Romney-Ryan Plan Cuts Medicaid By $1.7 Trillion: Study

A new study underscores the far-reaching consequences of Mitt Romney’s plan to slash Medicaid spending and the stark contrast between the Republican candidate and President Obama’s vision for the program.

The analysis (PDF), released Tuesday by the Urban Institute for the Kaiser Family Foundation, finds that a Medicaid program modeled on vice presidential nominee Paul Ryan’s budget blueprint, would slash the program’s funding by $1.7 trillion over 10 years.

Romney has announced his support for Ryan’s budget, and has proposed, like Ryan, to turn the program over to the states and to cap its annual spending.The reforms would save $932 billion by repealing the Affordable Care Act’s Medicaid expansion, and an additional $810 billion by converting Medicaid into a block grant for states that grows annually at the rate of inflation plus 1 percent, the Urban Institute study found. Romney has cited it as one way he would seek to bridge the budget deficit.

By contrast, Obama’s plan under the Affordable Care Act would grow funding for Medicaid and expand eligibility to provide coverage to as many as 17 million more low-income Americans.

“The proposed changes and reductions in federal financing for Medicaid under the House Budget Plan would almost certainly worsen the problem of the uninsured and strain the nation’s safety net,” the study concluded. “Medicaid’s ability to continue these many roles in the health care system would be significantly compromised under this proposal, with no obvious alternative to take its place.”

The Urban Institute study serves as a reminder that even though Medicare has been the bigger flashpoint in the presidential election, the differences between the two candidates are much starker on Medicaid, which provides needed health care to low-income families and long-term care for the elderly and disabled.

Reelecting Obama would continue the implementation of the Affordable Care Act and its Medicaid expansion. Romney’s plan to repeal the law and further reduce Medicaid’s finances, while giving states unprecedented flexibility to reorganize it, would save money by endangering coverage for millions of Americans, according to the study.