The Wonk Room

Rep. Virginia Foxx Suggests It’s Better To Be Uninsured Than On Medicaid

During this afternoon’s Rules Committee hearing to determine which amendments would be introduced during floor debate of the House health care bill, Rep. Virginia Foxx (R-NC) suggested that it’s better to be uninsured than enrolled in the government’s Medicaid program. “I want to ask you if you know that Medicaid patients visit the emergency room at twice the rate of uninsured patients in this country,” she said. “More government paid insurance is going to increase the number of people going to the emergency rooms.”

Rep. Jim McGovern (D-MA) responded, “I thank the gentlelady for making the case for keeping more people in this country uninsured. And I guess if that’s the Republican position, then fine”:

MCGOVERN: If you don’t have insurance then you have no choice but to go to the emergency room. But what we’re also trying to do is to put in place kind of a system, as Mr. Rangel said, that encourage prevention, and preventative care, so that people can actually not get sick and not end up in emergency rooms. So if you want to make the case that more and more people in this country should be uninsured, fine. I just disagree with you.

Watch the exchange:

“I’m making the case that your bill doesn’t insure anywhere near what our bill does, and I think that is unacceptable and is wrong in this country,” McGovern said, hinting that under the Republican alternative, the number of uninsured Americans would increase to 52 million by 2019.

Rep. Frank Pallone (D-NJ) explained that “one of the things that this bill does is make major increase in the reimbursement rate so that it gets up to the Medicare level, and even beyond, and that means that doctors will now take these Medicaid patients, they’ll get primary care, they’ll get to see a doctor on a regular basis and they won’t go to the emergency room.”

Christina Romer To Governors: Health Reform Will Produce Net Savings Of $83 Billion For Your States

Governors are worried that the proposed expansion of Medicaid — the most efficient way to cover lower income Americans — would strain local budgets and force states to “either raise taxes or make further cuts to state budgets.”

But today, in a speech delivered today at the Center for American Progress, Christina Romer, the chairwoman of President Obama’s Council of Economic Advisers (CEA), stressed that the savings from health reform would outweigh the costs of Medicaid expansion:

Indeed, we believe our measured expenditures are a reasonable estimate of the actual savings, even taking into account that reform will not eliminate all uncompensated care. This is true because we are virtually certain that there is a substantial amount of state and local spending on care for the uninsured that we have not yet identified. Expanding our projections to all fifty states and the District of Columbia implies savings of roughly $116 billion to state and local governments between 2014 and 2019.

For example, CBO estimates that under the Senate Finance Committee proposal, states will spend about $33 billion on increased Medicaid and the Children’s Health Insurance Program (CHIP) over the same 2014-2019 period. Even taking account of this cost, there is therefore a net savings to state and local governments of some $83 billion over six years. When you consider that we are paying for all of the Federal expenditures with other savings and revenue increases, this is $83 billion of additional government saving.

In other words, expanding Medicaid is cheaper than paying for the same population in the emergency room. Recent CEA research of health care spending in 16 states found that those states are spending “at least $4.2 billion on care for the uninsured each year.” “We estimated that they are spending another $600 million on higher insurance premiums for state and local government employees because of the hidden tax uncompensated care adds to all private insurance premiums. All told, the states in our sample are spending at least $4.2 billion on care for the uninsured each year.”

“Health care reform that expands insurance coverage will greatly reduce these state and local expenditures for uncompensated care,” Romer predicted.

Baucus: Medicaid Expansion Will Not ‘Cost States Nearly As Much As Was Originally Feared’

Advocates of Medicaid expansion — a program that is financed with state and federal funds — are running into one major problem: how to pay for the expansion without shifting too much cost to the states. “For many members of Congress, as well as for governors and state legislators around the country, Medicaid expansion is even more important than issues like the “public option” or illegal immigrants that have tended to get far more publicity,” the New York Times reports. Sens. Dianne Feinstein (D-CA) and Olympia Snowe (R-ME) have expressed concerns about shifting the costs of the expansion to the states and the Senate Finance Committee has been grappling with the issue.

Today, Senate Finance Committee Chairman Max Baucus (D-MT) hinted that he has worked out a deal in which “the Medicaid costs with expansion are not going to cost states nearly as much as was originally feared.” The Committee is hoping to expand the program to all Americans below 133% of the federal poverty level (FPL) and cover approximately 1/3 of the uninsured:

That’s based on the interaction of lots of other programs too including rebates, drug rebates, which is more expansive, more generous to states compared to current law. I think the changes in the SCHIP program also help states. On that basis, states are going to be pleasantly surprised. There is going to be some additional cost but much less than they originally expected.

