What Happens to Medicaid Under the New Healthcare Bill?

Julie Shenkman
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The Republican-controlled Congress unveiled legislation within a massive health care bill that would lead to sharp Medicaid cuts. The plan would limit the amount of people who have health insurance by tightening the criteria by which people go on Medicaid, which could have consequences across the health care industry.


Both the House and Senate each unveiled a health care bill designed to repeal the Affordable Care Act, colloquially known as Obamacare, while making Medicaid cuts. U.S News & World Report states the House version would likely see 14 million fewer people on Medicaid from 2017 to 2027. Meanwhile, the Senate version would cut 22 million people from the rolls over the same time span, according to the Associated Press. Around 74 million people receive Medicaid, including six in 10 nursing home residents.

What May Happen to Individuals if Bills Pass

If either health care bill passes and both chambers and President Donald Trump signs the bill into law, a few things should start to happen. Medicaid works as a partnership between states and the federal government, as Congress gives money to states as way to fund their insurance efforts. Different states have various criteria for people to qualify for Medicaid. States must cut the people receiving Medicaid to save money because these jurisdictions would receive less federal funding in the form of block grants. When the block grants run out, states would have to make up the funding difference.

Seven governors, including three Republicans, wrote to Senate Majority Leader Mitch McConnell, R-Kentucky, to dissuade his party from passing the Senate's version because it puts more of a burden on states to fund Medicaid. Rep. Richard Neal, D-Massachusetts, told U.S. News that nursing homes could go out of business when elderly people who could normally afford this care may have to move out. A safety net for millions of elderly, disabled, children and poor families could disappear if a revamped health care bill passes in 2017.

What Could Happen to Businesses

The difficulty with any cuts made in a health care bill is that fewer Americans seek treatment. That means fewer people pay for health care, and businesses that rely on treating patients make less money. Doctors and nurses see fewer patients, and hospital systems may have to lay off staffers. Those unemployed people would need government benefits from unemployment until they find another job, which would exacerbate government welfare programs even further. People without jobs pay fewer income taxes, which leads to fewer money in the U.S. Treasury.

The cuts to services are on reason why several health care groups have come out against the legislation working through Congress. To make matters more complicated, several GOP senators came out against the bill in their chamber, which forced McConnell to delay a vote on the measure for a week.

Whatever happens to any health care bill, two things are clear. The American health care system faces a lot of hurdles to balance costs with insuring as many people as possible. Also, any cuts may have ripple effects throughout the economy that could affect more than just the uninsured.

Photo courtesy of Chris Potter at Flickr.com


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