In a tweet on June 28, President Donald trump accused the Democrats of misstating Medicaid purposely under the new Senate Bill. He claimed the amount of Medicaid financing under the Better Care Reconciliation Act actually hikes spending.
The Washington Post reviewed Medicaid allocation by the federal government if there would be no change made to the current law and changes under the Senate bill. It found an increase in spending, however, it would be at a much slower rate under the current law.
Democrats purposely misstated Medicaid under new Senate bill - actually goes up. pic.twitter.com/necCt4K6UH
— Donald J. Trump (@realDonaldTrump) June 28, 2017
Raw dollar increase
When it comes to the number of dollars allocated, there would be an increase in Medicaid spending by $71 billion between $464 billion planned spending in 2026 and $393 billion in 2016.
Trump’s figures, however, failed to provide a complete picture because, under the Senate bill, federal government spending on Medicaid in the future years will be reduced significantly compared to projections if there would be no change in the current law.
If the current law is not changed by 2026, there would be 15 million fewer Medicaid enrollees. Under Obamacare, the Medicaid expansion extended health insurance coverage up to 14 million more people.
Inflation excluded
In reality, there would be cuts in Medicaid, contrary to Trump’s campaign promise there would be no reduction. The cut would be through inflation which means even if people’s wages go up, the faster pace of price increases would eat up whatever salary hike workers would get.
The Washington Post pointed out that if the Senate bill would be written on the date of Trump’s tweet becomes law, over the next decade, federal spending on Medicaid would actually be reduced by $772 billion. It is based on an estimate of the nonpartisan Congressional Budget Office.
On Thursday the CBO updated its estimate of Medicaid spending.
The CBO said it would go down by 35 percent by 2036, compared to the current law. It estimated an overall growth of 5.1 per annum in Medicaid spending during the next 20 years, partly because of expected increase in the price of medical services.
The result would be under the Senate bill, spending would grow at 1.9 percent annually until 2026.
After that, Medicaid spending would grow 3.5 percent per year for the next 10 years.
The CBO explained that because it lacks an insurance coverage baseline beyond the next 10 years, it could not quantify the impact of the Senate bill on insurance coverage over the longer term. The CBO, however, anticipate a drop in Medicaid enrollment after 2026 “relative to what would happen under the extended baseline.”