Watch it:

So what will the final expansion look like? Below is a table comparing the provisions in the House bill and Baucus’ reform framework:

Under current law, states are required to cover pregnant women and to children under age 6 from families with income under 133% FPL and children 6-18 from families with income below the poverty line. Only 7 states provide Medicaid coverage for low-income childless adults and only 16 states (plus DC) offer parents coverage at 100 percent of the federal poverty level (FPL). In 43 states, adults without dependent children “are ineligible for Medicaid no matter how low their income.”

Despite its flaws, Medicaid provides comprehensive coverage to children, the poor, and the disabled and many policy makers believe that health reform should build on this foundation. As Families USA points out, “Medicaid is cost-effective compared to private health insurance” and offers services that the private insurance market does not. “For example, Medicaid covers transportation to doctors’ appointments, services that help people with disabilities, and services provided at rural and community health centers.”

How The GOP Budget Misdiagnoses America’s Health Care Crisis

The Republican approach to reforming the health care system is based on the idea that skyrocketing health care costs are the result of government intervention in the insurance market:

But many reformers have misdiagnosed the root cause of these problems. It is not a failure of the market, but the ways the market has been distorted largely due to government policies and programs. They have undermined the doctor-patient relationship and removed the individual patient from the decision-making process.

It’s unclear how Medicare and Medicaid are undermining the “doctor-patient” relationship — patients can chose any physician who accepts Medicare or Medicaid and doctors have full discretion over treatment decisions — or that these programs are solely responsible for escalating costs.

In fact, blaming “government” for the fiscal crisis ignores the fact that private health care spending grows at the same rate as public spending:

The GOP budget argues that “government spending tends to be less efficient than spending in the market,” but that too doesn’t square with the facts. A range of studies demonstrate that Medicare’s lower administrative costs, ability to bargain for lower prices, and lack of profit margin allow it to “provide a given level of benefits for less than they would cost through private insurance.”

The public Medicare plan’s administrative overhead costs are “in the range of 3 percent.” The overhead costs of large companies that self-insure is 5 to 10 percent of premiums), companies in the small group market spend 25 to 27 percent of premiums, and individual insurance spends 40 percent of premiums on administration. According to the Congressional Budget Office (CBO), “administrative costs under the public Medicare plan are less than 2 percent of expenditures, compared with approximately 11 percent of spending by private plans under Medicare Advantage.” In fact, a recent General Accounting Office report found that “in 2006 Medicare Advantage plans spent 83.3 percent of their revenue on medical expenses, with 10.1 percent going to non-medical expenses and 6.6 percent to profits—a 16.7 percent administrative share.”

Medicare and Medicaid spending cannot be addressed without restructuring the entire health care system — reforming payment mechanisms, getting everyone into the system, coordinating care etc. Republicans, however, are simply kicking the can down the road. While their Medicare proposal would privatize the Medicare system, their plan to reform Medicaid could leave the poorest and neediest Americans without coverage.

The Republican budget would ‘modernize’ the Medicaid benefit by “converting the Federal share of the Medicaid payment for acute care services into an allotment tailored for each state’s low-income population, indexed for inflation and population growth.” “The reform enhances State flexibility and States’ sensitivity to spending growth,” the budget claims.

In other words, if the GOP has its way, the government would select a base year for spending on acute expenditures, grow that portion by indexing it to inflation and population growth, and promise to match state spending up to that amount. (Under the current system, the federal government reimburses the states without limit). But several problems arise:

1. Will the government index to general population growth or the growth in low income Americans? During an economic down-turn, as more Americans become eligible for Medicaid, won’t states would be forced to limit eligibility or cut benefits?

2. What happens to beneficiaries if the state uses up all of the allotted federal dollars?

3. The budget only deals with acute spending and ignores the much more expensive long-term care. In other words, the Republicans are simply kicking the can down the road.

4. How exactly will this enhance “state flexibility?” The Federal government requires states to cover certain services and people, but states have a good amount of discretion in deciding how much to spend on the program. Given that some states are particularly stingy when it comes to Medicaid benefits, what does “more options” mean? Can states kick people with disabilities off of the Medicaid rolls?

