The House Republican Budget Resolution includes both the President’s proposal to block grant the Medicaid program as well as $95 billion in cuts to the Medicaid and CHIP Programs over ten years. The cuts to these programs will actually be much deeper as a result of the lost state matching revenue. A $93 billion cut to federal Medicaid funding equates to a $163 billion cut in total program spending once the loss in state matching funds is taken into account. The Republican Budget Resolution proposals are unsustainable and will decimate the health insurance safety net for more than 50 million American families. Assuming cuts are taken proportionate to states’ share of total spending under these programs, the top five losers under this proposal are New York ($12.7 billion), California ($9.7 billion), Texas ($5.6 billion), Pennsylvania ($4.4 billion), and Florida ($4.0 billion).

Republican Budget Cuts Would Decimate Coverage for Seniors, Disabled, Children, Pregnant Women, and Infants. Cutting $93 billion in Medicaid could mean cutting off almost two years of nursing home care (under the Congressional Budget Office’s 2003 baseline). The SCHIP program is only $50 billion of spending over the next ten years, eliminating CHIP entirely would only achieve about half of the needed cuts.

Many American children would be at risk of losing access to their doctors. The cuts in the Republican Budget Resolution could keep many American children from receiving needed vaccinations which are covered under the Vaccines For Children (VFC) program under Medicaid. It will keep many American children with devastating illnesses and injuries from treatment in hospitals that are dedicated to taking care of children.

Quality nursing home care for our senior citizens who rely on Medicaid for that care will be threatened by this budget.

Republican Budget Resolution Cuts Risk Decimating Existing Drug Coverage While Under-funding a Medicare Drug Benefit. At the same time the Republican budget is severely underfunding a prescription drug benefit to seniors in Medicare, the budget also places at risk existing prescription drug coverage for low-income seniors under Medicaid. For example, it would require elimination of all drug coverage under Medicaid for three years (according to CBO) -- for seniors, disabled, pregnant women and children -- in order to achieve the magnitude of cuts required in the Republican budget resolution.

Republican Budget Jeopardizes Coverage for Veterans and Families of American Soldiers. The Republican Budget Resolution cuts Veterans’ benefits and health care by $28.3 billion. The budget cuts appropriated programs for veterans below the level needed to maintain purchasing power at the 2003 enacted level by $14.2 billion over the next ten years and then cuts another $14.6 billion out of other Veterans’ benefits. In addition, many of the men and women called up from the Reserves who are no longer able to provide income for their families will have spouses and children who will now need to rely on Medicaid and CHIP coverage at the very time the Republicans are proposing to cut this coverage.

Republican Medicaid Block Grant Proposal Jeopardizes Coverage for Most Vulnerable: Seniors and Disabled. Two-thirds of all Medicaid spending would be capped under the Budget Resolution for care that is primarily for elderly and disabled Americans. The federal commitment to help states would be capped at a time when we know more and more seniors and disabled are going to require assistance from Medicaid. Medicaid pays for more than half of all long term care in this country.

Republican Budget Resolution Provides No Fiscal Relief for States. States are facing record budget deficits of upwards of $80 billion in the coming year. Almost every state has already been forced to make cuts to Medicaid and CHIP. Rather than providing immediate fiscal relief to preserve existing health insurance coverage, the Republican budget resolution merely provides an upfront loan (only $3.25 billion next year) that states would be required to pay back in later years, at a time when need for Medicaid will be increasing as baby boomers age and require more nursing home and long term care. In addition, the only way states could get this money is if they agree to place a cap on 2/3 of program spending for items like prescription drugs and home care and for vulnerable beneficiaries like individuals with disabilities and elderly in nursing homes.

Republican Budget Cuts are Almost Double Cuts from 1997 and are Not Realistic. In 1997, the Committee on Energy and Commerce made significant cuts to Medicaid, that equaled approximately half the cuts in the proposed Budget Resolution. The 1997 BBA cut $14.6 billion out of Medicaid over five years; $56.4 billion over ten. It was very difficult then; a cut of almost twice that amount now is not realistic.

The 1997 cuts came from: repeal of Boren Amendment: savings of $1.2 billion over five; $6.9 billion over ten; eliminating cost-based reimbursement to FQHCs: savings of $0.3 billion over five; $1.3 billion over ten; charging Medicaid payment rates for Medicare cost-sharing for QMBs and dual-eligibles: savings of $5.0 billion over five; $12.6 billion over ten; treatment of Veterans' Pensions; counted as income for Medicaid eligibility: savings of $0.1 billion over five years; $0.2 billion over ten years; and reforming DSH payments: savings of $10.4 billion over five; $40.4 billion over ten.

Eliminating Fraud, Waste, and Abuse Not Likely to Yield Significant Savings. In 1997 eliminating waste, fraud, and abuse only generated savings of less than $50 million over five years; less than $50 million over ten years. We understand that some are proposing to require the $93 billion in cuts to come from waste, fraud and abuse. Given the difficulty the Committee had in 1997 achieving significant savings from this area, it is unlikely that we would have much success this time.

House Republican Budget Medicaid Cuts Opposed By Scores of Groups. Numerous organizations have written letters of opposition to the Medicaid cuts in the House Republican Budget Resolution, including: AARP, American Hospital Association, Democratic Governors Association, American Academy of Pediatrics, American Association of People With Disabilities, Alzheimer’s Association, Family Voices, Amerigroup HMO, National Association of Community Health Centers, United Cerebral Palsy, American Association of Home Care, Families USA, etc. Many of these same groups have also written letters opposing the President’s Medicaid Block Grant proposal that is also in the House Republican Budget Resolution.