This article focuses on Kent County, but the possibly very damaging Federal legislation now being considered, if passed, will affect every US county, particularly those in rural areas. On 2/24/25, the Republican majority in the House of Representatives passed a budget resolution ( H Con Res 14, 119th Congress) that serves as their blueprint for the actual budget appropriations process. It has been passed on to the Senate.
Its major focus is to identify existing Federally financed programs that could be cut, to fund President Trump’s tax reduction priorities, but be deficit neutral. His agenda includes extending his 2017 Tax Cuts and Jobs Act (TCJA), but also further reducing corporate and high earner tax rates. Moreover, the approach includes increasing the standard deduction and family tax credits, eliminating personal exemptions and limiting deductions for state and local income and property taxes.
The Republicans in both Congressional Houses face a difficult challenge because the amount needed to support Mr. Trump’s tax plan, but not increase the deficit, is $4.5 Trillion. And directly related to this issue, is Congress’s looming duty to raise the debt ceiling to avoid the USG’s first ever debt default.
The “Blueprint” targets the House Energy and Commerce Committee which oversees health care and disability programs, to find $880 million in reductions (over the next 10 years). And the only program the Committee monitors that could offer that large a reduction, is MEDICAID/CHIP, which is a joint Federal/state program. It receives circa $ 600 Billion annually from the Federal Government and $14.6 Billion from Maryland’s.
Nearly, 80 million Americans, .6 million Maryland residents and some 6,200 in Kent County. are enrolled in MEDICAID/CHIP
The House Ways and Means Committee is reviewing how to achieve the $880 Million cut to MEDICAID/CHIP. The current thought is to reduce the standard percentage (90%) the Federal Government contributes to state costs for those who received coverage under the ACA (Obama Care) expansion provisions. The national total of these individuals is approximately 21 million people.
This approach would reduce the Federal match for the expansion population (90%) to what states receive for the traditional MEDICAID population: 50% for the rich states and 77% for the poorer. The options for states should this become law, are not easy.
The first is they could use their own money to make up the difference. Given Maryland’s current strained financial situation, that would be difficult unless additional larger state programs budgets (education) were reduced further. Another option is to scale back MEDICAID coverage for some groups, eliminate optional benefits or reduce provider payment rates. And then there is the 3rd option: raise taxes.
Those Impacted:
Given the millions of Americans who currently benefit from MEDICAID, one could anticipate some millions will be affected negatively should the plan discussed above become law and be carried out. However, there is another category that relies on MEDICAID reimbursements that would also be be harmed: hospitals, nursing homes and community health centers. The Kaiser Family Foundation reports that in 2023, 32% of MEDICAID spending was for hospital based care. These facilities are generally underfunded, particularly in rural areas, and this potential loss of funding, could be expected to force more to close.
Recent White House policies beyond MEDICAID, have reduced care for the disabled. .It is estimated that some 20-25% of Americans are disabled: physically, psychologically or intellectually. The 1990 Americans with Disabilities Act, required employers of more than 15 people, not to discriminate against otherwise qualified candidates because of their disability. It also required that reasonable accommodations be made for disabled workers
However a 1/20/25 Presidential Executive order directed all relevant government agencies to terminate “…all discriminatory programs, including diversity, equity, and accessibility. On 1/21/25 the President put federal accessibility employees on administrative leave.
It may just be me, but reducing or removing care for Americans needing help in order to reduce taxes on corporations and the wealthy, without the potential political cost of raising deficits and debt by noticeable billions/trillions with some political cost, strikes me as severely objectionable.
Robert Saner says
As always, the author’s analysis and commentary are factual and insightful. But the current configuration of the federal/state Medicaid “partnership” is also an object lesson in how the country happens to be awash in annual deficits and accumulated debt. Medicaid was enacted in 1966, part of the “Great Society” but almost an afterthought to the much more ambitious Medicare legislation in 1965. Medicaid was designed to provide healthcare coverage for the very poor–those on cash assistance, particularly the Age to Families with Dependent Children or “AFDC” program. And the premise was that it would be a 50/50 split between states and the federal government with only the poorest sates (e.g. Mississippi and Alabama) qualifying for a richer match. Over the course of the next 50 plus years, it was gradually “enhanced,” almost always through bi-partisan Congressional action and with the best of intentions. And over time two changes stood out. First, a larger and larger share of the costs went not to poor women with young kids but to the elderly in nursing homes needing long term care not covered by the Medicare program. Second, the Federal share of total expenditures grew well above the original equal split. Unlike Medicare which is funded at least in part by a dedicated revenue stream collected as a payroll tax, Medicaid was supported entirely from general revenues, which originally meant tax collections and now translates almost directly into borrowings. And to no great surprise, since that bipartisan Congressional appetite to expand benefits greatly exceeded its appetite to collect taxes to pay for those benefits, deficit spending grew more and more entrenched.
This is not to suggest that I think Medicaid should bear the brunt of efforts to control the deficit. It is simply an example of dozens and dozens of federal programs (in which I include tax incentives) that benefit agribusiness, pharma companies, student loan borrowers, resource extractors, EV manufacturers and on and on. My point, rather, is that until voters and taxpayers hold politicians to a higher standard of responsibility when it comes to balancing the national checkbook, we are destined to fall deeper and deeper into debt.