This is an archived article that was published on sltrib.com in 2011, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Medicaid is more than a lifeline for 68 million low-income Americans.
It's good medicine for the economy, says a consumer-advocacy group, which on Wednesday came out with a report condemning proposed cuts to the government health insurance program.
Families USA says Medicaid cuts in the House GOP budget proposal sponsored by Rep. Paul Ryan of Wisconsin would put at risk 35,210 jobs and as much as $4.2 billion in economic activity nationally — having a devastating effect on still-struggling states.
Ryan's spending plan stirred controversy for its attempts to turn Medicare for seniors into a voucher program. Far less attention has been paid to the more sweeping changes in mind for Medicaid, said Ron Pollack, executive director of Families USA.
The congressman wants to turn Medicaid into a block grant, which would mean finite amounts of federal aid flowing to states to run their programs. And those amounts would be cut by 5 percent in 2013, 15 percent in 2014 and 33 percent in 2021.
Though rejected by the Senate, the House budget is the starting point for bargaining with the president over a policy quandary: How to reduce the deficit and contain health care spending without sacrificing jobs.
Medicaid provides health coverage to one in six Americans, most of them children, seniors and the disabled. Run by states but largely funded by Washington, the program injects $1.8 billion into Utah's health care industry, accounting for about 60 percent of spending on nursing homes.
A 33 percent cut would mean a $403.5 million hit to Utah's Medicaid budget, $929.3 million in lost economic activity statewide and 8,880 lost jobs, the Families USA analysis shows.
The "Jobs at Risk" report is based on an economic modeling tool used by the U.S. Department of Commerce to gauge the impact of military base closures, hospital and airport expansions, and natural disasters on regional economies.
First hit would be the hospitals and nursing homes, which would shed jobs to make up for shrinking Medicaid reimbursements, said Pollack. Displaced workers would then spend less on consumer goods, hurting retailers and resulting in further job losses, he said.
Medicaid is also vital to families. "Without it I wouldn't be able to work, and I don't know how long I'd have to live," said Carol Pastor, of Draper.
The 46-year-old single mother of four was uninsured when she was diagnosed last November with stage four breast cancer. She works full time as a sales trainer for a storage company but says she couldn't afford the company health plan "and still manage to put food on the table."
When Pastor discovered that she met the income threshold for Medicaid, she says she "felt hope for the first time since" her diagnosis. The program paid for surgery and chemotherapy. Pastor will also undergo radiation treatment.
"I include Medicaid in my prayers every night, because without it I might not have a chance to watch my kids grow up," she said.
Medicaid will likely remain a target as Washington looks to tame the deficit and states balance their budgets.
Poor families, kids and people with disabilities pose less of a political threat than seniors on Medicare, said Lincoln Nehring, senior health analyst at Voices for Utah Children. "When times are difficult it's easy for people to blame the powerless and weak."
Nehring concedes that the current rate of spending can't be sustained but says cuts won't cure deeper problems plaguing the country's health care system.
Judi Hilman, executive director of the Utah Health Policy Project, agrees Ryan's cuts "are the easy way out."
She prefers Utah's plan to steer Medicaid recipients into managed care networks. As written, the blueprint has flaws, said Hilman, but she is confident the strategy has potential for saving money and driving change in the private insurance market.