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Know Your Rights
Source: Colorlines
Subject: Health Justice & Access
Type: Media Coverage

Medicare and Medicaid Are Not Safe From the Debt Deal Cuts

Sagrario, the only person in her* family with health insurance, was diagnosed with cancer after she first arrived in New York from Honduras. She has been able to cover her care with a combination of Medicare, the medical assistance program for seniors, and Medicaid, which covers the costs that Medicare does not. As a person of color, this coverage plan isn’t unusual: Approximately 46 percent of people on both Medicare and Medicaid are people of color.

It should be good news, then, that after much anxiety Medicaid and Medicare both emerged from the recent debt deal unscathed. It’s especially good news for those who have been working hard to reduce racial health disparities, because people of color “live sicker and die younger,” as the public health axiom goes.

But not so fast. While these crucial health care programs have not yet met the budget scalpel, it’s unlikely the debt deal’s goals can be achieved without meaningful cuts to them.

Earlier this week, a report featuring personal stories, including Sagrario’s, of people of color on Medicaid, was released by the Health Rights Organizing Project of the Alliance for a Just Society, a coalition of 14 organizations from different states fighting for racial and economic justice in health care. The report, titled “Medicaid Makes a Difference: Protecting Medicaid, Advancing Racial Justice,” illustrates how Medicaid beneficiaries—currently 50 million people, about half of whom are people of color—may still lose out in the second round of budget cutting.

The first round of budget cuts was just a preview of what lies ahead. Congress plans to implement more severe cost-cutting measures through a “super committee” established by the debt bill signed into law on Tuesday. Legislators must cut at least $1.2 trillion in the next decade and health care costs, which are still growing faster than the economy as a whole, will inevitably be a key component of making that goal.

So although Medicare was spared upfront, if the super committee can’t come to agreement on how to make the mandatory cuts, Medicare will be included in an across the board cut of 2 percent, or approximately $11 billion per year from the provider-side of the program. And cuts to Medicare will indirectly impact Medicaid beneficiaries who rely on safety-net institutions, public hospitals and community health clinics, for their primary source of health care. Federal funding for Medicare reimburses providers for the cost of treating patients, but also helps offset the cost of Medicaid patients and uninsured patients that are disproportionately treated in public and teaching hospitals.

Medicaid, funded through a combination of federal and state money, is not likely to be cut directly but may be affected through a restructuring of the program that could result in a weakening of each state’s ability to fund it. It is here that we may see a return, in the worst case scenario, of Paul Ryan-style plans that call for Medicaid funding to be structured as block grants, which will limit the federal contribution to the growing program and thus force states to shift costs onto patients.

Eun Ha Yi, who suffered from a spinal injury that happened at her job and who relies on the state version of Medicaid in California, states that “[having health insurance is] a question of life and death, and life is precious for everyone, whether we are rich or poor.” A study done by the National Bureau of Economic Research confirmed that having health insurance is indeed also important for one’s long-term financial stability.

The “super committee” established to reign in cost should take this into consideration. And as the Health Rights Organizing Project suggests, reduce cost by creating new revenue streams, by taxing the wealthy and big corporations, and by cutting defense spending and not by scapegoating Medicaid beneficiaries during times of great financial confusion.

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