President Trump on Wednesday said that the Republican plan to change Medicaid would lead to an increase in spending, not a cut, accusing Democrats of having “purposely misstated” the facts.
In a literal sense, he's right. The total amount of money spent on Medicaid under the Senate Republican plan would grow, albeit slowly, from 2017 to 2026.
Democrats purposely misstated Medicaid under new Senate bill - actually goes up. pic.twitter.com/necCt4K6UH
— Donald J. Trump (@realDonaldTrump) June 28, 2017
But the accounting he uses to show Medicaid spending is wildly divergent from the way budget analysts, policymakers and many lawmakers account for spending levels. Medicaid spending under the Republican plan would not increase when accounting for the inflation of medical costs. In fact, it would mark a “a reduction of $772 billion in federal outlays for Medicaid” over 10 years compared with what would happen if the Senate bill is not enacted into law, the Congressional Budget Office said Monday.
In his Twitter post, which marks one of the only times he has weighed in on Medicaid since becoming president, Trump adopts an argument made many times by his budget director, Mick Mulvaney. Mulvaney has said that any absolute increase in government spending, regardless of inflation, should be considered an increase. This, however, is often not how government budgets are tabulated. Government budget officials look at what would happen under existing law, a process they consider setting the “baseline,” and then factor in whether a new proposal would increase or decrease that baseline.
Viewed through that lens, here's how Trump's chart looks.
The Senate Republican bill would, among other things, propose setting caps on Medicaid spending and then only increasing those caps by a measurement of inflation that increases more slowly than medical cost increases.
For example, Medicaid spending under existing law would grow from $393 billion in 2017 to $415 billion in 2018 and then eventually to $624 billion in 2026. Under the Senate Republican plan, Medicaid spending would grow much more slowly, reaching $405 billion in 2018 and just $464 billion in 2026.
That’s a larger dollar amount, but the number is misleading because it doesn't take into account inflation, historical increases in medical costs, and a range of other things.
Medical costs tend to rise more quickly than inflation, but the Senate bill is designed so that increases in the cost of health care will eventually outpace annual increases in Medicaid.
The CBO estimated that there would be 15 million fewer Medicaid beneficiaries under the GOP plan by 2026 than under existing law.