Major flaws exposed in U.S. House Republicans’ healthcare plan

For Immediate Release
March 16, 2017

Contact:
Alex Rossman
arossman@mlpp.org
517-487-5436

League, federal analysis show that plan will eliminate health coverage for 24 million people, cut $880 billion from Medicaid and shift costs to state

LANSING—Congressional Republicans’ plans for Medicaid funding will hobble Michigan’s budget and jeopardize healthcare for at least 2.5 million state residents according to a new fact sheet, Medicaid block grants and per capita caps are bad for Michigan’s health, released by the Michigan League for Public Policy today. This analysis comes on the heels of the Congressional Budget Office’s (CBO) report this week that showed the House Republicans’ health plan to replace the Affordable Care Act (ACA) will ultimately result in a drastic increase in the number of uninsured in the country and substantial cuts to federal Medicaid funding.

“The Affordable Care Act was a groundbreaking policy that significantly reduced the number of uninsured in Michigan and improved people’s health,” said Gilda Z. Jacobs, president and CEO of the Michigan League for Public Policy. “On the other hand, the House Republicans’ alternative plan is an absolute disaster. It will result in 24 million people losing health insurance, cut $880 billion from Medicaid, and stifle state Medicaid funding through per capita caps. The only people who will benefit from it are wealthy individuals who will get tax breaks while our residents, our small business owners and our hospitals all suffer.”

The CBO estimates that the House Republican health plan would cause 24 million people nationwide to lose insurance coverage by 2026, including 14 million people next year. The plan will slash federal Medicaid spending by $880 billion and gives $600 billion in tax cuts primarily to the wealthiest Americans while raising premiums for millions of consumers. Additional analysis on the plan is available from the Center on Budget and Policy Priorities.

“The Affordable Care Act and the related Healthy Michigan Plan have been vital in reducing our state’s uninsured rate and have provided health coverage for millions of residents,” Jacobs said. “The governor supports the Healthy Michigan Plan and it was created with bipartisan support, but putting per capita caps on or block granting our state’s Medicaid funding will put this highly successful program at risk.”

The House Republicans’ current healthcare plan will put per capita caps on federal Medicaid funding for the states, giving Michigan and other states a fixed amount of money per Medicaid enrollee. Other Republican healthcare proposals have proposed distributing Medicaid funding through block grants where the federal government would send each state a specific amount of funding to support the entirety of the Medicaid program.

Using per capita caps or block grants to distribute federal Medicaid funding will limit the amount of federal funding that states receive, shifting costs and risk to states, hurting local economies, and putting quality coverage for seniors, people with disabilities and families with kids at risk. This shift could result in a significant financial strain on state budgets, forcing Michigan lawmakers to limit spending on Medicaid by reducing the number of people it covers or cutting other vital state programs including education, public safety or infrastructure.

The League has been a major supporter of the ACA since its inception, particularly the expansion of Medicaid through the Healthy Michigan Plan that currently insures 650,000 state residents with low incomes. The League put together a fact sheet on the ACA’s tangible benefits for Michigan residents, businesses, hospitals and our state economy.

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The Michigan League for Public Policy, www.mlpp.org, is a nonprofit policy institute focused on economic opportunity for all. It is the only state-level organization that addresses poverty in a comprehensive way.