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Medicaid, Colorado and the Presidential Election

Medicaid, Colorado and the Presidential Election

T-minus 14 days (and counting…)

It’s official: You’ve reached the home stretch of the 2012 election. Even for those of us who consider ourselves political junkies, the wall-to-wall political ads that come with living in a swing state can be exhausting.

While the media pores over endless polling in the final days, CHI’s focus is on what the election means for health policy in Colorado. If President Obama wins re-election, we expect a continuation of the status quo. The Affordable Care Act might hit some hurdles along the way, and the Medicaid expansion question is up for debate, but Colorado’s Medicaid program will probably look fairly similar to the way it does today.

A President Romney would likely take a different approach. A Kaiser Family Foundation (KFF) study released this morning provides some clues as to what Colorado’s Medicaid program might look like under a Romney-like plan. Researchers at the Urban Institute analyzed the House Budget Plan for Medicaid, which passed in 2011 and 2012 along party-line votes. They looked at the impacts of repealing the ACA and “block-granting” Medicaid, both components of the House Budget and Governor Romney’s plan. (A block grant refers to a federal lump-sum payment with relatively few provisions on how the money is spent. In contrast, the current Medicaid program is funded jointly by the state and federal governments, and states must meet cover certain populations as dictated by federal guidelines. For more on block grants, click here.)

On a federal level, KFF projects that federal Medicaid spending would be cut by $1.7 trillion between 2013-2022. This represents a drop of 38% compared to the projected spending under current law.

As is, the researchers estimated that federal Medicaid funding for Colorado would be $43.9 billion between 2013 and 2022. If the ACA were repealed, Colorado would see a drop of $12.4 billion in federal funding. If Medicaid were block-granted, Colorado would see an additional drop of $7.1 billion. This represents a total decline of$19.5 billion, which represents nearly half (44%) of what Colorado would have received if the ACA were fully implemented.

The researchers also looked at the impact of the cuts on enrollment in public insurance programs. Under current law, they predicted that approximately 805,000 Coloradans would be enrolled in Medicaid in 2022. If the ACA were repealed and Medicaid were turned into a block grant, KFF estimates that Medicaid enrollment in Colorado in 2022 would be approximately half that. (For more details on how the analysis was conducted, read the full paper here.)

It’s important to note that some people argue that block-granting Medicaid will make it more efficient. By removing many of the “strings” that come attached to these federal dollars, states will have more flexibility to experiment with innovative solutions that may reduce costs. At this point, however, the jury is still out on whether those savings will materialize.

For more CHI analysis on the election and what it means for Colorado, download this presentation our president/CEO Michele Lueck recently gave as part of the AHEC/CHI Conversations Series.

And a final note: soon after the results are announced, CHI will release a brief analyzing the Colorado implications of the election. If you’re not already on it, join CHI’s mailing list to be the first to know about the new issue brief.