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Medicaid Block Grants = De Facto Cuts to Voiceless Children Board in Poverty

December 29, 2016

For the past several years, austerity minded Republicans have championed the need to cut back on entitlements in order to achieve a balanced budget. The notion of balancing the federal budget seems commonsensical: a household cannot spend moe than it takes in and a government shouldn’t do so either. But of course a responsible household almost always spends more than it takes in so that it can afford a house and, in many cases, an automobile, furniture, and other large acquisitions that it acquires on credit…. including the payment for health insurance to pay for unforeseen medical expenses. Analogously, the federal government sets aside funds to pay for medical insurance to cover expenses incurred by the elderly (Medicare) and the financially strapped (Medicaid). These funds are characterized by those seeking to balance the budget as “entitlements”, a convenient misnomer that reinforces the notion that they are provided to undeserving recipients.

In “The Quiet War on Medicaid“, an op ed piece in this past Monday’s NYTimes, Gene Sperling, who served as director of the National Economic Council from 1996 to 2001 and from 2011 until 2014, warns progressives to keep an eye on Medicaid when the debate on cuts to medical “entitlements” ensues in the coming year because he foresees a shell game about to play out. Here’s the way it will work. Paul Ryan and his fellow austerity-minded colleagues will propose cuts to Medicare and Medicaid. The seniors, who vote in large numbers, will lead a charge to push back against Medicare cuts and as a result they will be taken off the table. In the meantime progressives will argue that cuts to Medicaid will hurt those with the greatest needs. To show their magnanimity, the Republican leadership will offer block grants to states that marginally increase the budget and argue that by giving the money to the states with “greater flexibility” and “less bureaucracy” that there will be no harm done to the neediest. The reduction in the increase will result in an overall cut to the budget, but will do far more harm than the austerity minded congressmen will lead the public to believe. But Mr. Sperling describes how this gambit will play out:

Sweeping cuts to Medicaid would hurt tens of millions of low-income and middle-income families who had a family member with a disability or were in need of nursing home care. About 60 percent of the costs of traditional Medicaid come from providing nursing home care and other types of care for the elderly and those with disabilities.

While Republicans resist characterizations of their block grant or cap proposals as tearing away health benefits from children, older people in nursing homes or middle-class families heroically coping with children with serious disabilities, the tyranny of the math does not allow for any other conclusion. If one tried to cut off all 30 million poor kids now enrolled in Medicaid, it would save 19 percent of the program’s spending. Among the Medicaid programs at greatest risk would be those optional state programs that seek to help middle-income families who become “medically needy” because of the costs of having a child with a serious disability like autism or Down syndrome.

In the concluding paragraph to his op ed piece, Sperling notes that this gambit effectively shifts the costs for Medicaid to the states– the majority of whom are led by Republican governors– and ultimately to the local hospitals who will not turn away a patient for lack of funds. Sterling concludes that ultimately

…these anodyne-sounding proposals would lead to an assault on health care for those in nursing homes and for working families straining to deal with a serious disability, as well as for the poorest Americans.  

And assuming the worst, that these cuts DO find their way through the budget process, you can bet that the ultimate victims will not be the “…working families straining to deal with a serious disability” for they have a voice in the State houses. It will be the poorest Americans… the children who are being raised in poverty.

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