With a budget framework advancing through the US Congress, stakeholder groups are analyzing the potential effects once the general targets become actual policy proposals. Among them is a ten-year reduction of $880 billion, in a subject area that is overwhelmingly occupied by Medicaid services to Americans. One analysis suggests that such cuts, if made to Medicaid, could create a $2 billion chasm in the Maryland state budget, atop the already-stressed State fiscal plans.

Republican lawmakers in the US Congress continue to work on a fiscal plan including many broad facets, including general targets for spending and an allowance for higher deficits caused by extending various tax provisions scheduled to expire.

Among the less-than-specific elements in the plan is cost cutting in health care programs, described in The Hill this way:

The 70-page budget plan approved by Republicans in both chambers contains few policy details, and it mentions Medicaid only once. But it instructs the House Energy and Commerce Committee, which has jurisdiction over Medicaid, to locate $880 billion in spending cuts over the next decade. That’s mathematically impossible, the Congressional Budget Office says, without cutting Medicaid, which provides health coverage to more than 70 million people.

An analysis by KFF, a health-policy focused organization, assesses the potential fallout if such cuts to Medicaid were to pass. From their analysis:

Key Take-Aways

• Federal cuts of $880 billion over 10 years (or $88 billion per year) would represent 29% of state-financed Medicaid spending per resident.
• States could opt to raise tax revenues to offset federal Medicaid reductions. Proposed federal cuts represent 6% of state taxes per resident.
• States could instead make cuts to other states programs such as education, the largest source of expenditures from state funds, to offset federal Medicaid reductions. Proposed federal cuts represent 19% of state education spending per pupil.
• To further put the proposed federal cuts in perspective, they are equivalent to all Medicaid spending on 3 million seniors and people with disabilities (18% of enrollees in that group), 14 million other adults (38% in that group), or 22 million children enrolled in Medicaid (76% of that group). These figures are meant to put the magnitude of the cuts in perspective, not to suggest that states would achieve savings by eliminating coverage by these amounts. The effects of federal cuts on Medicaid spending and coverage would depend on the specific policies enacted.

The overall analysis from KFF estimates that a proportional reduction of $88 billion per year to Medicaid services (one tenth of the $880 Billion, which is a ten-year score, conventionally used by the US Congress to measure fiscal effects of policies), would result in a roughly $2 billion reduction in funding to Maryland. Such an impact would surely be felt beyond merely Medicaid service recipients – as the KFF analysis tries to provide context for the possible cuts relative to education spending, and the like.