Wait a Minute…Medicaid Reform Means Spending Less Money on Medicaid?


Whatever you do, don't call it a campaign speech. On Tuesday, President Obama gave a speech attacking House Republicans and the GOP Budget Committee Chairman, Paul Ryan, for doing something that the Senate, under the control of Democrats, haven't been able to do in more than 1,000 days: pass a budget.

President Obama described Ryan's budget, which according to the Congressional Budget Office wouldn't balance the federal books until 2039, as a "radical vision" and warned that "one of my potential opponents, Governor Romney, has said that he hoped a similar version of this plan from last year would be introduced as a bill on day one of his presidency" and joked about Romney's use of the word "marvelous" to describe Ryan's plan.

An election year extended attack on the other party's budget plan that explicitly ties the all-but-certain opposition nominee to its proposals? Most people would call that a campaign speech. But not the Obama White House—which, according to The Hill, "strongly denied that President Obama's attack on the GOP budget was a campaign speech." Instead, according to administration spokesperson Jay Carney, it was "a policy speech" that "had a lot of detail attached to it."

What he didn't say was that some of that detail was misleading, or just wrong.

Here, for example, is what the president said about the Ryan budget's proposed Medicaid overhaul:

The states can experiment.  They'll be able to run the programs a lot better.  But here's the deal the states would be getting.  They would have to be running these programs in the face of the largest cut to Medicaid that has ever been proposed—a cut that, according to one nonpartisan group, would take away health care for about 19 million Americans—19 million.

This makes it sound as if Ryan's budget would cut off health coverage for 19 million people immediately. But as Rep. Ryan notes on his Facebook page,* 19 million people is the number of people expected to be enrolled in Medicaid under ObamaCare in the years after 2014, when the major coverage expansions kick in.** [See update below.] So all that really means is that the Ryan budget would repeal ObamaCare, which for the last two years has remained more popular than letting the law stand.

And what about those giant cuts the states would face? Again, Obama's description makes it sound as if the Ryan plan would take a chainsaw to the Medicaid budget starting tomorrow at sunrise. In fact, even under the most pessimistic projections, the changes would take place over 10 years. Spending in 2014 would be held roughly to 2012 levels (about $256 billion)and then allowed to rise from there; the rise, however, would not be as fast as under the current baseline. So sure: It's true that over the next decade, the federal government would spend less on Medicaid under Ryan's plan than on its current trajectory. But that's the whole point.

Getting the federal budget under control means spending less than current projections forecast. In the long term, it mostly means getting federal health spending under control. Ryan's budget, which passed in the House, contains a number of proposals that would help start this process. Senate Democrats haven't shown any interest in passing anything that would even get it started. As for President Obama, well, I'll leave it to Timothy Geithner to explain the administration's position: "We don't have a definitive solution to our long term problem…we just don't like yours." But remember, this is all just policy, not politics. 

*It's the future, and this is apparently how these things work now.

Update: A emailer notes that Obama may be getting his 19 million figure from this Kaiser Foundation report, which on page five projects that by 2021 the block grant overhaul in the 2011 version of the House budget would result in Medicaid enrollment being reduced by about 19 million people in addition to those people who would no longer get coverage through ObamaCare. (According to the Center for Medicaid and Medicare Services, the new health law is also expected to increase Medicaid coverage by about 19 million individuals.) But even this is not as drastic a change as it sounds: Reducing Medicaid coverage to a little more than 39 million individuals, as Kaiser projects, would still only roll coverage totals back to roughly the levels they were at between 2002 and 2003. Given the massive problems with Medicaid both as a budget item and a medical benefit, it doesn't seem unreasonable to be wary of a program that consistently causes headaches for both taxpayers and patients.