As Toomey targets Medicaid spending, some Republicans worry plans go too far

WASHINGTON — When the House passed its health-care overhaul this month, most Republicans from the Philadelphia area objected to its sharp cuts to Medicaid and the impact they expected on Pennsylvania and New Jersey residents.

But Pennsylvania’s Pat Toomey doesn't think the measure goes far enough.

The fiscal hawk is at the center of the Senate GOP’s negotiations on Medicaid, pushing for changes that would squeeze its budget even more by reining in the growth of one of the government’s most expensive and politically fraught programs.

“Medicaid is growing at an unsustainable pace,” Toomey said, noting that it is expanding faster than the economy. “If we’re going to overhaul this program, which we need to by virtue of Obamacare, we can at least put it on a sustainable path.”

His stand, backed by Senate conservatives, is running into fierce opposition -- and not just from Democrats like Gov. Wolf and Sen. Bob Casey.

Some Senate Republicans who, like Toomey, represent states that have expanded Medicaid to millions of new beneficiaries under the Affordable Care Act are also pushing back against the belt-tightening. They say it could undercut a program that provides health coverage to the poor, disabled, and children, including 4.4 million in Pennsylvania and New Jersey.

“Those working families in your state -- those conservative working families that voted for Toomey and Trump -- will no longer have coverage,” said Sen. Bill Cassidy (R., La.).

Cassidy, a physician, came to a Philadelphia banquet hall to campaign for Toomey’s reelection last year, working to keep Republican control of the Senate and put them in position to deliver on their promise to roll back Obamacare.

But Cassidy and a handful of other Republicans now stand on the opposite side of what Toomey called a “vigorous” internal debate over how to address one of the biggest pieces of the health law, one that has found support in red and blue states alike.

So far, it’s been a stalemate, and a major stumbling block to the GOP repeal effort. Toomey said Wednesday that there was little progress on a compromise. 

“I don't know how we get to 50 [votes] at the moment. But that’s the goal,” Senate Majority Leader Mitch McConnell told Reuters last week. With 52 Republicans in the Senate, he has little margin for error.

McConnell has made Toomey one of the point men on Medicaid talks as the Senate tries to draft its own bill.

Toomey is among 20 Republican senators who represent states that expanded Medicaid under the Affordable Care Act. Several, from places including Colorado, Ohio, and West Virginia, have argued for less sharp reductions.

Liberals are furious that Toomey has not joined them. They point to the more than 700,000 Pennsylvanians and 550,000 New Jerseyans who have gained health coverage through the law.

“Normally when your home-state senator is playing a key role, you expect the interests of your state to be protected,” said Marc Stier, director of the left-leaning Pennsylvania Budget and Policy Center. 

At issue is a program that covers more than 70 million people nationally and that is expected to cost $389 billion this fiscal year, among the largest slices in the budget.

The House bill would cut Medicaid spending by $834 billion over the next decade and reduce expected enrollment by 14 million, according to the Congressional Budget Office.

There are two major ways the plan makes cuts.

The first targets the Medicaid expansion allowed under former President Barack Obama’s health law, which let states offer Medicaid to adults earning up to 138 percent of the federal poverty level, with the federal government covering nearly all the cost. Thirty-one states and the District of Columbia took advantage.

Starting in 2020, Republicans want the federal support to match what it pays for traditional Medicaid recipients -- 57 percent on average, though slightly less in New Jersey and Pennsylvania -- down from the 90 percent planned under the law.

That shift would cost Pennsylvania more than $3.7 billion per year starting in 2020, according to the Wolf administration. Gov. Christie has said the expansion has saved his state billions since it began. If such cuts come to pass, according to analysts, Democrats, and some Republicans, cash-strapped states would be forced to reduce benefits, limit eligibility, or raise taxes to make up the difference.

Toomey argues that that’s their choice. 

“What they’re saying is: Their state governments would decide that it’s not worth it to us to have these people on Medicaid when we can buy it at 43 cents on the dollar,” Toomey said in an interview. “That’s a decision that they’re free to make, but to suggest that the federal government is being unreasonable when we’re offering to pay more than half of the cost of an expansion that we didn’t support in the first place, I’m sorry, I just disagree.”

He said he might support making the cut more gradual, but overall argued in favor of the reduction, saying Medicaid spending has to be curtailed to check the federal deficit, projected at $559 billion this fiscal year. The program’s price tag is now equal to 2 percent of gross domestic product, a measure of the economy, up from 1.2 percent in 2000, his office said.

And it’s expected to keep growing far faster than the economy, said Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget.

“We can’t really afford to ignore Medicaid’s cost growth,” if lawmakers want to tackle the federal debt, Goldwein said, though he did not take a stand on Toomey’s proposal.

Toomey would take another House provision and make it even more strict.

He would tighten proposed caps on Medicaid spending by using a less generous measure of inflation for adjusting those limits every year. (Currently the program is open-ended, so spending rises with costs and enrollment.)

Stier, citing CBO inflation projections, estimated that by 2026 such a change would cost Pennsylvania more than $2 billion a year in federal support, though Toomey’s office cast doubt on the CBO figures.

Cassidy argued that such a strict cap would leave states hamstrung in the face of a boom in health-care costs brought on, perhaps, by developments like the AIDS epidemic or opioid crisis.

He spoke Wednesday just outside one of the regular lunches where Senate Republicans gather to hash out their plans. Toomey was already inside. At that moment, a solution seemed no closer.

Staff writer Don Sapatkin contributed to this article.