Senators Propose To Cut Health Care Provisions From Stimulus

“Anxious over the ballooning size of the proposed economic stimulus package,” Sen. Ben Nelson (D-NE) and Sen. Susan Collins (R-ME) have banded together to identify spending that they believe should be cut. But the below health provisions (all rumored to be on the chopping block) would create health care jobs, allow research facilities to hire more researchers, and lay the foundation for future economic growth.

As Dean Waldman has suggested, “Health is infrastructure. Health care is the maintenance and repair service for this key element of our productive capacity. As a nation we need to treat the health of our people just like repaving a road – as an investment in our future.”

Joe Scarborough: Federal Medicaid Funding Rewards Bad Behavior

This morning, as part of the on-going conservative campaign to cherry-pick and oppose isolated parts of the stimulus package, MSNBC’s Joe Scarborough went a step too far, arguing that extending federal funds to cover states’ Medicaid shortfalls “bails out states that haven’t made tough decisions”:

You brought up, for instance, Medicaid. What this spending does is it bails out states that haven’t made tough decisions. The Governors and the state legislators who were responsible aren’t going to be getting as much of the Medicaid money.

Watch it:

Scarborough’s attempt to apply the conservative dogma of ‘responsibility’ and ‘fiscal disciple’ to state Medicaid shortfalls is both confounding and cold-hearted. As Morning Joe guest and TIME columnist Joe Klein asked, “what are these tough decisions Joe? Is it a tough decision to deny treatment to somebody? I think a lot of people need medical care right now.”

Currently, 44 states are budget shortfalls and many are “scrambling for months to cut aid to schools, universities and, increasingly, residents who rely on the state for medical care.” Meanwhile, the economic crisis is making people sicker and increasing the rolls of the uninsured, forcing many Americans to rely on state-sponsored safety-net programs like Medicaid and SCHIP. Growing health costs are “the primary driver of the fiscal challenges facing the state and local sector over the long term” and according to the Kaiser Family Foundation, a 1 percent expansion in unemployment results in 1 million more people enrolling in Medicaid and SCHIP and increases state spending by $1.4 billion.

Far from rewarding bad behavior, giving states federal dollars to plug their budget holes: 1) allows states to keep up with growing enrollments 2) injects more money into the health care system 3) ensures that states aren’t forced to increase taxes or cut other essential services.

But Scarborough is a traditional knee-jerk ideologue, attempting to fit his square ideology into the round peg of today’s economic crisis.

Grassley Worries Governors Could Use Medicaid Funds To ‘Mask Poor Decisions’

As Pat Garofalo points out in today’s Progress Report, most conservatives have been attacking the stimulus on the premise that its initiatives “may be worthy in themselves, but have little to do with ’stimulating’ the economy.” Yesterday, for instance, Republican strategist Jennifer Millerwise Dyck suggested that boosting funding to Medicaid would not create jobs and should not be part of the Democrats’ economic stimulus package.

Today, Sen. Charles Grassley (R-IA), the ranking Republican on the Senate Finance Committee, said he could “buy into 90 percent” of the emerging plan but “opposes the nearly $90 billion in aid to states for Medicaid because some governors would use the money to mask poor decisions in other portions of their budgets.”

But allowing sates to plug their budget holes with federal funds is sort of the point. While Medicaid is one of the largest drains on every state’s budget, giving governors some latitude to use the funds balance the budget, keeps the government running and reduces other painful cuts in essential services or tax increases.

Stimulus Watch: More Federal Spending On Health Care Will Create Jobs

Just as the New York Times reported that “Medicaid rolls are surging, by unprecedented rates in some states,” Republican strategist Jennifer Millerwise Dyck appeared on MSNBC this afternoon to argue that extra federal funding for health care initiatives (expanding Medicaid, subsidizing COBRA) would not create jobs and should not be part of the Democrats’ economic stimulus package:

There is money in there getting us prepared for universal health care. I mean, this is supposed to be a stimulus package that gets people into jobs, that gets the economy moving, gets money back into the pockets of the people and I think this is ideologically where you see a real difference between Republicans.

Watch it:

In fact, investing federal dollars in Medicaid, as House Democrats have proposed, is far from an “ideological divide”; it actually generates business and “gets people into jobs.”

