If you were curious why “Fox and Friends” is President Trump’s favorite television show, here’s a good example:
“Kellyanne, this week’s big deal for health care, the Obamacare overhaul in the Senate,” host Ainsley Earhardt said to Trump adviser Kellyanne Conway on Monday morning. Earhardt noted opposition from Republican senators that was heavily focused on how the Senate bill would reduce federal spending on Medicaid.
“You yesterday on the Sunday shows were saying that is not true, no cuts,” Earhardt said. (On ABC’s “This Week,” Conway told host George Stephanopoulos that “these are not cuts to Medicaid.”) “Now, if we watch the mainstream media this morning, they’re saying you were caught in a lie.”
One way to continue from this point is to challenge Conway with the numbers — asking her how she explains her assertion in light of what members of her own party are saying.
Another way to continue is the way Earhardt did: “So, let’s let you set the record straight. What’s your reaction to that?”
This, however, is not an article about media critique. It is an effort to answer that question: How is it that Republicans, including Conway, are claiming that a reduction in federal spending on Medicaid is not a cut to Medicaid?
Here was Conway’s explanation.
It’s not a lie. In fact, this is slowing the growth of Medicaid and allowing governors more flexibility in their states to be able to give the dollars out, because they are closest to the people in need. Also, Medicaid continues to be funded. Medicaid over time would be unsustainable and unaffordable because Obamacare failed to bring the costs down for health care, so the states are having a very difficult time meeting the bills.
To understand that argument requires understanding how Medicaid works and what Obamacare (technically the Affordable Care Act) did.
Before the ACA became law, the federal government covered 50 percent to 75 percent of the Medicaid costs of the states (depending on the state). When the ACA passed, the law encouraged states to expand the pool of eligibility for Medicaid by having the federal government cover 100 percent of the costs for those added to the program under Obamacare. If a state chose to allow more people to enroll in Medicaid by increasing the income limit — and 31 states chose to do so — there was no initial cost to the state.
That wasn’t permanent. By 2020, the federal government would only pay for 90 percent of those costs — still more than for those enrolled in Medicaid traditionally, but not every penny.
The House bill (the American Health Care Act) would immediately reduce that percentage to the range used for all other Medicaid patients. The Senate bill (the Better Care Reconciliation Act) would delay that reduction slightly, starting in 2020, but get to the same point.
One catch to this plan is that it would only apply to new enrollees, so the federal government would still cover the same percentage of the costs for those currently covered under the Medicaid expansion. The problem with this safeguard is that there’s a lot of churn among Medicaid recipients, meaning that people lose eligibility and then regain it soon after. (A 2015 study estimated that half of those enrolled in Medicaid from 2004 to 2008 lost eligibility within 12 months for a variety of reasons.) The Center on Budget and Policy Priorities figures that by 2027, only 100,000 of those currently enrolled in the Medicaid expansion would still have coverage, meaning that everyone else would have less of their cost of care covered by the federal government.
Conway argues that the Republican measures give “governors more flexibility” in allocating Medicaid funding, thanks to another change in the bills, which would switch how the government pays for Medicaid by moving to a per capita compensation system. But the reduction in federal funding as above would also mean states would face significantly higher cost, even while, as Conway argues, it’s already the case that “states are having a very difficult time meeting the bills.”
The CBPP calculated how the costs to states from Medicaid expansion would jump if the federal matching percentage is reduced, both immediately or more slowly.
In many places, states would pay twice as much as they are now to continue coverage for those covered under the expansion. The net effect of the House bill, the Congressional Budget Office estimated, would be 14.4 million fewer people enrolled in Medicaid by 2026 — and $834 billion less spent by the federal government.
The Senate bill would also change how the amount allocated to Medicaid recipients is increased over time. The House bill would have tied annual increases in funding per patient to the consumer price index for medical care, plus 1 percent. The Senate bill would tie the increase to the broader — and more slowly increasing — consumer price index.
Here’s how each of those indexes has changed since the passage of Obamacare, for example.
The gap between those lines represents how much less funding the Senate bill would provide to states over time.
Conway’s argument is that decreasing federal spending and slowing the amount spent per patient over the long term is not a “cut” to the program, since the program still exists and since there will still be funding. That’s the political goal, to allow Republicans [like Sen. Pat Toomey (R-Pa.) who made the case on CBS’ “Face the Nation” on Sunday] to argue that vulnerable Medicaid patients won’t be at risk because funding will continue and because the Obamacare expansion mostly added people who were healthier. But reducing funding to states means that states will have to either pay more or decide how and where to focus Medicaid enrollment to reduce costs.
The crew at “Fox and Friends” didn’t raise any of this with Conway. Perhaps an analogy will make it more understandable. If Fox News pledged to spend $10 million on your show a year but then decided that it would spend only $5 million in 2018, asking you to make up the difference with increased advertising, would you consider that a cut?
Please show your work.