Problems with Trump's Proposed Medicaid Cuts By Nicky Riordan

The Trump Administration doubled down today on early versions of a proposed budget for 2018 - a skinny budget that included unprecedented cuts to key foundations of the social safety net. Trump’s final budget appears to rely on a fundamental restructuring of Medicaid and cuts of more than $800 billion to the program over 10 years, even though this contradicts his own campaign promises and received criticism from moderate Senate Republicans. This shift toward Medicaid reflects endorsement of similar policy put forth in the American Health Care Act (AHCA) passed by the House.

The budget document outlines the potential for “per-capita caps” on Medicaid funding at the state level, also known as block grants. Recent history suggests that block granting entitlement programs makes them less effective. In the years since the Aid to Families with Dependent Children (AFDC) program underwent similar reforms in the 90’s, the federal funding level has lost one-third of its value due to failure to adjust for inflation, and states have used increased “flexibility” to funnel at least half of the funding for the program into other budget shortfalls at the expense of the families who need assistance.

Medicaid has played an important role in the social safety net for decades. The expansion of the program under the ACA helped reduce national bankruptcy rates, hospitalizations, and even mortality rates.

A focus of physicians and medical experts on the social determinants of health suggests that access to affordable and adequate health care at a young age can help to determine success later in life. Studies highlighted in the National Bureau of Economic Research show that “children eligible for Medicaid earn more as adults”, are more likely to complete college, and contribute enough in taxes over their lifetime to “recoup 56 cents of every dollar spent on Medicaid during childhood”.

Significant cuts to Medicaid will increase the need for other poverty relief programs such as the Supplemental Nutrition Assistance Program (SNAP), which is also on the chopping block for about a “quarter of the program’s 10-year funding”. A combination of funding cuts, state match qualifications, and increased work requirements for individuals on the program could be used to achieve this goal. SNAP, like Medicaid, has proven to promote positive outcomes on the success and future social contributions of its beneficiaries, and harmful cuts will only push vulnerable families deeper into poverty.

Early signals from moderate Congressional Republicans suggest that such proposals are non-starters despite that fact that many of them have been championed for years by mainstream politicians like Speaker of the House, Paul Ryan. Ryan's “Better Way” plan released last year argued that social programs are best left to the charitable private sector, a view that is commonly accepted by Republicans. Charitable giving is unstable and decreases among the most wealthy when the economy constricts; however, the very moments people are most in need

Congress has not typically passed budgets of late, instead agreeing on continuing resolutions, a pattern that will only be complicated by a president under tremendous political and legal scrutiny. This makes the fate of Trump’s budget proposal highly uncertain. Proponents of programs like Medicaid and SNAP should be concerned by the strong ideological overlap between Congress and this Administration and keep a close eye on the discussion as long as Republicans enjoy one-party control.

Nicky Riordan, Political Analyst, Utica College Center of Public Affairs and Election Research