A recent report by Families USA, for instance, found that “every dollar a state spends on Medicaid pulls new federal dollars into the state—dollars that would not otherwise flow into the state. These new dollars pass from one person to another in successive rounds of spending”:

For example, health care employees spend part of their salaries on groceries, which adds to the income of grocery store employees, enabling them to spend part of their salaries on new shoes, which enables shoe store employees to spend additional money on home improvements, and so on. The new dollars pass from one person to another in successive rounds of spending, generating additional business activity, jobs, and wages that would not otherwise be produced. Economists call this the “multiplier effect.” The magnitude of the multiplier effect varies from state to state, depending on how the dollars are spent and on the economic structure of, and conditions in, the state.

Moreover, health insurance protects families from medical bankruptcy and allows healthy individuals to keep looking for employment.

REPORT: Low Medicare And Medicaid Reimbursement Rates Shift Costs To Private Payers

A coalition of health providers — AHIP, American Hospital Association, BlueCross BlueShield Association, Premera — released a new report today arguing that “annual health care spending for an average family of four is $1,788 higher that it would be if Medicare, Medicaid and private employers paid hospitals and physicians similar rates, with total provider reimbursement unchanged.”

In short, Medicare and Medicaid don’t pay enough for services, causing private insurers providers to shift the uncompensated costs to private premiums private payers. The cost shift from public to private payers is $88.8 billion, or 15% of the current amount spent by commercial payers on hospitals and physician services, they argue:

Rather directly advocating for a $90 billion government infusion to close the gap, the groups suggested that the government should subsidize the shortfall and implement pay-for-performance reforms and comparative effectiveness research in any comprehensive health care reform effort. “Tomorrow’s system has to be more economical,” Karen Ignagni — the CEO of AHIP — explained.

Point well taken. While Medicare and Medicaid underpay for some services, one-third of all health care spending — $700 billion — is spent on tests and treatments that do nothing to improve health outcomes. Cost-containment measures like comparative effectiveness research and coordinated care should help reduce wasteful spending, lower costs and improve quality.

But more importantly, the report can be interpreted as an industry effort to influence the forthcoming health care reform. While AHIP has agreed to offer insurance to every American, if everyone were required to purchase coverage, the group is trying to stave-off competition from a new Medicare-like program, which would force private insurers to compete with a more efficient public model and eat into profits.

As Ezra Klein found during his interview with AHIP, insurers oppose any such competition:

Ezra: And let me ask you about another thing that you often see in here. A lot of folks argue that one way to bring costs down would be to inject competition through a public insurance option. How would AHIP respond on that?

AHIP: We do not support that type of approach. You know, our members provide a variety of coverage options to meet the individual needs of consumers. And we think that that approach, where there’s a public option where they got to set the rules when competing with private companies, that would not achieve the type of goals on improving coverage and improving access, and making healthcare coverage more affordable. So we think that we need to get everybody in the healthcare system and that we can do that by building on what’s currently working in our system.

As Richard Umbdenstock, the President and CEO of the American Hospital Association pointed out during the press conference, the report’s backers support reform but “if it’s through a new government program that underpays, it would exacerbate the problem, that would not be good.” Expect some opponents of comprehensive reform to argue that providing a new public option or expanding Medicaid and Medicare would force doctors out of business and limit patient choice.

Bush Admin Issues New Medicaid Rule That Forces Struggling Americans To Pay More For Health Care

As rising unemployment swells Medicaid rolls, the Bush administration issues a new federal rule that would allow states to “deny care or coverage to Medicaid beneficiaries who do not pay their premiums or their share of the cost for a particular item or service.”

In what the New York Times describes as a “sea change” in Medicaid, states will now “charge premiums and higher co-payments for doctors’ services, hospital care and prescription drugs provided to low-income people under Medicaid“:

The administration acknowledged that ’some individuals may choose to delay or forgo care rather than pay their cost-sharing obligations’…The Congressional Budget Office has estimated that 13 million low-income people, about a fifth of Medicaid recipients, will face new or higher co-payments. Most of the savings result from “decreased use of services,” it said.

Rather than the Bush administration’s approach of forcing poor Americans to pay more for health care during an economic crisis, the federal government should increase FMAP — the percentage the federal government reimburses states for Medicaid — and expand the program to allow more Americans to buy affordable health coverage.

Growing health costs are now “the primary driver of the fiscal challenges facing the state and local sector over the long term.” At least 27 states are facing budget gaps and most are simultaneously experiencing an increase in Medicaid enrollment. A survey by the Kaiser Foundation concluded that “Medicaid enrollment across the country grew 2.1 percent in fiscal year 2008″ and “states expect to see even larger increases in Medicaid enrollment and spending” in fiscal year 2009.

