way: Say your employer told you that your salary will go up every year by 2.5 percent to account for inflation. But instead, you get a 0.5 percent increase, even though the cost of your living expenses increases 2.5 percent with inflation. You can call that a “reduction,” a “cut,” or a “slow rate of growth,” but ultimately, you have less money than you would otherwise.
A White House spokesman said: “The reality is Medicaid spending is expected to increase by $71 billion. Only in Washington is a $71 billion increase considered a cut.”
The Pinocchio Test
In defending the changes proposed in the Senate legislation to Medicaid financing, Trump says Medicaid spending “actually goes up” through the bill, and showed a graph indicating such an increase.
But that’s quite misleading. It’s just one part of the picture that omits the fact that if the Senate bill as written by the date of his tweet becomes law, federal spending would be reduced by $772 billion over 10 years, according to the nonpartisan Congressional Budget Office. Moreover, 15 million fewer people would be enrolled in the program over 10 years than would be under current law. We award Three Pinocchios.
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