January 19,2017

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Taylor Harvey (202) 224-4515 

Finance Democrats Ask Governors About Impact of Massive Cuts to Medicaid

Proposed Republican Plans Would Put All States in Budget Crunch, Force Benefit Cuts or Loss of Coverage

WASHINGTON Senate Finance Committee Ranking Member Ron Wyden, D-Ore., along with every Democratic member of the Committee, today sent a letter to all governors, Republican and Democrat, asking for feedback on the expected impact of Republican proposals to block grant or cap Medicaid, which would result in substantial cuts to federal funding for the program, harming low-income children and families, individuals with disabilities, and seniors, including those benefiting from nursing home coverage.

“We are concerned by numerous proposals and statements suggesting plans to radically restructure Medicaid’s financing system, resulting in huge permanent cost shifts to states and threatening access to critical health care services for tens of millions of low-income children and families, seniors, and individuals with disabilities,” the senators wrote.  “Recognizing the importance of the state-federal partnership in the administration of the Medicaid program, we appreciate your feedback in informing federal policymakers on the impacts of these types of proposals on state Medicaid programs and budgets.”

The letter comes as Republican senators and governors convene in a partisan, closed-door meeting to discuss potential ways to change the Medicaid program through regulation or legislation. Proposals such as block grants and per capita caps, as proposed by congressional Republicans, would drastically alter Medicaid’s current financing structure and result in large cuts to federal funding for state Medicaid programs. Medicaid, along with CHIP, provides coverage to one in three children, pays for nearly half of all births nationwide, is the primary payer of long-term care helping to pay for two out of three seniors in nursing homes, serves as the single largest source of public funding for family planning services, and is the nation’s largest single payer for all mental health and substance use disorder services.

According to estimates, states would see a reduction in federal funding of almost $170 billion in the tenth year of the plan—a 33 percent cut to state Medicaid budgets. Those reductions are on top of the potential repeal of the Affordable Care Act and its Medicaid expansion, which significantly increased access to the program. These cuts, totaling nearly two trillion dollars over the next ten years, will necessarily result in some combination of reduced benefits, increased cost-sharing for everyday health care needs, and the elimination of health coverage for millions of Americans who count on the program.

The letter was signed by Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and Senators Debbie Stabenow, D-Mich., Maria Cantwell, D-Wash., Bill Nelson, D-Fla., Robert Menendez, D-N.J., Thomas R. Carper, D-Del., Ben Cardin, D-Md., Sherrod Brown, D-Ohio, Michael F. Bennet, D-Colo., Robert P. Casey Jr., D-Penn., Mark R. Warner, D-Va., and Claire McCaskill, D-Mo.