The following article by Heidi Schultheis, Eliza Schultz and Rachel West was posted on the Center for American Progress website August 14, 2018:
President Donald Trump and congressional Republicans have repeatedly attempted to undermine the U.S. health care system, including with provisions in their unpopular tax bill that undercut the Affordable Care Act’s (ACA) individual mandate and drove up premium prices. Recent reports indicate that congressional Republicans will almost surely repeat their campaign to repeal the ACA and slash the Medicaid program. If they succeed, there could be dire consequences not only for Americans’ health but for state budgets as well. Federal Medicaid payments comprise an average of 17.7 percent of states’ total expenditures, which means that deep cuts to the federal government’s Medicaid payments would squeeze other essential services in the state budget such as education.
A new Center for American Progress analysis shows that if states were to absorb Medicaid funding cuts—such as those Republican lawmakers have previously proposed—by slashing their education budgets, public K-12 school teachers and college students would be hit hard. (see Methodology) Education accounts for more than a quarter of all state spending, leaving it a prime target for cuts if President Trump and Congress cut Medicaid. Despite the proven association between higher teacher pay and increases in students’ high school completion rates and future job salaries, most teachers are chronically underpaid—as recent protests in West Virginia, Oklahoma, and beyond have highlighted. Meanwhile, today’s college students face sky-high tuition and extreme debt, putting economic security out of reach for too many young people. If states fill the funding gap that would be left by Medicaid cuts by slashing teacher pay, K-12 teachers would have to take an average annual pay cut of nearly $4,300 in 2027. Alternatively, if states instead increase tuition at public colleges and universities to offset the Medicaid cuts, the average public college student would face an annual tuition hike of more than $905 in 2027. Table 1 provides a state-by-state breakdown of these potential cuts.
State efforts to save Medicaid could involve sacrificing vital resources
Medicaid provides health insurance to more than 73.6 million people—nearly 1 in 4 Americans—most of whom are children, older adults, and people with disabilities. Under the Trump administration, the program has faced relentless attacks. In his 2019 budget, for example, President Trump proposed slashing the program by $306 billion over the course of a decade, while the Senate’s most recent so-called repeal-and-replace bill attempted to cut federal Medicaid funds for states by $160 billion over six years. Such cuts are deeply unpopular: 80 percent of voters overall oppose cuts to Medicaid, and more than half of voters—56 percent—are strongly against cuts.