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CBO: No, seriously, the Senate bill cuts Medicaid spending

There’s a reason that President Trump and his allies have tried their best to claim that the Better Care Reconciliation Act — the Senate GOP health-care bill introduced earlier this month — doesn’t cut funding from Medicaid. A poll released by Suffolk University this week shows that more than 80 percent of Americans say it’s very or somewhat important that low-income people maintain their Medicaid coverage under any health-care bill. Nearly three-quarters of Republicans agreed.

So we end up with arguments like this one, from Trump on Twitter Wednesday afternoon.

The BCRA isn’t a cut to Medicaid, Trump says, because the amount spent on Medicaid would keep going up!

That line of argument hinges on two points. First, that you don’t consider a reduction in future spending to be a cut. And, second, that you don’t include inflation.

The Congressional Budget Office, which provided the numbers for Trump’s graph, compiles long-term budget projections that we can use to try to replicate Trump’s argument. (The CBO is also the nonpartisan organization that assessed the effects of the proposed BCRA, including that 22 million fewer people would have insurance by 2026 if the bill passed.)

Where the spending cut comes in is how the BCRA spending looks compared to what’s currently planned. Yes, the CBO figures that Medicaid spending will continue to rise, but under the current law (the Affordable Care Act, better known as Obamacare), that spending would rise more. In other words, the future spending has been cut.

On the graph below, that difference is depicted with diagonal lines. That area is the cut in spending.

But, again, that’s in nominal dollars — the actual dollars spent each year. Since a dollar in 1960 was worth more than a dollar in 2010, we can adjust everything into 2016 dollars (using conversion tables from the University of Oregon). When we do that, the increase in spending under the BCRA essentially vanishes.

Why? Because spending $400 billion in 2016 probably gets you more than spending it in 2026. (It depends on what happens with the dollar over the next decade, but this is generally a fair assumption.)

On Thursday, the CBO released an addendum to its initial analysis, at the request of the ranking Democratic senators. That additional analysis includes an estimate of Medicaid spending past the 10-year window that the CBO usually looks at. Because the GOP Senate bill would change how Medicaid is funded past that window, the cuts would worsen from 2027 on. (We looked at this earlier.)

In the first 10 years, Medicaid funding would drop 26 percent from the CBO’s projected baseline. In the 10 years after that, 35 percent.

This new analysis puts a fine point on it. The Senate health-care bill cuts Medicaid spending. End of story.

For Republicans, the trick now becomes selling that to skeptical voters.