New Details Emerge about Proposal to Cut Medicaid in 2012 Budget

by Rebecca Farley on April 14, 2011

The House this week is expected to vote on the proposed outline for the 2012 budget recently issued by Representative Paul Ryan (R-WI), Chairman of the House Budget Committee. The Ryan proposal would drastically reshape Medicaid and impose dangerous levels of cuts on the program. It seeks to convert Medicaid to a block grant, capping the federal government’s share of Medicaid spending and making states responsible for meeting all additional costs. The result would be a $1 trillion reduction in Medicaid funding over the next 10 years.


A new analysis of the proposal by the Center on Budget and Policy Priorities indicates that Ryan’s plan would save far less than he suggests over the coming decades. While making $4.3 trillion in cuts to important programs such as Medicaid, Pell Grants, food stamps, and low-income housing, Ryan simultaneously provides $4.2 trillion in tax cuts, corporate subsidies, and other windfalls for the wealthy. The net result is only a $155 billion reduction in the deficit, a small fraction of the amount Representative Ryan claims his plan would save.


Although the Ryan bill will almost certainly die on reaching the Senate, the biggest fight for Medicaid lies ahead. At some point in the next 2 months, the nation is expected to reach the statutory ceiling on our federal debt. Each time this happens, Congress must pass a law increasing the debt limit. This year, the debt limit debate is expected to be driven by fiscal conservatives who are likely to demand a global cap on federal spending. Such a bill has been introduced by Senators Bob Corker (R-TN) and Claire McCaskill (D-MO). The net result of these spending caps would inevitably lead to block granting Medicaid, converting Medicare to a voucher system, and other drastic reductions in federal discretionary spending.

Our field must be vigilant in our opposition to the Ryan plan and the block-granting of Medicaid. If you have not already done so, please contact your Representatives today and urge them to vote against this harmful proposal!


To learn more about the Ryan plan, see this fact sheet from the National Council. You can also view the amount of money your state would lose under the Medicare and Medicaid changes in his plan in this document from FamiliesUSA. For another sense of what impact the block-granting of Medicaid would have on your state, see this report from CBPP, which outlines how much money your state would have lost if Ryan’s plan had gone into effect in 2000.


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{ 1 comment… read it below or add one }

Amy A. April 16, 2011 at 9:55 am

I totally support the design of the Health Insurance Exchange, and that each state will be responsible for funding streams, but that will only work if the number of citizens eligble now remained covered until this new process begins.

I am a consumer of mental health services because I am terminally ill. Without access to this very important piece of my life I would not be able to have a good end of life experience. Please think about those of us who are desperate to stay alive.


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