The largest Medicaid cup on the left for the republicans of the house would reach red states

For months, Republicans have tried to understand how to reduce Medicaid spending to help promulgate the domestic day of President Trump. But their list of possible cuts shrinks.

Chamber president Mike Johnson said on Tuesday that major reductions in the Medicaid expansion of the affordable care law was outside the table. From now on, the largest reduction in their balance sheet options would disproportionately harm the States that supported Trump in the 2024 elections.

The Republicans have also studied several other Medicaid changes for their budgetary bill, and a final package will likely include some of the smallest adjustments. But they only examined two main political routes which can deliver most of the $ 880 billion in expense discounts that the Chamber Committee supervising Medicaid was responsible for concluding.

A policy would considerably reduce the financing of the back for the expansion of Obamacare Medicaid, which, according to the Congressional Budget Office, would save $ 710 billion over a decade. Some of the deepest cuts would be felt by rich states led by Democrats. This was the option that Johnson has yet excluded after meeting moderate republican members this week.

The large drop in the table, limiting the way states use a tax escape to increase federal spending on Medicaid, would save $ 668 billion, mainly by reducing Medicaid spending in poorer southern states.

The states that are the hardest affected would be the most difficult to deal with large budgetary gaps, and compensate for some could abandon Medicaid health insurance coverage for some of their low -income adults, reduce hospital payments or reduce other government priorities.

The final package probably needs one of the two large cuts to achieve the budgetary objectives of the Republicans.

“The title number of federal expenses reduction is similar, but everything else is extremely different,” said Morgan Henderson, health economist at the Hilltop Institute of the University of Maryland-Baltimore County, who analyzed the republican proposals of Medicaid.

At the heart of the difference is the Medicaid financing system for patient invoices. The federal government covers a larger share of medical costs for patients in poor states. It gives less money to richer states that can better support Medicaid with their own taxes.

In New York, this correspondence rate is 50% and money is divided uniformly. In Mississippi, the rate is 77% and the federal government pays approximately three dollars for each dollar state funding.

The federal government gives all states an exceptionally generous pairing rate for anyone who registers thanks to the expansion of Obamacare Medicaid. For these registrants, Washington covers 90% of costs.

The Johnson option has abandoned

The first republican policy option, reducing the financing of the expansion of Obamacare Medicaid, would reduce the correspondence by 90% to all that is normally a state of the federal government. This would strike richer and more democratic states in two ways: they are more likely to participate in the expansion of Medicaid, and they have lower correspondence rates.

An analysis of the Urban Institute, a group for reflection on liberal policy, believes that California, New York and Washington are among the places that would see the most steep cuts within the framework of this plan.

The 10 states that do not participate in the expansion of Medicaid, most of them with republican governors, would have no effect. But not all red states would be spared: North Dakota, for example, has a robust natural gas industry which makes it a rich state; It has a low correspondence rate and expanded Medicaid.

These factors and a few others mean that he could lose around 19% of his federal Medicaid funds if the congress takes this path.

The alternative version that is still alive

Johnson went from changes to the correspondence of the expansion of Medicaid on Tuesday afternoon after having met moderate Republicans – many of which represent districts of the States led by Democrats.

However, he suggested that it was open to a similar but less deep policy which would completely eliminate the pairing system for the expansion population and would replace it with a fixed payment to the States for each registration.

The CBO estimates that such a change would generate around $ 225 billion in savings over a decade. Over time, however, this could lead to higher funding reductions than what would occur as part of the correspondence rate change, because payment is designed to increase more slowly than the cost of health care.

The large cut on the table

The second large option, closing the fault of medical providers, would end a system in which states can use hospital tax revenue and nursing homes to artificially inflate their Medicaid expenses, allowing them to collect more counterpart funds from the federal government.

These policies tend to take into account a large part of the Medicaid budget in poor states, where each dollar they spend on the program are equaled or three times by the federal government.

“The incentives to use the service providers in these states are really important,” said John Holahan, a scholarship holder from the Urban Institute who has studied taxes on Medicaid suppliers for decades.

There are four southern states – South Carolina, Mississippi, Alabama and Tennessee – which probably have the most at the way the Cup Cup Medicaid.

If the legislators put an end to the exemption from the tax on the supplier, these states could lose 30% of their Federal Medicaid funding, according to an analysis of Mr. Henderson and his colleagues. They would have a gaping hole in their state budgets and may have to consider increasing taxes or reducing benefits.

(North Carolina, a swing state which voted for President Trump and which has a democratic governor, can also undergo great effects, that the analysis does not capture; the state has widened Medicaid, and progressed in a significant supplier tax, shortly after the period of measurement used to crunch the figures.)

At least some states would face major budgetary holes

The way states would react to one or the other type of cut would probably vary. Some may reduce payments to medical providers, increase taxes or reduce other state services to compensate for the deficit. Some could reduce registration in Medicaid by abandoning the optional populations: twelve states that have expanded Medicaid have laws which oblige them to automatically lower expansion if the rate of correspondence decreases or to officially study the question.

The reason why the CBO expects these policies to save as much money is that analysts assume that states will choose a mixture of these reactions, some of which, such as the inversion of Medicaid expansion, will reduce federal expenses even more than direct cut.

“You are not only going to say:” Provider taxes have disappeared, we will cut him from hospitals, “said Alice Middleton, acting executive director of Hilltop, who previously worked at the Federal Agency who supervises Medicaid.” You will have to try to fill these holes in different ways and start to be creative. You look at everything. “