http://www.investors.com/politics/editorials/despite-what-youve-heard-the-senate-bill-doesnt-slash-gut-or-even-cut-medicaid/
Entitlements: Shreds. Guts. Slashes. Eviscerates. Imperils. Look at any story about the Senate health bill, and you'll see words like those describe its supposed cuts to Medicaid. What if we told you there are no such cuts?
First, the Senate bill doesn't change Medicaid at all for three years. That means spending on the program will continue to grow, just as it is slated to now - at an annual 5% clip - until 2021.
What does that mean in dollar terms? Under the Senate's "shredding" reform, Medicaid's budget in 2021 will be $85 billion bigger than it is this year, and $209 billion (or 79%) bigger than it was in 2013.
What about after that? Under the Senate plan, there'd be a three-year transition to a new way of financing Medicaid.
And then, starting in 2025 federal Medicaid spending would be capped each year, with the cap set to grow at the overall inflation rate.
If you plot annual spending out over the next 10 years, what you see is that spending is never actually cut - at least not in the sense that most people think of a spending cut. Instead, it would grow at a slightly slower rate.
Even under the more restrictive House bill, Medicaid's budget would still climb 20% over the next decade. So growth will end up higher still under the more generous Senate version.
It's true that Medicaid will have to change. But that will be better for everyone.
Currently, Medicaid is an open-ended entitlement, with the federal government matching state spending by at least dollar for dollar.
This way of paying for Medicaid is hugely flawed, because it encourages states to overspend - since for every dollar they put into the program, they get at least another dollar from the federal government - and ignore waste, fraud and abuse.
As a result, Medicaid now consumes about 20% of state general fund spending - and it's rising. Next year, the 32 states that expanded Medicaid under ObamaCare will see their costs climb by an additional $9 billion.
Meanwhile, a Government Accountability Office investigation found that improper payments accounted for more than 10% of all Medicaid spending last year.
And for all this, Medicaid grossly underpays doctors and provides lousy care to many of its enrollees. In California, for example, the Medicaid expansion resulted in a flood of patients into emergency rooms because they can't find a doctor willing to treat them.
In short, Medicaid is in dire trouble, and the Senate and House bills offer smart, prudent - and relatively modest - fixes.
Keep all this in mind the next time you hear someone like former President Obama lament the Senate bill's "fundamental meanness."
The essential American soul is hard, isolate, stoic, and a killer. It has never yet melted. ~ D.H. Lawrence
| 
