House Republicans got some bad news about their 2012 budget proposal. According to an analysis by the Kaiser Family Foundation and the Urban Institute released this week, Medicaid would be “significantly compromised,” leaving the more than 44 million low-income and disabled Americans “with no obvious alternative to take its place.”
Currently, Medicaid is jointly funded by the federal government and the states, which operate their programs differently. The Republican plan, which was authored by Rep. Paul Ryan (R-Wisconsin), who chairs the Budget Committee, would convert the insurance program into a block grant that would provide each state with a fixed amount of money. Each state would then have more flexibility in how to spend it. And although the grant’s annual amount would increase at the rate of inflation, there is great concern that it won’t keep pace with the rising costs of healthcare.
According to the Joint Center for Political and Economic Studies, in 2005 Medicaid covered 38 percent of low-income African-American adults and 75 percent of African-American children from low-income families.
Many states already are struggling to balance budgets and maintain their Medicaid programs, which have been forced to cover millions more enrollees due to the recession. Under the Ryan plan, they would lose on average 34 percent of their federal Medicaid funding over the next decade, and eight would lose more than 40 percent. States would likely cap enrollment, scale back eligibility and curtail benefits to make up for the reductions, the report found.
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