House Republican Budget Plan: State-By-State Impact of Changes in Medicaid Financing

Original Link: http://www.kff.org/medicaid/8185.cfm

This analysis projects the state-by-state impact of converting Medicaid into a block grant and eliminating the planned expansion of the program by repealing the health reform law, as called for under the House Budget Plan. It finds that the plan would trigger major reductions in Medicaid program spending that could result in significant enrollment decreases compared to current projections, a shift with big implications for states, hospitals and tens of millions of low-income Americans who likely would wind up uninsured.

Projected federal spending on Medicaid for the 10-year period 2012 to 2021 would fall by $1.4 trillion, a 34 percent decline. By 2021, states would receive $243 billion less annually in federal Medicaid money than they would under current law, a 44 percent reduction.

The effect on enrollment in state Medicaid programs could vary widely. By 2021, between 31 million and 44 million fewer people nationally would have Medicaid coverage under the House Budget Plan relative to expected enrollment under current law, the analysis finds, examining three possible scenarios using different assumptions about how states might respond to lower federal funding. Most of those people, given their low incomes and few options for other coverage, would end up uninsured.

The House Budget Plan also could affect health centers, hospitals and safety-net facilities that serve low-income and uninsured people and rely heavily on Medicaid revenues. By 2021, hospitals could see reductions in Medicaid funding of between 31 percent and 38 percent annually, or as much as $84.3 billion, under the plan compared with projected funding under current law. The reductions would come at a time when millions more people would lack coverage, increasing the potential demand for uncompensated hospital care.