GOP nominees Mitt Romney and Paul Ryan have big plans for Medicare reform, as we’ve written about here often. But health plans and other stakeholders need to start paying attention to their plans for Medicaid, which are game-changing, would affect millions more Americans, and would take effect much sooner: a recent Bloomberg report found that Romney/Ryan’s changes to Medicaid would lead to an estimated $1.26 trillion drop in federal funding from 2014 through 2022. Other analyses estimated that 14-27 million Medicaid beneficiaries could lose coverage if the campaign’s promise to block-grant the program became reality.
If Romney becomes President in January, the potential consequences for our industry are both massive and uncertain. While he speaks daily to his intention to repeal the 2010 health-care law, he has spent less time talking about what policies he would replace it with. His campaign website, www.mittromney.com, lists 15 health-care proposals — some specific, others vague — which, taken together, would dramatically affect the business landscape, no matter what your politics may be.
Medicaid is the largest source of health coverage in America — covering 53 million people at a cost of about $457 billion a year, and needless to say covers the most vulnerable patients in the nation. Of those covered, around 24 million are in health plans, a number expected to double this decade. Its addition of as many as 16 million new Americans in the Affordable Care Act and moves by dozens of states to enroll dual eligibles in health plans also present the biggest opportunity for health plans since the launch of the Medicare drug benefit. The duals alone represent a bigger opportunity for health plans than the 16 million uninsured expected to enter health insurance exchanges in 2014. In the wake of the Supreme Court decision we think almost all states will eventually take the ACA’s Medicaid expansion money as a deal too good to pass up.
But if Romney and Ryan win, all bets are off. It’d take them years to unwind the ACA, even if the GOP retakes the Senate – but they could take a meat-axe to Medicaid much easier and quicker. Republicans would need a super-majority in the Senate to repeal the ACA, which they likely won’t have, even if they reclaim control of the upper body. But Medicaid can be gutted through budget reconciliation, which only requires simple majorities. And their cuts to the program would take effect almost immediately in 2013, as opposed to Ryan’s Medicare plan, which wouldn’t be effective for almost a decade.
Medicaid is an easy target for budget hawks. Providers and states alike hate it. While Romney and Ryan would have to face the music with colossus AARP to enact their Medicare vision, there is no National Association for Poor Folks, just a gaggle of underfunded nonprofits fighting for Medicaid, and its beneficiaries often don’t vote. But it remains the most important source of health insurance in America, and the biggest opportunity going in health insurance. Remember that while you’re “voting your wallet” in November.