Republicans offer this impossible choice: Tax cuts or senior care

Cuts to Medicaid, particularly, and even to Medicare, are integral to offsetting huge tax cuts before Congress. These safety net cuts — which would heavily fall upon seniors — are framed in the guise of “saving” the programs or giving states “flexibility.” 

According to the latest Congressional Budget Office report, spending on Medicaid rose just 2 percent in fiscal 2017, which ended Sept. 30. 

{mosads}The $6 billion increase in federal outlays for Medicaid in fiscal 2017 can be compared to as much as $8.5 billion in federal revenue to be lost in the first year alone from a new estate tax break. Analysis shows this would only benefit the wealthiest 0.2 percent of estates. And yet Senate Finance Committee Chairman Orrin Hatch (R-Utah) writes it is Medicaid that “is bankrupting both state and federal governments.”

Some policymakers try to confuse the rate of growth in Medicaid spending under the ACA’s Medicaid expansion with growth in the program predating that expansion. Huge cuts are rosily-described so as not to alarm.

For example, an Oct. 31 House Budget Committee document has the Orwellian headline “Sustaining Medicare and Medicaid.” Perhaps only in Washington, D.C. would a $473 billion cut to Medicare be called “sustaining.” And a Budget Committee FAQ posted online airily states that “[t]he Medicaid proposals in the budget put America’s most vulnerable first” — an explanation hard to reconcile with over $1 trillion in Medicaid cuts.  

For all the talk in Washington, D.C. of “block grants” and “per-capita caps” giving Medicaid control to the states, the states already control Medicaid. The federal government only matches what states are willing to spend. Thus, according to a 2016 federal actuarial report, “from 2011 through 2015, long-term care expenditures decreased at an average rate of 0.8 percent per year[.]” Not bad when you consider that over that same four-year period, the cost of employer-sponsored health insurance went up 15 percent for private employers, according to federal data. 

So where is the real problem, policymakers?

Medicaid isn’t out-of-control. Texas, which never expanded Medicaid under the ACA, has cut traditional Medicaid so severely that children with special needs — even the need for assistance in eating without gagging — have lost therapy.

The two-year Texas budget adopted this year cut Medicaid by $1.9 billion, a huge federal savings in matching funds. Even with cuts, and failing to “fund either medical inflation or services demands,” the nonpartisan, business-backed Texas Taxpayers and Research Association estimates Texas may have dug itself a $2 billion hole by relying upon federal money that may not come. There just isn’t room for even conservative states like Texas to do more with less, as congressional Republicans would propose.

Furthermore, state Medicaid cuts are occurring under an existing federal matching system while our nation is in a period of steady, if patchy, economic growth.

Medicaid is generally first on the chopping block in periods of economic downturn or recession. Under such circumstances, limiting an infusion of federal resources would add to the economic calamity states would face, because Medicaid primarily goes to wages and, currently, each state dollar spent draws no less than a federal matching dollar. Not only does Medicaid sustain vital care, it is classic economic stimulus.

Our nation already has a massive federal debt. Congressional Republicans have inextricably linked the future of vulnerable Americans to the success, or failure, of their tax cut proposals in growing the nation’s economy. Assuming deficits increase, which seems certain, federal Medicaid and Medicare cuts will inexorably worsen as a means to offset the lost revenue. This approach must be rejected. 

Brendan Williams is the president/CEO of the New Hampshire Health Care Association.