But as more Americans are relying on government safety net programs for health care — or forgoing care altogether — the Bush administration is banking on “reduced use of services” and co-payments to help recipients become “more educated and efficient health care consumers.”

Stimulus Watch: Lame Duck Congress ‘Unlikely’ To Approve Extra Medicaid Funding

Last week, Congressional Quarterly reported that a “broad-based stimulus favored by Democrats” that includes additional federal Medicaid funds for states “seems highly unlikely” to pass this week during a lame-duck session of Congress” and would have to wait until next year.

According to Roll Call, Republicans would likely object to Sen. Harry Reid’s (D-NV) request for unanimous consent on a stimulus package. In the House, “any stimulus package that reaches the floor would include additional federal Medicaid funds for states, although the increase would remain small in an effort to prevent a veto by President Bush.”

This blog has pointed out, however, that growing unemployment has translated into an increase in Medicaid enrollment, straining state budgets across the country.

In fact, according to a new Government Accountability Organization report, absent policy changes, “state and local governments would face an increasing gap between receipts and expenditures in the coming years“:

Growing health costs are “the primary driver of the fiscal challenges facing the state and local sector over the long term”:

Stimulus Watch: The Importance Of FMAP Increase

Today, during a House Commerce and Energy Subcommittee on Health hearing, CAPAF Senior Fellow Gene Sperling, Gov. Janet Napalitano (D-AZ), Rep. Frank Pallone (D-NJ), and Rep. Gene Green (D-TX) unanimously called for increasing the percentage the federal government reimburses states for Medicaid expenditures. These Federal Medical Assistance Percentages (FMAP) are based on a sliding scale and states with lower personal incomes have higher FMAPs.

As the Wonk Room has argued, helping states finance their Medicaid programs makes sense in the context of a souring economy and massive job losses. At least 27 states are facing budget gaps and most are simultaneously experiencing an increase in Medicaid enrollment. In fact, research indicates that a 1 percent increase in unemployment results in 1 million more people enrolling in Medicaid and SCHIP and another 1.1 million more people becoming uninsured. In Arizona alone, as Napalitano pointed out, Medicaid enrollment grew by 13,000 more applicants in October:

States can’t borrow money and they must balance their budgets. So how do they deal with increasing demand during a period of decreasing revenue? As Gene Sperling pointed out, “FMAP allows states to expand Medicaid enrollment without requiring other contractionary policies and has one of the highest multiplier effects of any form of economic stimulus”:

A 2004 study by Families USA found that a 2.95 percent increase in the FMAP rate would bring a return of $3.85 million in business activity for every $1 million in Medicaid investment, a multiplier of 385 percent.

An increase of $35-50 billion dollars allows states to: 1) keep up with growing enrollments 2) injects more money into the health care system 3) ensures that states aren’t forced to increase taxes or make cuts elsewhere.

In fact, in 2003, during another period when Medicaid enrollment and spending growth peaked, Congress provided a 2.95 percent FMAP increase, helping states meet Medicaid and overall state budget shortfalls and warding off potentially larger Medicaid program cuts. States used the extra cash to preserve Medicaid:

The Center for Budget and Policy Priorities (CBPP) finds that “17 states have cut or are considering cuts to low income child and family health care programs and at least 15 states are cutting care for the elderly and those with disabilities.” Without federal assistance — specifically increasing FMAP within the second stimulus — those numbers will only grow in the coming months.

Bush Cuts Outpatient Medicaid Services

After arguing that legislation to cut over-payments to private insurers would “harm beneficiaries by taking private health plan options away from them,” President Bush, on Friday, “narrowed the scope of services that can be provided to poor people under Medicaid’s outpatient hospital benefit.”

The new regulation arrives at a time when states are considering limiting Medicaid eligibility and Americans are losing their employer health benefits. In fact, the administration issued its rule to take public “health options away” on the very same day that the Department of Labor announced that the U.S. unemployment rate is at a 14-year high of 6.5 percent.

“Public hospitals and state officials immediately protested the action, saying it would reduce Medicaid payments to many hospitals at a time of growing need,” the New York Times reports. Ann Clemency Kohler, the executive director of the National Association of State Medicaid Directors, said:

The new rule is a pretty sweeping change from longtime Medicaid policy. Since the beginning of the program, states have been allowed to define hospital outpatient services. We have to question why the rule is being issued now, three days after the election, with a new administration coming in.

