Connecticut would lose billions in federal funds under House GOP Medicaid proposal

Connecticut would lose billions of dollars in federal health funds for the poor under the House Republican budget blueprint, according to a new analysis by the nonpartisan Kaiser Family Foundation.

Kaiser researchers examined the GOP plan’s impact nationally and at the state level, concluding that it would likely push millions of low-income patients off the Medicaid rolls–or force states to dip into their own coffers to keep them on. The plan would also, of course, save the federal government reams of money.

Under the microscope in the Kaiser report is the House Republican proposal to transform Medicaid from an “open-ended, matched federal spending” program to a block grant system in which federal spending is capped and distributed to states based on a formula, not actual costs. They also looked at the GOP provision to repeal federal health reform and the impact that would have on Medicaid.

“This proposal would make fundamental changes to the financing structure of the program that could shift costs to states and could result in large reductions in enrollment and payments to providers such as hospitals,” the Kaiser report says. “In aggregate, the proposal would reduce federal Medicaid spending by $1.4 trillion over the 2012 to 2021 period.”

Although it would affect states in the south and mountain regions the most, New England would be hard hit too. Connecticut, for example, would lose $14.6 billion in federal Medicaid funds over the next ten years-a 33 percent reduction. The state’s hospitals would also lose out in a big way. In 2021, the report says, payments to Connecticut hospitals would be $605 million lower than they would be under current law.

Assuming cuts in enrollment are spread equally among all demographic groups, Connecticut’s Medicaid rolls would shrink by at least 38 percent, with 255,000 people losing access to the program.

The fate of the GOP budget plan is murky at best. It passed the GOP-controlled House last month, but faces near-certain death in the Senate. The biggest question is whether Republicans will insist on, and Democrats will entertain, some Medicaid reforms in their broader talks about how to deal with the deficit.