Democrats, moderate Republicans continue to mislead on Medicaid 'cuts.' Here are the facts

As Senate Republicans continue to push their plan to replace the Obama-era Affordable Care Act, a new hurdle has emerged as one of the primary objections to the plan, titled the Better Care Reconciliation Act: alleged “cuts” to Medicaid spending.

While conservative Sens. Ted Cruz (R-Texas), Rand Paul (R-Ky.), Ron Johnson (R-Wis.) and Mike Lee (R-Utah) have said they are unwilling to back the plan in its current form because it keeps too much of Obamacare in place, moderate Republicans like Sen. Susan Collins (Maine) have said they can’t support the proposal because the projected cuts to Medicaid would be too damaging for millions of Americans that rely on the program.

“That is going to cause a lot of harm, and that’s one of my biggest concerns about the bill,” Collins told CNN.

House Minority Leader Nancy Pelosi (D-Calif.) called the proposed Medicaid rollback “crushing.”

“The crushing Medicaid cuts will have an especially brutal impact on rural America, shuttering rural hospitals and an important source of good-paying jobs,” Pelosi said.

Critics from both parties point to a new score from the nonpartisan Congressional Budget Office that states the Senate’s bill would cut Medicaid spending by $772 billion over a decade compared to what spending is projected to be under current law as proof of the detrimental nature of the Republicans’ bill.

A closer look at the bill, however, reveals the Republicans’ “cuts” are not, in fact, cuts at all, but rather an attempt to slow Medicaid’s out-of-control growth.

The same CBO report often used to condemn the Republican bill also states Medicaid spending under their plan would increase from $393 billion in 2017 to $464 billion in 2026, an increase of 18 percent, as Fox News noted in a recent report.

Perhaps most disingenuous of all is the suggestion that reduced federal spending on state Medicaid programs is inherently immoral and will lead to impossible-to-fix state budgetary problems.

Under the provisions in the Senate’s bill, states would receive funding either on a per-person basis or as a block grant. States would determine how best to use that money and would prioritize the funds where they are needed most. Under the current system, the federal government pays for a large share of every Medicaid enrollee’s costs. Obamacare’s Medicaid expansion is particularly costly; the federal government pays for 90 percent of newly eligible enrollees under the ACA, effectively encouraging states to add as many people as they can to the Medicaid rolls. The Republican plan would incentivize states to create programs that discourage the use of social services and limit abuse, moving millions of people to self-sufficiency.

Nothing in the Republicans’ plan would prevent states from making cuts to other state programs or raising additional tax revenues to cover adding more people to their Medicaid programs. Many Democrats have alleged such a scheme is unworkable because states can’t afford to raise taxes, but relative to federal tax rates, state taxes are very low and the federal government is $20 trillion in debt, with much of that debt coming from programs such as Medicaid.

Conservative senators and analysts have said it’s easy for Democrats and moderate Republicans to point to CBO’s projections, which are almost never correct, and accuse Senate Republicans of ruthlessly slashing Medicaid funding, but the truth is the federal budget is growing at unsustainable levels because of programs like Medicaid and states can and should be responsible for their own social programs, allowing local communities of people to decide what government programs need to be prioritized.

For many conservatives, the BCRA doesn’t go nearly far enough in rolling back Medicaid and many other ACA policies.

“[The BCRA] cuts taxes,” Lee wrote in an opinion article on June 23. “It bails out insurance companies. It props up Obamacare through the next election. It lays out plans to slow Medicaid spending beginning in 2025, but that probably won’t happen. And it leaves in place the ham-fisted federal regulations that have driven up family health insurance premiums by 140 percent since Obamacare was implemented.”

“To win my vote, the Republican health care bill must create a little space for states and individuals to sidestep Washington’s arrogant incompetence, and see if they can do better,” Lee added.

“Recent history suggests they couldn’t possibly do worse,” Lee said.

Paul says he's concerned the bill could make the current health care situation even worse.

“When you mandate what you have to cover, you increase the price, you price out the young healthy people,” Paul said to CNN on Tuesday, “and the only people left in the insurance market get sicker and sicker. It’s what they call adverse selection.”

“My problem with the Senate bill as it currently exists is that we don’t fix that,” Paul said. "We keep 10 of 12 of the Obamacare regulations, we still keep the idea that you can buy it after you get sick, so I’m concerned that the death spiral of Obamacare may well even get worse with the Republican version.”