President Donald Trump and Republicans in Congress are contemplating budget cuts that, in their current form, would almost certainly slash spending on Medicaid, the health insurance program that covers care for people with low incomes.
That would be bad news for Oregonians, one-third of whom receive their health care under the Medicaid-funded Oregon Health Plan.
And for months now, the news has been filled with alarming scenarios and heated rhetoric concerning this high-stakes battle. Opposition is growing. What follows is an attempt to make sense of things, by parsing through national coverage supplemented by additional reporting. We’re including links for more information.
How big will the cuts be?
Nobody knows — yet.
Congressional Republicans have issued goals for how deep they want to cut the federal budget to fund an extension of tax cuts.
But there’s a long way to go before they craft an actual federal budget — and they’d still have to shepherd the package through a divided Congress.
It could be a “months-long process,” as The 19th points out.
In fact, it could be many months, since there is no deadline for the federal budget to be passed. The new fiscal year starts Oct. 1, but there’s no requirement that a new budget be passed by then, according to FiscalNote.
In Washington state, lawmakers are already preparing for a special session to deal with federal cuts that won’t happen until after they stop meeting this year.
Similarly, in Oregon, lawmakers haven’t had anything specific to respond to. That won’t happen until the federal budget is approved. But many of them are tracking what’s happening in Washington, D.C.
State Rep. Rob Nosse, a Portland Democrat who chairs the Oregon House Behavioral Health and Health Care Committee, wrote in a recent newsletter that “Medicaid remains at the center of everything particularly for me, with 1.4 million Oregonians relying on the program.”
How many people will be affected by Medicaid cuts?
Again, nobody knows. The U.S. House of Representatives narrowly passed a budget resolution last month on a mostly party-line 217-215 vote that set a goal of cutting government spending by $2 trillion over the next 10 years.
The resolution does not explicitly call out Medicaid. However, the resolution directs the congressional committee that oversees health programs to reduce spending by $880 billion.
That wouldn’t leave a lot of options other than major cuts to Medicaid. But no specific cuts or budget proposals have been released. The estimates released so far rely on a variety of assumptions.
Generally speaking, the cuts being discussed could force hospitals to close and put a “very severe strain” on state health care programs, Katherine Hempstead, a Robert Wood Johnson Foundation researcher who worked on a study of one aspect of the potential cuts with the Urban Institute think tank, told The Lund Report.
As reported by States Newsroom, Congressional Democrats issued a report last week that said more than 25 million Americans would lose their coverage if Republicans carried out all the options they are considering, including 3 million people in rural areas and 40% of children nationwide.
What could it mean for Oregon if these cuts take place?
Like most states, Oregon relies heavily on federal funds for its Medicaid program. But it has a higher rate of Medicaid enrollment than most states, making it more vulnerable to cuts.
Gov Tina Kotek’s proposed budget calls for spending $29.2 billion on the state’s Medicaid program over the next two years, 30% of which would come from state funds.
Based on just one of the potential cuts — reversing the Affordable Care Act’s expansion of Medicaid eligibility in 2014 — Oregon could see one of the biggest reductions in enrollment in the country, according to an analysis by health care think tank KFF. An estimated 639,000 Oregonians enrolled in Medicaid could lose their health care — nearly half the people covered by the program — if state officials did not make up for the loss of federal funding.
Not only that but Republicans are looking at cutting or eliminating the hospital and provider tax that Oregon relies on more than most any other state to fund the Oregon Health Plan, the state’s version of Medicaid. Losing the tax would cost Oregon more than $500 million a year, according to OPB.
The Trump administration has also sparked alarm with its plan to block federal funding around gender-affirming care coverage such as that mandated in Oregon. Republicans in Washington, D.C. are also considering steps to effectively punish states that provide free care to people regardless of their immigration status by reducing funding — even if, as in Oregon, officials don't use federal funds to do that.
The analysis by Congressional Democrats found that 57,000 rural residents in Oregon would lose their coverage, in addition to 110,000 children.
Figures presented to a legislative committee last month show that the state’s most rural counties in southern and central Oregon have the highest Medicaid enrollment. Half of residents of sparsely populated Malheur County are covered by the program, the highest in the state, followed by Jefferson and Josephine counties.
An analysis by The New York Times found that large stretches of rural America rely on Medicaid where voters are represented by Republicans in Congress.
So what’s going to happen?
Again, nobody knows. A push to cut Medicaid and roll back the Affordable Care Act in 2017 stalled narrowly. In 2020 a separate push to cut the hospital and provider taxes that fund Medicaid in most states also stalled in the face of opposition, including from Republican governors.
Lately, Republicans in Congress have sent mixed messages on the Medicaid cuts, saying they only want to cut fraud.
Speaker Mike Johnson told CNN that Republicans don’t want to cut the program and accused Democrats of “lying about it.”
After taking office in January, Trump said we’ll “love and cherish” Social Security, Medicare and Medicaid, Politico reported. He pledged not to cut Medicaid except for instances of fraud. But he also praised the Republican plan, that, if it comes to pass, would mean major cuts.
U.S. Rep. Cliff Bentz, Oregon’s sole congressional Republican, told OPB’s Think Out Loud that “if Oregonians are kicked off the plan, it’s because they don’t deserve to be on it,” adding that “When I say deserve, for whatever reason, they are fraudulently participating or they’re participating for reasons that have nothing to do with the original goals of the program.”
The public supports Medicaid. Republicans, including Trump voters, have said in polling they support Medicaid, though they want people receiving it to get jobs.
House Republican leaders struggled to win over more moderate members worried that cuts outlined by a budget resolution last month would cut Medicaid, reported CNN.
Critics say Republicans are using “loaded” terms to win over the public instead of debating the details of the cuts, according to reporting by KFF Health News.
Democrats are already targeting Republicans representing large populations covered by Medicaid over their vote for the resolution that framed large health care cuts, including to Medicaid.
The final measure still needs to pass the House and Senate, and it’s possible some House Republicans will balk as the cuts are detailed.
Potential opponents include Republican governors as well as hospitals, insurance companies, nursing homes and doctors.
So if I understand this correctly, the $880 billion proposed cut being talked about is a cut in the $2 trillion increase over the next 10 years? A cut from the 8-9% annual increase to a 2-3% annual increase. How is that a cut? Is it not a cut to the proposed increase rather than a cut? If there is supposedly $500 billion in annual fraud, waste and increase, which if I do the math right if even one half of this could be eliminated over ten years would be $2.5 trillion which would mean no cuts. I wonder how much in the Oregon Health Plan is fraud, waste and abuse, let alone the entire state budget? Is it not about priorities we may not like rather than the sky is falling? Or is that just for theater to cause Oregonians to be afraid to prevent a discussion around what things should take priority over others?
Mike Shirtcliff DMD