The Department of Health and Human Services released an analysis estimating that 21 million Americans would lose Medicaid benefits under Speaker Kevin McCarthy’s budget plan.
The plan was released last week as McCarthy tries to engage the White House in negotiations over the debt ceiling. A failure of the two sides to reach an agreement over the debt ceiling would likely lead the U.S. to default for the first time ever.
McCarthy’s plan calls on Medicaid recipients ages 19-55 to perform 80 hours of “community engagement” a month. The bill defines community engagement as some combination of work, work programs, and volunteer commitments.
Americans physically or mentally unfit to work, pregnant, or giving care to a dependent child or an incapacitated person would be exempt under the bill’s current wording.
The Biden administration says that the bill’s reporting requirement would lead to millions losing Medicaid. The bill calls on states to verify Medicaid recipients are following the community engagement requirement.
“A State Medicaid agency shall, whenever possible, prioritize the utilization of existing databases or other verification measures, including the National Change of Address Database Maintained by the United States Postal Service, State health and human services agencies, payroll databases, or other reliable sources of information, prior to seeking additional verification from such individual,” the bill reads.
The Biden administration said this step would have “harmful effects” due to the “red tape.” The Department of Health and Human Services noted a Kaiser Family Foundation report that analyzed the effects of a similar requirement implemented in Arkansas. The report found that 18,000 Medicaid recipients were disenrolled while there was little measurable increase in employment.
“The dramatic effect on coverage raises concerns that extreme proposals to add such requirements across the U.S. would undermine the progress made during the Biden-Harris Administration to expand coverage and access to high-quality affordable health care,” the Department of Health and Human Services said.
The Biden administration says data indicates that 95% of Medicaid enrollees either already meet work requirements or would be exempt.
What is the GOP response?
McCarthy has said that the bill is not final but is being used to negotiate with Democrats. So far, the Biden administration has yet to engage with McCarthy on debt ceiling discussions.
The speaker said he expects the bill to pass this week. President Joe Biden has already vowed to veto it.
“This bill is to get us to the negotiating table,” McCarthy told reporters. “It's not the final provisions and there's a number of members that will vote for it going forward to say there are some concerns they have with it and that they'd be concerned about which things come up, but they want to make sure the negotiation goes forward because we are sitting at a $31 trillion in debt.”
The Congressional Budget Office estimated that the GOP bill would cut $4.8 trillion from the federal deficit between now and 2033. Within its analysis, the CBO says that cuts to Medicaid alone would result in $109 billion in reductions.
The Congressional Budget Office, however, says a far smaller number of Americans who would lose health care under the proposal. It says that about 1.5 million Americans would lose federal funding for Medicaid coverage. Of those, about 60% would remain on their states’ Medicaid program under state funding. The remaining 40% would become uninsured.
Who is eligible for Medicaid?
According to Medicaid, 82.5 millionAmericans use the program. Low-income families, qualified pregnant women, children, and individuals receiving Supplemental Security Income are automatically eligible for Medicaid.
Those making less than 133% of the federal poverty level also could be eligible for the program, depending on the state.
But millions are expected to lose Medicaid over the coming months. An analysis from the Kaiser Family Foundation says up to 14 million Americans could lose coverage because they no longer qualify or because they fail to go through the renewal process.
This is because at the pandemic's start, states were prohibited from kicking anyone off Medicaid. With the federal government ending the COVID-19 emergency, states can begin purging those who are ineligible.
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