Bush’s last-minute effort to deny public health care benefits to millions of Americans squares with his health care legacy, however. As recently as February 2008, Bush proposed cutting Medicaid by $18.2 billion over five years, essentially “shifting costs to the states” and forcing “states to institute even bigger program cuts or tax increases,” according to the Center for Budget and Policy Priorities (CBPP). In January of 2008, the Bush administration imposed restrictions on the “ability of states to expand eligibility for Medicaid, in an effort to prevent them from offering coverage to families of modest incomes.”

Stimulus Watch: Increasing Medicaid Reimbursement Percentages

New Labor Department data indicate that U.S. companies cut 240,000 jobs in October, bringing the nation’s unemployment rate to 6.5 percent, the highest since March 1994:

Since August, the economy has lost 651,000 jobs — more than three times as many were lost from May to July. So far, 1.2 million jobs have been lost this year.

“The latest signs of distress seemed certain to inject more urgency into the debate over another round of government stimulus to spur spending,” the New York Times reports. “Democratic leaders in the House suggested this week that they might seek swift passage of $60 billion worth of measures that would extend unemployment benefits and food stamps, while aiding states whose tax revenues have plummeted.”

The point is this: a 1 percent increase in unemployment results in 1 million more people enrolling in Medicaid and SCHIP and another 1.1 million more people becoming uninsured. If the downturn economy requires government assistance, then helping states afford Medicaid sounds like a good place to start.

Brian Rosman is suggesting that the stimulus bill should also include an increase in the percentage the federal government reimburses states for Medicaid expenditures. As Rosman explains, “it’s based on a sliding scale, with the richer states, like Massachusetts, getting the minimum reimbursement, 50%… States like West Virgina and and Mississippi get around 75 cents back.”

Easing the pressure on state budgets to prevent states from cutting back Medicaid eligibility rules makes sense in the context of a souring economy and massive job losses. In fact, state governments and average Americans are both struggling to to keep up with increasing health care costs. Currently, at least 27 states are facing budget gaps and some have already slashed safety-net programs (Medicaid consumes an average 17 percent of state budgets).

Simultaneously “about 80 percent of Americans say they fear the ongoing global financial meltdown might affect their ability to pay their medical bills” and 47 percent of the public “reports someone in their family skipping pills, postponing or cutting back on medical care that they needed in the past year due to the cost of care.”

McCain’s Medicaid Cuts: $738 Billion Over 10 Years

The recent economic downturn is forcing states to “scale back safety-net health-coverage programs,” USA Today is reporting. Medicaid, which eats up 17 percent of state budgets is on the chopping block and millions of low-income adults and children are in danger of losing their health insurance.

Sen. John McCain’s solution is to push even more people off the rolls. As the Wonk Room reported, McCain recently proposed cutting $1.3 trillion from Medicare and Medicaid to plug the $1.3 trillion funding gap in his budget-neutral health care plan. And while the campaign has argued that McCain will make up the shortfall by finding trillions of dollars worth of “savings,” most observers disagree.

CAPAF’s very own Peter Harbage, for instance, who conducted the initial analysis of the effects of McCain’s cuts on both Medicare and Medicaid had released a new report documenting the consequences of McCain’s proposed “savings.”

According to Harbage, “the only way for Sen. McCain to achieve his goal is to slow Medicaid growth to 5.5 percent per year –well below what is would take to maintain enrollment growth and match the rising costs of medical care.” To accomplish this, McCain would have to lock in federal spending limits “through so called block grants, which deliver federal funds according to pre-set budget limits rather than on a needs basis, as is now the case.”

In other words, as unemployment creeps up and more Americans lose their health insurance (a 1 percent increase in unemployment resulted in 1 million more people enrolling in Medicaid and SCHIP and another 1.1 million more people uninsured), the federal government will sit on its hands, offering no extra Medicaid funding. Here are the consequences of McCain’s one-size-fits all block grant:

- Total program cut of $738 billion over 10 years

- 29 states could lose more than $5 billion in federal Medicaid spending over 10 years

- Every state could see a reduction of more than $1 billion in total Medicaid spending (federal and state) over 10 years

By limiting average annual growth to 5.5 percent — compared to the estimated 5.9 percent growth rate needed to keep up with medical inflation and Medicaid enrollment growth, states will have to make cutbacks in “program, eligibility and benefits or both.”