What Paul Ryan's Medicaid cuts would do to your health care

by Robert I. Field, Ph.D., J.D., M.P.H.

What’s the biggest change Paul Ryan wants to make to American health care?

It isn’t his privatization plan for Medicare, as significant as that is. Ryan wants to make even bigger changes to Medicaid, the program that covers health care for the poor.

In fact, his proposed budget would cut almost twice as much from Medicaid as it would from Medicare.

Medicaid is administered separately by each state. The federal government sets overall rules for what must be covered and provides most of the funding, but the states do the heavy lifting in actually running it. 

Medicaid costs have recently risen dramatically. They pose a major fiscal burden for many states. For some of them, Medicaid is the largest single budget item, even with the federal government picking up most of the tab.

Under health reform, Medicaid will expand to cover more people. The federal government will pay most of the added expense, but some states fear the program will still be too expensive.

Ryan’s solution is to slash the program indiscriminately. He would cut over $1.4 billion in Medicaid spending over the next decade – a budget reduction of 34 percent.

And he would eliminate almost all federal rules on what must be covered. Medicaid would become a block grant program in which the federal government turns funds over to the states to use as they wish.

Needless to say, the Ryan cuts would make the Medicaid expansion under health reform impossible.

By most accounts, the result would be drastic.

The nonpartisan Congressional Budget Office predicts the Ryan plan would force states to reduce payments to providers (which are already very low), limit eligibility, provide less extensive coverage, or kick in more money themselves. Any of those outcomes could push the program to the breaking point.

The nonprofit Kaiser Family Foundation estimates that the Ryan plan would knock more than 30 million people off of Medicaid rolls.

You may wonder what this means for you. If you’re not poor, would you notice any difference?

The answer is that you would notice a huge difference. The cuts could cripple the entire health care system.

Medicaid is a financial lifeline for many hospitals, including most of those that serve inner cities. Without it, huge proportions of their patients would lack any means of payment. And without payment for their services, many of them would have no way to stay in business.

Where would the patients go? Many would go without care, creating a potential public health crisis. Others would seek care at the hospitals that remain, mostly those in more affluent areas. That could severely strain their resources and disrupt the health care systems of entire regions.

Ryan deserves credit for offering a specific plan to reform health care. None of his Republican colleagues have so far done so.

However, his proposal applies a sledgehammer to a complex problem. It would destroy a large portion of American health care in the name of saving it. And with it, the health and lives of countless people.