(The Center Square) – More than 700,000 people in Michigan could lose Medicaid coverage if proposed federal budget cuts pass, according to a report ordered by Gov. Gretchen Whitmer.
Whitmer requested the report in mid-April, after the U.S. House passed a budget resolution the Congressional Budget Office estimated included $581 billion in Medicaid cuts.
The report was released early Wednesday.
“Medicaid provides a lifeline to 2.6 million Michiganders, and the huge, proposed cuts will terminate coverage for our neighbors, family, and friends who need it most,” Whitmer said in a statement. “More than 700,000 Michiganders, including people fighting cancer, seniors in nursing homes, new moms, veterans, kids and those living with disabilities could lose their health care. Michiganders will suffer because these proposed cuts go too far, too fast, and everyone, including those not on Medicaid, will end up paying more for insurance. Republicans in Congress cannot let this happen.”
More than 2.6 million Michiganders receive Medicaid coverage from more than 200,000 providers. Michigan’s annual Medicaid budget is $27.8 billion, with $19 billion coming from the federal government.
Michigan’s report said reducing federal matching Medicaid rates would eliminate 30% of the state’s beneficiaries and mean a $1.1 billion loss in the state’s budget.
It also said the cost to taxpayers to administer reporting requirements would be between $75 million and $155 million annually, while Michigan hospitals would lose $2.3 billion and nursing homes would be cut by $325 million.
The report added that changes to the per-capita block grant funding would lead to a loss of $4.1 billion to $13.4 billion over the next decade.
“Medicaid cuts proposed by Congress would decimate our Medicaid program – blowing a $2 billion hole in our budget,” Michigan State Budget Director Jen Flood said. “We don’t have the resources to fill a hole of that size without cutting access to health care, or cutting public safety, education, or services to veterans.”
As previously reported by The Center Square, taxpayers spend about $890 billion a year on Medicaid, with the federal government kicking in 75% of those dollars. States are responsible for the other 25%.
Some analysts say Medicaid cuts aren’t cuts, but rather a reduction in spending growth to 3% a year and believe savings can be found by ending payments to people they think should not be on the program and adding work requirements.
“The least vulnerable people on Medicaid fall into two groups: well-to-do seniors who artificially impoverish themselves to get Medicaid long-term care subsidies, and able-bodied, childless adults who enroll through Obamacare’s Medicaid expansion,” said Michael Cannon, director of health policy studies at the Cato Institute. “Reducing payments to those groups does nothing to jeopardize care for the most vulnerable…and would eliminate the current, perverse incentive for states to divert funds away from the most vulnerable enrollees and toward this less-vulnerable group.”
