Administration’s Budget Proposal Includes $1.4 Trillion in Medicaid Cuts

Note that Medicaid pays for many people in nursing homes.

https://ccf.georgetown.edu/2018/02/12/administrations-budget-proposal-includes-1-4-trillion-in-medicaid-cuts/

February 12, 2018 Andy Schneider

The Administration today released a budget proposal for the fiscal year that starts on October 1 (FY 2019).

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We don’t even have a federal budget for the fiscal year that ends on September 30; once that gets sorted out (hopefully by March 23, the next drop dead date), that FY 2018 budget will likely be the placeholder (via a Continuing Resolution) for FY 2019 until after the mid-term elections on November 6.

There is an important reason to understand the Administration’s Medicaid FY 2019 budget proposal: it could well be back in play next spring. To get ready, here’s what you need to know.

The Administration is proposing to cap federal Medicaid payments to states and to cut federal Medicaid spending by $1.439 trillion – that is trillion with a “t” – over the ten year period 2019 – 2028. [1] That is about 26% of what the Administration projects federal Medicaid spending would otherwise be, and within shouting distance of the $1.455 trillion cost of the tax cuts enacted in December.

Of course, you wouldn’t know it from reading the Administration’s budget narrative.

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But let’s be clear: that’s just the opening bid. It assumes federal spending increases at the rate of the Consumer Price Index (CPI-U). Once a cap is in place, it can – and almost certainly will – be dialed down by future Congresses (CPI-U minus 0.5, CPI-U minus 1.0, etc.) to extract additional federal spending cuts at the expense of states and localities.

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