Conservatives Aim to Cut Medicaid Costs

Conservatives want to address the size and cost of Medicaid, Axios reported Monday.

Obamacare, also known as the Patient Protection and Affordable Care Act, dubbed ACA, expanded eligibility for able-bodied, working-age adults and offered states extra money to do so, according to critics.

That drove up Medicaid cost costs that are contributing to federal deficits.

Axios reported that conservative groups such as the Republican Study Committee, the Paragon Health Institute, and the Heritage Foundation want to turn Medicaid into block grants, impose work requirements, or reduce the federal share of program costs for states where coverage has been extended.

Former Trump administration economic adviser Brian Blasé has co-written a Paragon paper, titled "Medicaid Financing Reform," which proposes reducing Medicaid’s federal reimbursement for expansion enrollees and lowering the Federal Medical Assistance Percentage floor for wealthy states to improve equity and save federal funds.

Only households below the federal poverty level could still qualify for Medicaid under the plan. People above the poverty level would instead be eligible for tax credits to buy coverage on Obamacare exchanges.

The plan would phase out the 90% federal share of Medicaid costs for the Obamacare expansion population, giving states the same federal funding for all enrollees.

The federal government would save between about $252 billion and $530 billion over eight years under the Paragon plan, depending on how states responded.

States, which would see an increase by at least $110 billion over that time, could cut benefits or enrollment.

A total of 40 states currently have expanded programs.

The Paragon plan is a contrast to Heritage's Project 2025, which would cap the federal Medicaid funding available to states, Axios reported.

Medicaid now costs more than $800 billion annually, with the federal government footing about 70% of the bill.

Former President Donald Trump, the Republican presidential nominee, has not said what he plans to do with Medicaid if he wins another White House term. He has pledged not to touch Medicare or Social Security.

During his administration, Trump backed an ACA repeal bill that called for $880 billion in cuts to Medicaid.

As of April, nearly 75 million people were enrolled in Medicaid.

In May, the Biden administration announced that roughly 100,000 immigrants who were brought to the U.S. as children are expected to enroll in Obamacare next year.

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