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Romney-Ryan Medicaid plan would burden Massachusetts

The next two months will feature much discussion about Mitt Romney’s and Paul Ryan’s plan to turn Medicaid — the federal program to provide health care to the very needy, including many penniless seniors in nursing homes — into a single “block grant” to states to run their own programs. But one point is clear at the outset: This would be a bad deal for Massachusetts.

The Ryan plan, which has been endorsed by Romney, would cut federal Medicaid funding over the next decade by a third, according to the nonpartisan Urban Institute. Massachusetts would see its share drop from roughly $109 billion to $78 billion, in today’s dollars. That shift that would strain Massachusetts more than other states because seniors and disabled individuals are an outsized proportion of the Commonwealth’s Medicaid rolls — 44 percent, compared with just 35 percent nationwide. Most Medicaid spending goes toward those two demographics, a fact that Ryan doesn’t account for. He would tie the amount of state aid to overall population changes and inflation alone. The result for Massachusetts would be fewer funds for the most costly Medicaid enrollees.

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The other major concern for Massachusetts stems from Ryan’s plan to give state officials much more leeway in running the program. Current Medicaid law gives states incentives to provide a minimum level of health coverage to beneficiaries. Ryan’s block grants would remove many of those strings, but that would give cash-strapped states the options of reducing eligibility or covering fewer services. Massachusetts, as a liberal state with a proud tradition of health care innovation, would probably look for ways to fill in the gaps — and thereby attract poor people from less-affluent or less-generous states.

Essentially, Ryan would turn Medicaid into 50 independent state programs, some of them quite bare-bones and ineffectual. Massachusetts would have to decide between maintaining the program at current levels — and risk becoming a magnet for out-of-state recipients — or reduce services for everyone, including current Bay State recipients. That would be quite painful, considering the thousands of recipients, most of them elderly or disabled, who depend on the state for virtually all their living and nursing expenses.

Ryan and Republicans respond that the block grant approach would get state Medicaid programs to be more efficient; it would allow for more creative solutions. But few Medicaid savings are to be found. Medicaid costs have grown at a slower rate than health care costs for the public at large. Ryan’s plan could actually lead to greater costs: Health needs for low-income people wouldn’t disappear, but instead be borne by others in the health insurance system through higher premiums.

States need to maintain their commitment to assuring health coverage to those who need it most. It’s not just the right thing to do; it makes economic sense. Ryan’s plan is not a viable way of doing it cheaper. Instead, it would give poorer states, or those that don’t care to provide human services, a chance to slink out of their obligations. Massachusetts would be among those forced to pick up the slack.

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