'The Fix Is In': GOP Wants Poor People to Pay More for Medicaid to Fund Tax Cuts for Wealthy

Reporting out Wednesday indicates that congressional Republicans are considering a proposal that would force low-income Americans to pay more for Medicaid coverage, a highly regressive plan aimed at helping the GOP offset the massive projected cost of another round of tax breaks for the wealthy.

The proposal, first reported by The American Prospect's David Dayen, is part of a menu of options Republicans are weighing for inclusion in their forthcoming reconciliation package. A House Energy and Commerce Committee markup of the legislation is expected next week.

"Making poor people pay more for healthcare is exactly the kind of effective cut to Medicaid that moderate Republicans have sworn they would not abide," Dayen wrote. "While reducing the federal share of Obamacare's Medicaid expansion, which provides federal funding to extend Medicaid to adults under age 65 up to 138% of the poverty level in 40 states and D.C., is not part of the menu, this is a backdoor way of achieving something like that reduction, on the backs of individuals who get Medicaid."

The proposal is described in the emerging reconciliation proposal as "cost-sharing above 100% FPL," or federal poverty level.

Medicaid's website explains that out-of-pocket Medicaid costs currently apply to all "enrollees except those specifically exempted by law, and most are limited to nominal amounts."

Under the GOP proposal, according to Dayen, "Medicaid recipients making at or above the federal poverty level, which is $15,650 for a single individual and $21,150 for a two-person household, would have to pay some money for coverage—either in premiums, co-payments for hospital visits and other treatment, or other fees."

"Currently, Medicaid gives states the option to impose out-of-pocket spending on recipients, though some populations and services, like children under 18 or pregnancy care, are exempted," Dayen added. "Some premiums and enrollment fees are limited to beneficiaries above 150% of the poverty line; this policy would take that number lower."

Matt Bruenig, founder of the People's Policy Project, told the Prospect that "whether you call it a co-pay, a premium, a fee, or a tax, the net result is either a reduction in the disposable incomes of those subject to the cost-sharing or people forgoing healthcare."

"When I look out into the American income distribution for places where I'd like to cut things back," Bruenig added, "families with incomes between 100% and 138% of the poverty line is not where my eye tends to go."

In response to Dayen's reporting, Working Families Party national director Maurice Mitchell said in a statement that "Republicans want to hike Medicaid premiums and copays to pay for massive tax cuts for the rich."

"The fix is in," said Mitchell. "They care more about tax breaks for their billionaire donors than keeping costs low for families in their own districts. But we're not going to let them get away with it. We're ready to fight back."

"The bottom line is that the Republican bill is going to cut healthcare for kids, seniors, Americans with disabilities, and working families."

Another option on the GOP policy menu for Medicaid is work requirements, which have been tried to disastrous effect at the state level. Research has repeatedly shown that work requirements do little to boost employment while making it more difficult for eligible program recipients to continue receiving benefits. Most Medicaid recipients already work.

Dayen's reporting was published shortly before the nonpartisan Congressional Budget Office (CBO) released an analysis examining the potential consequences of some of the Medicaid cuts floated by Republican lawmakers in recent days.

The CBO—which did not examine the GOP plan to impose more payments on poor Americans—found that the Republican proposals would "reduce the resources available to states to fund Medicaid programs."

"Overall, CBO expects that, on average, states would replace roughly half of the reduced funds with their own resources," the budget office said. "Additionally, in response to the loss of the other half of the resources, states would modify their Medicaid programs and reduce Medicaid spending using three levers: reduce provider payment rates, reduce the scope or amount of optional services, and reduce Medicaid enrollment."

Sen. Ron Wyden (D-Ore.), who requested the CBO analysis last month, said Wednesday that "the Republican plan for healthcare means benefit cuts and terminated health insurance for millions of Americans who count on Medicaid."

"Republicans continue to use smoke and mirrors to try to trick Americans into thinking they aren't going to hurt anybody when they proceed with this reckless plan, but fighting reality is an uphill battle," said Wyden. "The bottom line is that the Republican bill is going to cut healthcare for kids, seniors, Americans with disabilities, and working families, and Democrats are going to fight to stop it."