Millions of people rely on Medicaid, the federal state health insurance program for the poor. President Trump and House Republicans want to scale back program eligibility to those most in need, saving taxpayers billions of dollars. By contrast, Democrats and the Hospital Industrial Complex want to expand it to the point it covers everyone, Medicaid for All.
Cutting Medicaid is a hard sell in many areas, even for Republicans in states with a high proportion of Medicaid beneficiaries. Hospitals lobby aggressively to keep the gravy train running. The Commonwealth Fund estimates The Big Beautiful Bill reduces Medicaid spending by $863 billion over 10 years and food stamps by $295 billion, resulting in 1.22 million job losses. Those figures should be taken with a grain of salt. Moreover, Medicaid and SNAP are not jobs programs. French economist, Frederic Bastiat, wrote about the Broken Windows Fallacy where he explained that spending on riot damage, such as replacing broken windows, does not stimulate beneficial economic activity. Excess spending on Medicaid is similar in that the benefits accrue to specific groups (hospitals, insurance companies and individuals saved from buying their own insurance) rather than benefiting society as a whole.
A talking point that emerged among opponents of changes to Medicaid is that nearly 8 million people (7.8 million) would lose health coverage. Th congressional Budget Office (CBO) analyzed potential losses of coverage and estimates that most of those would lose coverage because they do not meet work requirements. More from WSJ:
Of that 7.8 million, some 4.8 million are uninsured because they don’t comply with the bill’s part-time work requirement. This is a torpedo in the hull for the Democratic talking point that everyone on Medicaid already works. The bill asks able-bodied, prime-age adults without children to work or volunteer roughly 20 hours a week.
A recent report from the American Enterprise Institute is sobering: “For Medicaid recipients who do not report working, the most common activity after sleeping is watching television and playing video games. They spend 4.2 hours per day watching television and playing video games, or 125 hours during a 30-day month.”
Another 1.4 million of the uninsured, CBO says, “would be people who do not meet citizenship and immigration status requirements for Medicaid enrollment.”
The budget letter also says the 7.8 million figure includes 1.6 million who have access to other forms of subsidized coverage such as the ObamaCare exchanges.
Also noted by the CBO is that the Medicaid program will continue to grow by about $200 billion over 10 years even with the so-called cuts. In other words, Republicans are merely proposing to slow Medicaid’s growth rather than reverse it.
The Medicaid program was originally intended for poor people and low-income children. Refocusing Medicaid’s mission to better serve its core population would boost their access to care. It would hopefully encourage primary care through physicians’ offices rather than emergency rooms. In addition, much of Medicaid is now provided through managed care organizations (MCOs), who are paid per member regardless of whether members seek care. It is debatable whether cutting back eligibility will reduce needed care or merely reduce profits to MCOs.
Read more at WSJ: About Those ‘Millions’ Losing Medicaid