The Congressional Budget Office (CBO) performed a cost estimate of Trumpcare not long before it’s current scoring data and they concluded the bill will result in an $880 billion cut to Medicaid (see page 6). The report also said 7 million more people will lose coverage under Medicaid as a result of this legislation (see page 2). Surely, this is an unwelcome outcome of the bill proponents must defend.
Tom Price is the head of the Department of Health and Human Services (HHS). He was on CNN with Jake Tapper to defend the bill, but his defense fell horribly short. Price told Tapper the $880 billion cut will “absolutely not” result in millions losing Medicaid coverage. Quite frankly, this seems like a baffling position. It turns out that it is, indeed, baffling and inaccurate.
Here is how he argued:
Well, remember what the $880 billion is off of. It’s off what is called a baseline, which is what the federal government, what the Congressional Budget Office says we would spend if we just continued current law. The fact of the matter is that Medicaid spending under the proposal and under the budget goes up every single year. And it goes up by a factor that is great — that is equal to the cost of medical care.
Baseline projections calculate what it would take to maintain current services. These projections account for things like inflation and population growth. Price seems to depute the baseline set by the CBO.
Inflation is a significant part of this calculation. Price tries to assure the public by saying “Medicaid spending under the proposal and under the budget goes up every single year.” This statement gives the impression that more money will be being spent on Medicaid thereby strengthening it. Price left out a crucial piece of information. Today’s dollar doesn’t have the purchasing power of yesterday’s dollar. The amount of money you spend must outpace inflation in order to have a greater effect in the future.
We all know things aren’t as cheap as they used to be. Shoes, pizza, cars, and especially houses cost more due to inflation. The same goes for medical expenses. Everyone knows medical costs are rising at an alarming rate. It is not enough to spend more money. We have to fund Medicaid at a level that outpaces inflation.
It seems the CBO is right. More people, in this case 7 million, will lose Medicaid. Here is how FactCheck.org puts it:
Price claimed that federal spending on Medicaid would increase “every single year” under the GOP bill and the annual increases would be “equal to the cost of medical care.” But federal funding would not increase every year, and Medicaid costs will exceed the inflation rate for medical costs, forcing states to make Medicaid cuts, according to the Congressional Budget Office.
… In fact, the bill does not increase Medicaid spending “every single year,” and the program’s costs will exceed the inflation rate for medical costs, forcing states to make cuts in Medicaid benefits, according to the CBO. (CBO estimated the original legislation would reduce Medicaid outlays by $880 billion, the figure both Tapper and Price use. But after amendments were added to the bill, CBO in late March put the reduction at $839 billion over 10 years.)
The bill is a disaster and no amount of spin can free us from its grips.